GE and Jack Welch

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Jack Welch's Leadership Style Contd...

Objectives of Session C Meetings • To review the effectiveness of the organization and any plans to change. • To review and provide feedback on the performance, promotability, and developmental needs of the top management. • To review plans and suggestions for backup planning for key management jobs. • Early identification of high-potential talent to ensure appropriate development. • To focus special attention on key corporate or business messages. Analysts felt that one of the best ingredients of GE's people issues was the reward system. Jack Welch made sure that the best business leaders were rewarded properly. To identify the best, Jack Welch relied on the Vitality chart (Refer Figure I). Using the chart, the employees were sorted as As, Bs, and Cs.

The chart was used by senior GE executives during Session C process to make sure that GE' s best performing employees were being rewarded and recognized. In some cases, the reward was a stock option. In his early days as the CEO, GE had granted stock options to only 200 employees. Eventually Jack Welch made a point of spreading those options throughout large segments of the company - including thousands of employees. By March 1999, the figure rose to 27,000.

Jack Welch had actually become a 'teacher' within GE. At Crotonville, Jack Welch led more than 250 class sessions and trained more than 15,000 GE managers and executives. He went to the academy every two weeks, for 17 years to interact with new employees, middle managers, and senior managers. Each session at the academy lasted for about four hours. Jack Welch asked questions and then challenged the employees to answer.

However, Jack Welch realized that his message was not getting across to the entire company and he was not as convincing as he hoped to be. He said, "I was intellectualizing the issues with a couple of hundred people at the top of the company, but clearly I wasn't reaching hundreds of thousands of people."⁵ To reach those people, Jack Welch initiated a powerful-in-house communication system. After Jack Welch gave a leadership speech at GE's January management meeting, the next day, 750 video copies of the speech were dispatched to GE locations around the world. The tapes were prepared in eight different languages.

Jack Welch identified four qualities of leadership, all starting with letter E, and named it E4. (Refer Box) He connected the four E's with one P - Passion. According to him, it was the passion that separated the A's from B's. The B's were very important to the company and were encouraged to search every day for what they were missing to become A's.

Source: "The GE Way Fieldbook", by Robert Slater

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5] 'Welch, An American Icon' by Janet Lowe.