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"Jack WelchGeneral Electricals Revolutionary.

Q1. If you were a middle manager at GE who survived Jack Welch's 12 years

from 1981 to 1993, how would you describe the way things developed at the

company -- the kind of company GE was when Welch took over; what did he do

about it; how did his approach change; does the work environment look different

in 1993 from 1987?

There has been a dramatic change in GE after Welch took over. Before Welch,

when Jones was the CEO of GE, he had a different structure of an organization.

He believed in a "sector" organization structure that represented a macro business

or industry area. He was knows as a "Management Legend" for his

accomplishments. Welch took over GE as the new chairman and chief executive

officer in April 1981. Welch believed in encouraging everyone to contribute to

improve the operations of the organization. He wanted employees be open

minded, outspoken and heard. He wanted everyone, from the top to the bottom

members of the organization to discuss the concerned issues and reach a solution.

He developed the "three circle concept" where all businesses were divided into 1.

core to focus on reinvestment in productivity and quality,, 2. high technology

to stay on the leading edge through acquisitions and large R&D investments, or

3. service areas to growby adding outstanding people who create new ventures

and by making contiguous acquisitions.

He wanted a company the size of GE needed to stay lean and agile to be

competitive. He acknowledged that becoming lean required destaffing, but he

stated that the company had no intention of becoming mean in the process.

Welch brought great cultural change in the organization. He wanted to change

the organization fundamentally and not just incrementally which meant opening

it up to the quantum change, means constantly asking not how fast am I going,

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how well am I doing versus how well I did a year or two before, but rather, how

fast and how well am I doing versus the world outside.

Welch believed in simplicity. He believed for a company like GE it was

important to be simple than complicated and complex. For him, simple meant

faster with clarity. He reduced the layers of the flow of information and reduced

it from 9 to 4 to enhance speed and reduce error. He believed in encouraging

speed, simplicity and self confidence in the organization.

Welch encouraged in cross-functional discussions, meeting with the business

leaders and other stake holders of the organizations, taking everyones opinion.

He truly opened up the organization. He also introduced a proper reward system

which encourages everyone and with higher rewards to the 'superstars' of the

organization. He managed the talent pool within the organization in a

constructive way by listening to them, taking their advices while discussing

about certain problems and allowing them to come up with new and innovative

ideas.

Welch started a practice in the organization called Work-Out. It is a three day

session which begin with a talk by the boss, who roughs out an agenda . Then the

boss leaves. Aided by the outside facilitator, the group breaks into five or six

teams, each to tackle part of the agenda. They go at it, listing complaints,

debating solutions, and preparing presentations for the final day. Third day the

boss, ignorant of what has been going on, comes back and takes a place at the

front of the room. One by one, team spokesmen rise to make their proposals. By

the rules of the game, the boss can make only three responses: he can agree on

the spot; he can say no; or he can ask for more information. Work-Out redefined

the relationship between the boss and subordinates and made the leaders creatorsand not controllers. It helped in building trust, loyalty and overall stability within

the organization.

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Welch also encouraged 'Best Practices' where a group of members from his

organization would visit and be trained in another organization with the aim to

improve productivity and get exposure to new procedures and new ideas.

Welch made GE into a boundary less organization. Suppliers were treated like

trusted partners. He discouraged the divisions between internal functions; it

recognizes no distinctions between `domestic and `foreign operations; and it

ignores or erases group labels such as `management, `salaried, and `hourly

which get in the way of people working together.

Welch linked GEs 13 businesses, and termed it integrated diversity, the ability

to transfer the best ideas, most developed knowledge and most valuable people

freely and easily across businesses in a boundary-less company. Both insiders

and outsiders had reservations about how much change these initiatives could

achieve and how quickly.

By 1993, under Jack Welch, GE became a place where people have the freedom

to be creative, a place that brings out the best in everybody. An open, fair place

where people have a sense that what they do matters, and where that sense of

accomplishment is rewarded in both the pocket, body and the soul.

Q2. How did Welch accomplish these changes? What roles did he play?

Minimizing Personal Baggage

Love thy neighbor as thyself

Mastering in Communication and PR

Using mentors and having a safe haven

Being fearless in your pursuit of your legacy

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Q3. Why did it seem necessary to develop Work Out? On what assumptions

about GE is it based?

Work-Out is, essentially, a forum where three things can happen: participants can

get a mental workout; they can take unnecessary work out of their jobs; they can

work out problems together Welch determined that the goal was to be number

one or number two in every business the company was in. Achieving this

required a common concern for quality and excellence. The practical objective is

to get rid of thousands of bad habits accumulated since the creation of General

Electric.. The second thing we want to achieve, the intellectual part,begins by

putting the leaders of each business in front of 100 or so of their people, eight to

ten times a year, to let them hear what people think about the company, what

they like and dont like about their work, about how theyre evaluated, about how

they spend their time. Work-Out will expose the leaders to the vibrations of their

business opinions, feelings, emotions, resentments, not abstract theories of

organization and management. apply the same relentless passion to Work-Outthat we did in selling the vision of number one and number two globally. Thats

why theyre pushing it so hard, getting so involved.

Q4. What is it that you have learned about general management from the

experience of Jack Welch?

From Jack Welch's methods of management we learn that it is important in an

organization to be transparent, share ideas from top to bottom of the organization

to be productive and be open to innovative idea to be a leader in any sector of

business. Diversity, integrating suppliers, manufacturers and distributors and all

other stakeholders can be used as a strength and the talent pool within and

outside the organization can be constructively used to improve the variousoperations and a smooth flow of ideas and co-operation between cross-functional

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sectors of the organization. High-spirited and an open work culture can bring an

unmatched level of excellence in an organization.