Leadership-the Jack Welch Way

LEADERSHIP STYLE

Leadership style is the behaviour exhibited by the leader while influencing the behaviour of followers

2

Task Behavior

Involves:Clearly Telling People

• What to Do• Who will doIt• Where to Do It• When to Do It

And then closely supervising them

3

Relationship Behavior

Involves: Listening to People Providing Support and Encouraging Their

Efforts Facilitating Their Involvement in

Problem Solving and Decision Making

STYLES BASED ON AUTHORITY RETAINED

AUTHORITARIAN STYLE:

PARTICIPATIVE STYLE: a) Consultative b) Consensual c) Democratic

FREE-REIN STYLE: Does not adopt leadership role and actually

abdicates position

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Situational Leadership By

Paul Hersey & Kenneth Blanchart

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Levels of Development of Followers

D1 - Low Competence, High Commitment “Enthusiastic Beginner”

D2 - Some Competence, Low Commitment “Disillusioned Learner”

D3 - Moderate to High Competence, Variable Commitment “Reluctant Contributor”

D4 - High Competence, High Commitment “Peak Performer”

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Directing/Telling

• High Directive, Low Supportive• Leader Defines Roles of Followers• Problem Solving and Decision Making

Initiated by the Leader• One-way Communication

21

Coaching/selling

High Directive, High Supportive Leader Now Attempts to Hear Followers'

Suggestions, Ideas, and Opinions Two-way Communication Control Over Decision Making Remains

With the Leader

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Supporting

• High Supportive, Low Directive• Focus of Control Shifts to Follower• Leader Actively Listens• Follower Has Ability and Knowledge to

Do the Task

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Delegating

Low Supportive, Low Directive Leader Discusses Problems With

Followers Seeks Joint Agreement on Problem

Definitions Decision Making Is Handled by the

Subordinate They “Run Their Own Show”

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S3

S1S4

S2

Low Supportive and Low DirectiveBehavior

High Directive and Low SupportiveBehavior

High Directive and High SupportiveBehavior

High Supportive and Low DirectiveBehavior

DEVELOPMENT LEVEL OF FOLLOWER(S)

DEVELOPED DEVELOPING

HIGH LOWMODERATE

D4 D1D2D3

THE FOUR LEADERSHIP STYLES

DIRECTIVE BEHAVIOR

(High)

(High)(Low)

SUPPORTIVE BEHAVIOR

L E A D E R S H I PL E A D E R S H I P

Innovation=Imagination

Six businesses, each with a number of business units aligned for growth

Commercial Finance

Healthcare

Infrastructure

NBC UniversalConsumer Finance

Industrial

Early Years...

Welch joined General Electric in 1960.

He worked as a Junior Engineer in Pittsfield, Massachusetts, at a salary of $10,500 annually.

While at GE, he blew off the roof of the factory, and was almost fired for doing so.

He was displeased with the $1,000 raise he was offered after his first year, as well as the strict bureaucracy within GE.

He planned to leave the company

Jack Welch and GE

• 1972: Elected GE’s youngest VP• 1979: Vice Chairman• April 1, 1981: Became the 8th

Chairman and CEO of General Electric

Welch’s Vision

“A decade from now, I would like General Electric to be perceived as a Unique, high-spirited, Entrepreneurial enterprise…the most profitable, highly diversified company on the earth, with world quality leadership in every one of its product lines”. -- Jack Welch

Three-Circle Vision for GE

Initiatives - Objectives• Work ethics • Best Practices• Going Global• Boundaryless Behavior• Six Sigma • E-Business

“We bring together the best ideas – turning the meetings of our top managers into intellectual orgies.” ~ Jack Welch

“Restructuring the Hard Drive” Challenged everyone to be “better than the best” Sold more than 200 businesses and made over 370

acquisitions Insisted GE become more “lean and agile” resulting

Delayering: elimination of the “sector” level Downsizing: elimination of about 123,450 jobs Divestiture: elimination of an additional 122,700 jobs

Replaced 12 of his 14 business heads

“Willingness to change is a strength, even if it means plunging part of the company into total confusion for a while.” ~ Jack Welch

Jack Welch

• 1999: Named “Manager of the Century” by Fortune

• named one of the three most admired business leaders in the world by Financial Times

• September 7, 2001: Retired as CEO• Published autobiography, “Jack,

Straight from the Gut”

GE Now

• Operates in 100+ countries worldwide• 300,000+ employees worldwide• 2006 revenue - $163.4 billion• 2006 earnings - $20.8 billion• One of original six companies still listed on Dow

Jones index

Choose to win...

If you pick the right people and give them the opportunity to spread their wings and put compensation as a carrier behind it you almost don't have to manage them.

Bring together best ideas...

“Early in my career...there was too much focus on numbers... and lot less on bulding a team, sharing ideas, exciting others.

Numbers aren't the vision; numbers are products”

See “change” as an opportunity...

“Know that change is here to stay.

Expect the least expected, but move quickly to stay a step ahead

Prepare those around you for the inevitable change that will affect their lives

The game is going to change and change drastically”

“Change” may never end...

“The wisdom may lie in changing the institution while it is still winning... reinvigorating a business, in fact, while it is making more money than anyone ever dreamed it could make.”

Put “values” first...

There are four types of leaders. Type One leaders deliver on commitments and share values of the Company. They have promising future at GE.

Type Two do not deliver. Neither they share the values. They have no place here.

Type Three leaders miss commitments ;but share values. So, they will usually be given chance.

Type Four always deliver but do not have the same values. They are the 'tyrant', the big shots who 'force' performance – and not inspire. They will not last long.

Spark others to perform...

Energy

Enrgize

Edge

Execution

THANK THANK YOUYOU

LEADERSHIP STYLE

THEORIES EMPHASIS END RESULT

Traits Study personal characteristics Separates leaders; Separates non-leaders

Leader Behaviour Theory Study how leaders behave Follower's performance & satisfaction

GE Global Research: First Industrial Lab in the U.S.

Began in Schenectady, New York in 1900

Founded with the focus to improve businesses through technology

One of the world’s most diverse industries

Cornerstone of GE’s commitment to technology

1900

2006

GE –a Bellwether of American Management Practices

1930s, highly centralized, tightly controlled corporate form

1950s, decentralization

1960s, strengthen its corporate staff and develop sophisticated planning systems

1970s, SBU-based structure and sophisticated planning processes

1980’s-2001, three waves in Welch’s period

Lead...

“What we are looking for... are leaders at every level who can energise, excite and inspire rather than enervate, depress and control”

Articulate vision...

“ Leaders -you take anyone from Roosvelt to Churchill to Reagan- inspire people with clear versions of how things can be done better”

Simplify

“ You can't believe how hard it is for people to be simple, how much they fear being simple...Clear tough-minded people are the most simple people”

Manage less...

“Don't get bogged down in meaningless details.

Manage less.

Empower, delegate, get out of the way.

You can't manage self-confidence into people”

Get less formal“You must realize how important it is to maintain the kind of corporate informality that encourages a ... training class to comfortably challenge the boss's pet ideas”

Lead by energizing... “We now know where productivity - real & limitless productivity - comes from. It comes from the challenged, empowered, excited, rewarded teams of people”

Live speed...

“Speed is everything. It is the indispensible ingredient in competitiveness. Don't sit on decisions. Communicate faster. Incorporate speed into every activity” - In his final speech to GE shareholdersIn his final speech to GE shareholders

Quality is your job...

“ (Six Sigma) is the most important thing we ever had. It's betterthan going to Harvard Business School”