Jack Welch and Jeffry immelt:Continuity and change in strategy, Style, and culture at GE

Pankaj UpadhayeNeha KhatriNiati DixitShika jain Md Zeeshan Farooqui

Introduction to GE Founded by Thomas Alva Edison as EGEC in

1878.Merged with THEC in 1892 to form GE.First formal CEO Charles Coffin 1894.In 1896, General Electric was one of the

original 12 companies listed on the newly formed Dow Jones Industrial Average.

Acquired more than 350 companies, including mammoth players like- National Electric Lamp Association (NELA) , reacquired RCA, NBC television network .

GE at presentOperates in 100+ countries worldwide300,000+ employees worldwide2009 revenue - $174 billion2009 earnings - $31.4 billionOne of original six companies still remains

listed after 114 year on Dow Jones index

Who is Jack Welch?1935: born in Salem, Massachusetts1957: BS in Chemical Engineering1960: MS and PhD in Chemical Engineering

Jack Welch1999: Named “Manager of the Century” by

FortuneNamed one of the three most admired

business leaders in the world by Financial Times

September 7, 2001: Retired as CEOPublished autobiography, “Jack, Straight from

the Gut”

Jack Welch and GE1960: Joined GE as a junior engineer10 Years later he audaciously wrote in his

annual performance review that his long-term goal was to become CEO

1972: Elected GE’s youngest VP1977: Become senior vice president1979: Vice ChairmanApril 1, 1981: Became the 8th Chairman and

CEO of General Electric

Taking Over GE’s CEOChallenges from outside of GE

Economic recessionHigh interest ratesHighest unemployment rate since the

depression Challenges from GE Massive information and inefficient macro-

business

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

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

acquisitionsInsisted GE become more “lean and agile”

resulting Delayering: elimination of the “sector” levelDownsizing: elimination of about 123,450 jobsDivestiture: elimination of an additional 122,700 jobs

Replaced 12 of his 14 business heads

Initiatives - ObjectiveCut the companies spending on R & D.Work-Out – Group of 50 employees

companies policy and process.Best Practices – Involving all employees in

the quality process.Going GlobalSix Sigma - In late 1995E-Business

Passing the TorchRetirement – September 2001

Lengthy process of succession Internal candidates onlyNever named candidatesNo strategic visionNo common measure for candidates

Long list of candidates

GE under Jack Welch

• Welch – a hard task-master.

• Surprise visits – a part of his style of functioning.

• Under Welch, GE functioned as a true meritocracy.

• The Annual ‘C’ session meetings.

• Promoted the idea of ‘Boundary – less corporation’

at GE.

• Jack Welch’s – Theory of Leadership – The 4E’s + P.

Theory of Leadership – The 4E’s + PENERGY

• Enormous amount of positive energy and a strong bias for action

ENERGIZING

• Ability to motivate and inspire people for maximum results

EDGE

• The courage to take bold decisions and the conviction to stick to them

EXECUTE

• Ability to give a form to vision and deliver results

PASSION

• Heartfelt and deep excitement for work

Concept of borrowing unpatented ideas from other

corporation.

Sig Sigma, Demand Flow Technology, Bullet Train

Thinking, Quick market Intelligence, etc.

Bottom 10% least effective employees were fired.

Tendency to jump to conclusions about people.

An extremely demanding boss – “What have you

done for me lately?”

GE under Jack Welch

Revenues shot up from 28 billion to 129.8 billion (1981 – 2001)

GE Under Jack Welch

The Immelt Revolution

Who was Jeff Immelt?

Joined GE Plastic in 1982 (MBA from Harvard University)

Various global leadership positions over year career in GE

- GE Electronics, GE Medicals, International Marketing

Elected as CEO to begin tenure in September 2001

GE UNDER IMMELTRelease of Annual Report in March 2002.

Redesigning of CEO Compensation Package.

Acquisition with Vivendi Universal’s American assets value at US$ 14 billion.

Invested in various Research centres.

Promoted external communications.

Cultural shift from performance to customer satisfaction and value

Continued….External Recruitment for senior positions.

Diversity in work force.

“People Oriented” approach.

Establishment of a Commercial Council.

“Innovative Break-through” program.

Launch of projects ranging from creating microjet engines to desalination.

Jack Welch Jeff Immelt

ParadigmEfficiency Oriented- Strong business and down-sizing

Effectiveness Oriented- Growth engines for the future

Methodology6 Sigma- Quality and costs

Imagination, Breakthrough Project

Target Market EU, USA (developed)New markets, products, and businesses- Focusing new emerging market

PortfolioCash Generator - finance, Service

Infrastructure business, health, environmental business- contents, bio, security

Organization Culture

Systematic management and through implementation- finance oriented

Creativity and ideas for innovation- Marketing Oriented- ‘One world’

Core valuein the era

Built to Last, 1994Mgt Challenge for the 21st Century, 1999

What are differences ?

Conclusion

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