What is your evaluation of Welch's approach to leading change? How important was he to GE's success? What are the implications for his replacement?
Prior to stepping down as the CEO of General Electric (GE) on September 7, 2001, Jack Welch led many initiates that restructured the company to maintain its title as the world’s largest multi-business company. Welch was eager to implement changes that increased the productivity and quality of the company. He embraced change and encouraged his managers to do the same. He challenged his executives to be “better than the best”. Welch was very open about his vision for the company and encouraged an open communication corporate culture. He believed that General Electric could be the #1 or #2 competitor in its industry; therefore, he pushed his managers to meet that standard. One of Welch’s first priorities was to build a team of managers with “a strong commitment to the new management values, a willingness to break with the old GE culture, and most of all, the ability to take charge and bring about change” (p. 3). Welch was confidence in his vision of the company and took many bold steps to make his vision reality. He performed drastic restructuring by downsizing, de-staffing and delaying the organization. His goal was to make GE more “lean and agile”. Welch eliminated the sector level of the business, reduced the number of hierarchical levels, and eliminated approximately one hundred and twenty three GE employees. The “lean and agile” approach allowed Welch to develop a strong team that shared his values.
Welch did not stop at restructuring, he wanted to ensure that his new team of managers was able to adapt to the cultural changes that he was implementing. According to Bartlett (2000), “Welch articulated the management style he hoped to make GE’s norm an approach based on openness, candor, and facing reality” (p. 4). As a result, Welch launched the “Work-Out” and “Best Practices” program. The objective of the...
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