Business, the Jack Welch Way: 10 Secrets of the World's Greatest Turnaround King

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Business the Jack Welch Way
10 Secrets of the World’s Greatest Turnaround King
By Stuart Craner

In Summary
1. Make your job description easily understood…and then tell everyone 2. Revolutionize, don’t tinker
3. Change continually
4. Think positive
5. Surround yourself with quality
6. Learn, always
7. Keep it simple, stupid
8. Look after your people
9. Plan succession
10. Make mistakes

The life and times of Jack Welch
• At the age of 33 he became GE’s youngest general manager • Jack Welch was an “entrepreneur …willing to take well considered business risks – and at the same time know how to work in harmony with a larger business entity” • The natural average life span of a corporation should be as long as two or three centuries, however the reality is that companies usually die young – 12.5 years or 40 years, for a multinational • Failure is attributed to the focus of managers on profits and the bottom line rather than on the human community that makes up their organization • For a company to survive, it has to be more like Ronald Reagan than James Dean • A successful company is one that can learn effectively • GE’s genius has been the faultless succession planning of CEOs • Success is also dependant on the climate of the company: respect for one another and working at our jobs to have as much fun as possible, keeping it simple and not being too smart • It is better and cheaper to nurture and promote from within • Jack Welch was considered to be a prophet/crusader whose management perspective…brought a renewed sense of purpose to the company • During the 1980s, Welch overhauled the whole business, throwing some entities out and acquiring others. Nearly 200,000 GE employees left the company and over $6b was saved • The leader who tries to lead a large organization counter to what his followers perceive to be necessary has a very difficult time • By the end of the 1980s, GE was leaner, fitter and devoid of complacency • Shun the incremental and go for the leap

• Jack Welch doesn’t understand halfway measures
• Work-out: the relentless company-wide search for a better way to do everything we do • Six Sigma: the spread of responsibility for quality – quality was an issue for everybody in the company

• The GE business:
o Aircraft engines
o Appliances
o Capital services
o Industrial systems
o Information services
o Lighting
o Medical systems
o Broadcasting
o Plastics
o Power systems
o Transportation systems
• Welch set a new contemporary paradigm for the corporation that is the model for the twenty-first century • GE wasn’t ailing in the first place, but it wasn’t going anywhere either • The essential ingredients of the Jack Welch style of management: o Invest in people: He talks, pontificates, cajoles and educates. But most of all, he connects. o Dominate your market…or get out: He wants to be first or a close second. Gain leadership, take the market by the scruff of the neck and lead it forward. o Never sit still: GE never rests on its laurels. It changes and then changes again. It is always nearer to achieving its goals by never staying in one place o Think service: GE used to be a manufacturing company that was also a service company. Under Welch, GE is now a service company that is also a manufacturing company. Quality and service link its activities o Forget the past; love the future: GE embraces the new. Welch speaks enthusiastically about the future. GE creates the future. o Learn and lead: the new model leader is not a corporate dictator. The leader is committed to learning, deciding and moving forward. Learning from failure is more important than wallowing in success. o No bull: talk straight –...
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