Pdf-Jack Welch Transformational Leadership
Jack Welch
September–October 1989
> September–October 1989
Speed, Simplicity, Self-Confidence: An Interview with Jack Welch
An Interview with Jack Welch by Noel Tichy and Ram Charan
John F. Welch, Jr., chairman and CEO of General Electric, leads one of the world’s largest corporations. It is a very different corporation from the one he inherited in 1981. GE is now built around 14 distinct businesses—including aircraft engines, medical systems, engineering plastics, major appliances, NBC television, and financial services. They reflect the aggressive strategic redirection Welch unveiled soon after he became CEO.
By now the story of GE’s business transformation is familiar. In 1981, Welch declared that the company would focus its operations on three “strategic circles”—core manufacturing units such as lighting and locomotives, technology-intensive businesses, and services—and that each of its businesses would rank first or second in its global market. GE has achieved world market-share leadership in nearly all of its 14 businesses. In 1988, its 300,000 employees generated revenues of more than $50 billion and net income of $3.4 billion.
GE’s strategic redirection had essentially taken shape by the end of 1986. Since then, Welch has embarked on a more imposing challenge: building a revitalized “human engine” to animate GE’s formidable “business engine.”
His program has two central objectives. First, he is championing a company-wide drive to identify and eliminate unproductive work in order to energize GE’s employees. It is neither realistic nor useful, Welch argues, to expect employees of a decidedly leaner corporation to complete all the reports, reviews, forecasts, and budgets that were standard operating procedure in more forgiving times. He is developing procedures to speed decision cycles, move information through the organization, provide quick and effective feedback, and evaluate and reward managers on qualities such as openness, candor, and
September–October 1989
> September–October 1989
Speed, Simplicity, Self-Confidence: An Interview with Jack Welch
An Interview with Jack Welch by Noel Tichy and Ram Charan
John F. Welch, Jr., chairman and CEO of General Electric, leads one of the world’s largest corporations. It is a very different corporation from the one he inherited in 1981. GE is now built around 14 distinct businesses—including aircraft engines, medical systems, engineering plastics, major appliances, NBC television, and financial services. They reflect the aggressive strategic redirection Welch unveiled soon after he became CEO.
By now the story of GE’s business transformation is familiar. In 1981, Welch declared that the company would focus its operations on three “strategic circles”—core manufacturing units such as lighting and locomotives, technology-intensive businesses, and services—and that each of its businesses would rank first or second in its global market. GE has achieved world market-share leadership in nearly all of its 14 businesses. In 1988, its 300,000 employees generated revenues of more than $50 billion and net income of $3.4 billion.
GE’s strategic redirection had essentially taken shape by the end of 1986. Since then, Welch has embarked on a more imposing challenge: building a revitalized “human engine” to animate GE’s formidable “business engine.”
His program has two central objectives. First, he is championing a company-wide drive to identify and eliminate unproductive work in order to energize GE’s employees. It is neither realistic nor useful, Welch argues, to expect employees of a decidedly leaner corporation to complete all the reports, reviews, forecasts, and budgets that were standard operating procedure in more forgiving times. He is developing procedures to speed decision cycles, move information through the organization, provide quick and effective feedback, and evaluate and reward managers on qualities such as openness, candor, and