There were 118,000 employees in all, including 37,000 employees in the businesses that were closed. The media opposed his policies and this massive layoffs and closures earned him the title unflattering moniker “Neutron Jack”.
In spite of the high resistance from outside, Welch remained much focused on his job. In mid 1970’s he was carried away by the high efficiency and their competitive cost structure of Japanese in the industry, this in turn led to fear that Japanese would pose a threat to GE. As a result, he acquired a Japanese company RAC for $6.3bn in 1985 with the main aim of getting NBC that would transform the company.
Jack wanted to free the company from beurocracy and make it more a people’s company, where ideas flourished and boundaries vanished. Welch strongly believed that "Culture does count, big time." Therefore, he laid much stress on "boundary less" culture where the employees of all the levels of the company equally participated in the problem solving and innovation. As the strategy of people’s culture took off and assumed momentum, Jack ordered all the 4,000 managers of the company to thoroughly analyze their staff on annual basis. The top 20 percent of the staff were nurtured and strongly rewarded. The middle 70 percent of the workers were more needed and crucial for the operations of the company and the remaining 10 percent of the employees were to be improved or eliminated. This“Vitality Curve” was the base to construct a “People Factory”, resulting in retaining the best talent in the corporation.
With the spirit of early successes, Welch moved ahead and bought “Kidder” one of the Wall Street’s oldest investment firms in 1986, against the advice of few key board members. Welch later said it was the biggest mistakes that he had ever made in his entire career and that “The Kidder experience never left him”. It was a classic case of hubris, a scandal erupted, and there was an insider trading in exchange of cash.
In the second phase of transformation, Welch focused on four basic initiatives like Globalization, Services, Six-Sigma, and e-business for which Welch became more iconic. During the globalization, Welch traveled around the world making deals in different countries like India, Japan, China, Hungary etc and was never a person to sit in the head office. The countries, which were either in transition or out of favor, were targeted. Welch managed to finish his first big deal in New Eastern Europe. Meanwhile under remarkably excellent leadership of Jack, the services division grew from $8bn in 1995 to $19bn in the year 2001.During his tenure, GE market value grew from $13 billion to $500 billion.
In 1996, Welch recognized that quality has become growing concern for the growth of business. Therefore, he implemented a mathematically designed program called Six Sigma, which improved processes, decreased deviations, and created more perfect products at relatively low cost. Today this program is embraced at all levels of GE.
Though Welch was little late in entering the e-business market, the impact it had on the company was huge and allowed GE to broaden and expand its markets, finding new customers and make its supplier base more global.
Jack Welch worked for General Electric Company from 1960 until 2001. From 1981 to 2001, he was its Chairman and CEO. On September 7, 2001, Jack Welch said goodbye to the company, and the people, who have comprised the whole of his business life. He appointed Jeff Immelt to succeed him and set in place a staff that he believes will support his successor, and set a glorious future to the company. He is a reputed strategist, great visionary who could realize his strategies and moved the company towards success. Finally he transformed the company as he wished from a beaurocratic company to a more dynamic and competitive company in the whole world. He is a role model for all the upcoming business people. He is the author of many books like Winning, Straight from the gut etc in which he revealed his management and leadership styles and approaches, so that they would guide future generation managers and leaders.
Jack Welch joined General Electric in 1960 soon after completing his masters and PhD. He started his career at GE as a junior chemical engineer in Pittsfield, Massachusetts, for salary of $10,500 like any other person. Once he accidentally blew up the roof of the factory while working on a plastics project. No doubt, that Welch was blunt and candid, which alienated few people, but was named a company manager at a young age of 32, the youngest in GE history. After a year in GE, he got a very minimum raise of only 1000 dollars for which he was more displeased, and in addition to this the invaded bureaucracy within the company made him leave the company to work with International Minerals & Chemicals in Skokie, Illinois.
Ruben Gutoff, an young executive two levels higher than Welch, identified that Welch was the more valuable, highly potential and important human capital, which the company cannot afford to lose. Therefore, he persuaded and convinced Welch to be back in the company. The lines of persuasion go as follows “"Trust me," Gutoff remembers pleading. “As long as I am here, you are going to get a shot to operate with the best of the big company and the worst part of it pushed aside." "Well, you are on trial," retorted Welch. "I'm glad to be on trial," Gutoff said. "To try to keep you here is important." At daybreak, Welch gave him his answer. "It was one of my better marketing jobs in life," recalls Gutoff. “But then he said to me--and this is vintage Jack--'I'm still going to have the party because I like parties, and besides, I think they have some little presents for me.'"
Twelve years later Welch took charge as the Vice President of GE in 1972. Later he climbed up the corporate ladder to become Senior Vice President in 1977, Vice Chairman in 1979. Finally, he achieved his long-term goal of becoming CEO of GE in 1981, with Reginald H. Jones as his successor. He was the youngest Chairman and CEO of the company. This was the initiation for change in management and transformation of GE in 1982.
More about Jack Welch