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At the same time, GE was dealing with a new level of competition on the global scale, with many competitors from Japan working their way into Gee’s market share. Welch was expected to provide a strategy for GE to grow and succeed in this challenging economy and develop a way to keep GE profitable. Jones was known for his strategic leadership and his Implementation of “sectors” in the management structure of GE. This overhead was needed to manage the massive amount of strategic planning that was occurring in the company, but Welch saw potential in changing this hierarchical structure to a more simple structure.
Welch saw Jones’ structure was Inefficient and was quoted as saying ‘We don’t need the questioners and checkers, the nitpickers who bog down the process.
.. Today, each staff person has to ask, “How do I add value? ” (Bartlett & Woozy, 2005, peg. 3). Welch took charge with several very effective Initiatives shortly after his rise to CEO.
Many of his decisions were unpopular because they led to reduction In the workforce at GE. It is never easy for a company to accept job loss, but in this situation, GE would not have been nearly as successful without the changes.
One of Wheel’s strategic decisions was that each of the business units strive to be #1 or #2 in their Industry or to disband. The result of this Annihilative was GE selling off more than 200 businesses between 1981 and 1990, resulting in over 200,000 jobs (Bartlett ; Woozy, 2005, peg. 2).
While this decision may have negatively effected many individuals, it was a very effective move for the company. Ensuring that less than successful branches did not bog down the corporation allowed the remaining branches to focus on Improving and becoming even more profitable.
Every move Welsh made had the goal to increase efficiency at GE and make the company more 1 OFF success LU. T “Welch Delves Tanat encircles In Dustless are Intently, a Talon grounder in the belief that there are no bounds to human creativity’ (Byrne, 1998). Welch made amazing strides to introduce lean efforts at GE, including the implementation of Six Sigma. The proof of how effective Walsh’s decisions were can be seen in the numbers.
Between 1981 and 1985, operating profits rose from $1. 6 billion to $2. 4 billion (Bartlett & Woozy, 2005, peg. 3). 2.
What was Wheel’s objective in the series of initiatives he launched in the late ass’s and early sass’s? What was he trying to achieve in the round of changes he put in motion in that period? Is there a logic or rationale supporting the change process? Wheel’s focus in the early sass’s was to set up the right structure in the company and make big changes in organization, but he recognized that the culture of the company had to change if the efficiency was to be maintained.
Therefore, he focused on corporate culture and values in the late ‘ass and early ‘ass.
The major initiatives that were implemented during this time were Work-out, Best Practices, Globalization, and leadership development. Work-out was implemented to encourage a small company feel in a large business; encouraging feedback at all levels rather than the hierarchical communication method that was used in the past. This was a value very important to Welch, who struggled with the corporate business feel at GE when he started his career in the company. In fact, Welch nearly left the company after only working there for a year.
He felt stifled by the company’s bureaucracy, underrepresented by his boss, and offended by the civil service-style $1,000 raise he was given” (Byrne, 1998). Wheel’s manager at the time convinced him that he could experience the mall-company values with big-company resources; a decision that obviously impacted Wheel’s management style as the CEO years later. Work-out was extremely successful in altering the culture at GE; “people inside and outside GE consider the Work-out program to be perhaps the single most vital part of the Welch revolution” (Klein, 2003). Best Practices” was implemented to learn from other companies who were achieving better productivity than GE. The team put in charge of “Best Practices” studied 9 other companies to identify lessons learned that could be implemented across GE to increase productivity. Welch believes it was his leadership teams’ responsibility to identify these opportunities and ensure they are acted upon; “Another of our Jobs is to transfer best practices across all the businesses” (Itchy and Ram, 1989).
This initiative put GE in a place to bring the best ideas from the best performing companies into their baseline process, a significant equation for success. By the late sass’s, the restructuring phase of Wheel’s vision had been implemented at each of Gee’s U. S. Based locations but focus for growth was specific to U. S. Business.
The late sass’s expanded Wheel’s vision globally. One of the most unique approaches that Welch used for GE was to enforce the idea that each individual business unit of GE should have their own globalization strategy rather than trying to push the corporate globalization strategy on each business.
This gave the managers of these units the flexibility to make the best decision for their Dustless Ana Ministry unlikely. Welch again pusses Nils managers outside e r comfort zone by changing the rules of the #1 or #2 strategy; the business units were asked to measure themselves on the global market instead of the U. S.
Market. This shift made even successful business units push themselves harder for efficiencies ND growth opportunities. Lastly, Welch has a real passion for developing good leadership and brought this passion to every level of GE.
In an interview with Noel Itchy and Ram Charka at Harvard Business Review, Welch defined what makes a good “manager”: “Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion.
Above all else, though, good leaders are open. They go up, down, and around their organization to reach people. They don’t stick to the established channels. They’re informal. They’re straight with people. They make a religion out of being accessible.
They never get bored telling their story. In order to develop this strong leadership within GE, Welch put an emphasis on the values of the GE culture and the importance of having managers that believed in these values. One of Wheel’s most well known initiatives was the Cornerstone management development facility. The focus on this facility was to develop a generation of leaders who were tied in with Gee’s vision and culture (Bartlett & Woozy, 2005, peg. 7). Welch correctly believed that if he had management that believed in the culture he was trying to enforce, this would drive the culture change to the entire organization.
A leader who was achieving results, but did not show an alignment with the corporate culture were removed from the organization; the numbers and results were not a factor. 3. How does such a large, complex diversified conglomerate defy the critics and continue to grow so profitably? Have Wheel’s various initiatives added value? If so, how? A company like GE continues to grow profitability by trying to make the company management simple. Each business manager truly owns that business, even though they report to the CEO.
They work together to share lessons learned so that each of their companies are more efficient and successful.
They strive for efficiency with each decision they make. Ownership is expected at all levels of the company and each employee feels as if they are heard and their opinions and ideas matters. Wheel’s initiatives have most certainly added value. Work-out, for instance, sets GE up for great success with the Millennial entering the work force who are motivated by important, interesting work and understanding their impact in their company.
Wheel’s vision for a small company attitude with big company resources will really resonate with this group of workers.
Also, by developing generation after generation f strong leaders, they ensure that no personnel change will leave a vacuum of leadership. This program also allows the potential leaders to feel more valued by their employer because their employer is actively developing their skills. Globalization and diversification give GE a strategic advantage for the future as well. GE has shown its ability to consistently take advantage of opportunities globally and seeing the advantage in potentially negative situations (ex.
Investing in Europe during the economic downturn between 1989 and 1995).
4. What is your evaluation AT wellness approach to leaning change? How Important Is nee to success? Want are he implications for his replacement? I think Welch had the vision to see the potential for growth within GE and the strength to see it implemented. Many would have been daunted by the idea of the plant and business closing that Welch implemented in the early sass’s. Some may have lost confidence in their vision as they received criticism and comparisons to the previous leadership.
But Welch believed in his ideas and saw them through, pushing GE to new heights and fantastic growth.
I think Welch is very important to Gee’s successful now and into the future because of his belief in the importance of developing people. The work he has done o develop leaders within the company will continue to provide a good example to the company and ensure that the leaders of the company continue to believe in the values that Welch defined for Gee’s future. I think that Wheel’s replacement is put in a similar situation that Welch himself felt back in 1981.
Jeff Melt was Wheel’s handpicked successor and Welch left a lot of expectations on Millet’s shoulders. Melt was expected to build upon the work Welch did during his reign, but he also has to be able to evolve with the changing market and changing expectations of employees entering the workforce. CEO of GE Capital South East Asia, De Eng, nominated in an interview at Singapore Management University, sure many of you now would pause before you consider working for a leader like Jack (Welch) because he has such a tough reputation.
