GE and Jack Welch

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Jack Welch - The Strategist Contd...

Creating this open, sharing climate magnifies the enormous and unique advantage of a multi-business GE, as our wide diversity of service and industrial businesses exchange an endless stream of new ideas and best practices." To promote strategic thinking and planning at GE, Jack Welch required operations executives to prepare a few simple slides describing the essence of their business situations. Benchmarking helped them address questions about competitive dynamics: • What does your global competitive environment look like? • In the last three years, what have your competitors done? • In the same period, what have you done to them? • How might they attack you in the future? • What are your plans to leapfrog them?

When Jack Welch returned from a visit to Wal-Mart after studying the practices of the world's largest retailer, he communicated his experiences in his annual letter to shareholders in GE's annual report: "In 1991, we shared best practices with a number of great companies. We learned something everywhere, but nowhere did we learn as much as at Wal-Mart. Sam Walton and his strong team are something very special. Many of our management teams spent time there observing the speed, the bias for action, the utter customer fixation that drives Wal-Mart; and despite our progress, we came back feeling a bit plodding and ponderous, a little envious, but, ultimately, fiercely determined that we're going to do whatever it takes to get that fast."

Jack Welch felt that one of his important jobs was to transfer best practices across all the businesses, with lightning speed and with the help of business leaders. To achieve this, every Corporate Executive Council (CEC) meeting dealt in part with a generic business issue - a new pay plan, a drug-testing program, and stock options. Every business was free to propose its own plan or program and present it at the CEC. However, the details of the plan were not approved immediately. Jack Welch wanted to know what the details were so that he could see which programs were working and immediately alert the other businesses to the successful ones.

GE had always been a global company. In mid 1960s, Reuben Gutoff and Jack Welch formed two joint ventures in plastics - one with Mitsui Petrochemical of Japan and the other with AKU of Holland, a chemical and fiber company. Under Jack Welch, GE further expanded into Europe with the purchase of a majority stake in Tungsram, Hungary's largest and oldest lighting business. GE became the No.1 light bulb maker in the world following the acquisition of Thorn Lighting in the UK,. In September 1989, Jack Welch visited India, and formed a 50-50 medical venture with Wipro⁷.

The early 1990s saw GE push its globalization efforts through acquisitions and alliances and by moving its best people onto global assignments. Analysts felt that GE focused its attention on countries that were either in transition or out of favor. For instance, during mid-1990s, when European economy was sluggish, GE saw many opportunities, particularly for financial services. Around the same time, when Mexico devalued the peso and its economy was in turmoil, GE made over 20 acquisitions and joint ventures. This significantly increased GE's production base.

Jack Welch - The Leadership Guru

After stepping down as the CEO, Jack Welch became an advisor to William Harrison, CEO, JP Morgan Chase. He also entered into an agreement to become a leadership guru to several other clients. He was also named the special partner at New York investment firm, Clayton, Dubilier & Rice. Jack Welch also authored his autobiography, 'Jack: Straight from the Gut', which was at the top of the best-sellers list in 2001.

Analysts felt that Jack Welch's influence did not end at GE. Many executives who had worked under Jack Welch went on to head more than a dozen U.S. companies. Hundreds more held senior corporate posts across the globe. Workers and employees who had never been near GE were also familiar with Jack Welch's management style including his employee ranking systems. It remained to be seen how well Jeffrey Immelt, the new CEO, who was groomed by Jack Welch, could carry the legacy of Jack Welch at GE.

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7] Wipro Technologies, based in Bangalore, India, is the global technology services division of Wipro Limited. (NYSE:WIT) established about two decades back. The company offers services for business transformation and product realization and also solutions for the service provider market.