51-605-60 MBA Organizational Leadership and Behavior
Fall 2011, Term 1
Modern Business Leader Analysis Project
Instructor: Dr. Constant Beugre
Jack Welch’s accomplishments
Jack Welch joined General Electric (GE) in 1960 and became vice president (1972) and then vice chairman (1979). In 1981 he became chairman and CEO of GE; at 45, he was the youngest person ever to have held that position. Having taken GE with a market capitalization of about $12 billion, Jack Welch turned it into one of the largest and most admired companies in the world, with a market value of about $500 billion, ...view middle of the document...
Welch sought opportunities for growth by reinvesting those billions and considered possible takeover targets. Indeed, there were more than 200 acquisitions in his first five years as CEO, the largest being the $6.3 billion acquisition of RCA in 1985. RCA's assets included not only its electronics and defense businesses, but also the NBC television network. This resulted in its becoming the world's largest manufacturing, technology, and service company, with 1999 revenues of over $110 billion. (Reference for Jack Welch & The G.E.Way)
The second revolution has to do with software: how to run GE's existing businesses better.
Jack Welch firmly believed that top performers deserved to be handsomely rewarded. He established a performance-review program to identify the top 20 percent of employees, who were accorded bonuses, as well as the bottom 10 percent, the "lemons," who were typically fired and replaced. (Reference for The New GE)
Welch instituted the Six Sigma program at GE. Initially implemented at Motorola and Allied-Signal, the program was developed to maximize the efficiency of manufacturing processes through the minimization of production of defective units. When applied at General Electric it became the largest quality-control measure ever adopted in corporate America. The program required a huge investment in training and tracking but ultimately led to great gains in profit and productivity. (Reference for Jack Welch & The G.E.Way)
Welch is seeking productivity gains by involving GE’s workers as well as its managers. In September 1988, Welch said to Jim Baughman, the former Harvard Business School professor in charge of Crotonville, "Jim, we have got to capture what happens here at Crotonville and push it across the whole company. We have to create an atmosphere where people can...