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Jack Welch as General Electric Company’s Executive Case Study

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Updated: Apr 15th, 2021

Conditions for success at GE by Jack Welch

Jack Welch undertook a number of initiatives immediately after taking over as the CEO of the company. He was determined to boost the performance of GE that was already below the expected standard. To begin with, Welch established the hardware initiative plan. Two options were adopted in this initiative. First, some hardware could be sold or fixed. Second, close down was another option for the hardware initiative. This initiative led to several benefits for the company. For instance, the number of employees was significantly reduced from 404,000 to 292,000 within a period of about 8 years. The revenue also improved from 27.2 to 29.2 Billion dollars within the same period. In addition, the profitability of the company skyrocketed from 1.6 to 2.4 billion dollars.

The ‘Three Circle Concept’ was the second initiative adopted by Welch. Some of the areas considered in this initiative included engineering nuclear services and information construction. Welch also proposed and implemented a rigorous de-staffing program in order to reduce the cost of recurrent expenditure. The software initiative and effective management of time were incorporated by the CEO in the facelift program of the company. Finally, Welch embraced the ‘workout’ concept and other best practices in order to boost the overall performance of the company.

Primary methods that Jack Welch used to develop Leaders

Jack Welch employed a disciplined de-staffing initiative in order to develop the capacity of leaders at GE. He noted that questioners and checkers were never required at GE. Each staff member was supposed to add value to the company by creating a competitive and productive workplace environment. The second method adopted by Welch was to embrace a lean and agile team of leaders who were competitive, effective, and productive.

A personal opinion on the “Work Out” Concept

Jack Welch noted that unique and creative ideas could only be obtained from the brainpower of the company’s employees. The ‘Work Out’ concept was meant to exhaust all the available potentials from employees. In other words, the concept was supposed to steer a relentless and endless organization’s pursuit for the best approach in undertaking all activities. The concept offered the best approach for improving the performance of GE. The primary aim of the concept was to minimize bureaucracy. It provided the best way through which all employees of the organization could improve the output of the GE Company. It is pertinent to mention that the objective of the ‘Work Out’ concept was to clean up the company. It was an effective program because it eventually improved various processes of production.

Jack Welch and Colin Powell’s Principles

Simplify

Simplicity was attained at GE through the ‘Work Out’ program that sought to eliminate bureaucracy and wastage of working hours. The number of employees was reduced. The leadership team was also made lean and agile.

Push the envelope

Jack Welch believed in minimal management strategies alongside adequate leadership skills. He developed leaders through capacity building and training. He executed minimal management in order to improve the personal engagement of employees on a daily basis. Welch also visualized change as an important stepping stone for GE’s growth opportunities in the marketplace.

Promote a clash of ideas

Welch argued that it was necessary to be less formal in certain workplace situations. He eliminated bureaucracy and appeared as if he was promoting conflict of ideologies.

Pick the right people

He harnessed the growth of employees by streamlining their numbers. It was only the right people who were retained at GE. The remaining employees were involved in the daily operations of the organization. Every employee was also made a team leader. The agile team was stretched to the full capacity. The CEO also made the entire workplace at GE fun and enjoyable by instilling confidence among all the employees.

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IvyPanda. 2021. "Jack Welch as General Electric Company's Executive." April 15, 2021. https://ivypanda.com/essays/jack-welch-as-general-electric-companys-executive/.

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IvyPanda. (2021) 'Jack Welch as General Electric Company's Executive'. 15 April.

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