GE’s Two Decade Transformation

Group 4Subhojit BagchiDebroop BanerjeeShreyans BenganiRavi ChawlaNaman GoelSoniya GunjikarAswati Maria JoseMukti Maloo

1. How difficult a challenge did Welch face in 1981? How effectively did he take charge

• US economy was in recession• High interest rate • Strong Dollar - causing high unemployment • Vacuum created by Jones’ exist

Steps taken by Welch :• Convinced the team to strive for the best• De-staffing, delivering & downsizing • People were made to believe that they need to perform to stay• Dropping businesses which couldn’t show high growth • Investing into other businesses • Scrapped the strategic planning process & made it more real time and short• Reduced bureaucracy

2. What is Welch’s objective in the series of initiatives he launched in the late 1980s and early 1990s? is there a logic or

rationale supporting the change process

• 1980s started with culture shock and management exhaustion• Welch believed he had hardware in terms of Removing

Bureaucracy, Downsizing, etc in place but he needed Software or culture change to sustain his efforts

Speed, Simplicity, Self- Confidence

Openess, Candour, Facing Reality

Core Elements Management Style

Objective- Change culture of Organization from Bureaucratic thinking to a place for high achievers

3. How would you evaluate Welch’s approach to leading change

Vision

Process

People

Sustainable

Welch’s Change ProcessWelch’s 8 Step Process to Leading

Change

Vision

Long-Term Strategy

Structured Change Blueprint

Communication

Resource Selection (People who would implement)

Empowering the Change Managers

Guiding, Reviewing and collecting Feedback

Institutionalizing and Sustaining

Hardware: Restructuring

Software: Work-out & Best

Practices

Globalization

• PEOPLE – Developing Leaders• PEOPLE & PROCESS – Boundaryless Organization• PROCESS – Six Sigma• PROCESS – Stretch• VISION – Services Focus• VISION – E-business

Evaluation• Visionary• Effective• Inspiring• Value driven• Speed

4. How important is Welch to GE’s success? What are the implications for his replacement

Jack Welch Jeff Emmelt

• Promoted internal communication• Focus on performance and strictly

quantifiable results• Mostly promoting from within• Focused on production• Demanding and intimidating

• External communication (Investors and third parties)• Allowed employees to come up with innovative ideas• Brought a number of outsiders to the organisation• Focused on marketing• Made GE more environmentally conscious• Friendlier and more approachable

Effective Strategic Leadership

Managed firms resources portfolio

Established Balanced Organisational

Controls

Sustaining an effective organisational culture

Emphasizing ethical practices

Determining Strategic direction

5. Discuss your views on how such a large, complex diversified conglomerate can continue to grow so profitably. How have

Welch’s various initiatives added value?

GE as Conglomerate – Defying Convention and Critics

• Long term vision• Turning that into an effective strategy and implementation plan• #1, #2 or Close: Cutting down vestigeal organs, making the organization lean and agile• Opening communication among BU’s and facilitating cross learning• Focus – Investment – Facilitation – Review

What Works for GE

Focus

Investment

Facilitation

Sustenance• Lean • AgileStructure• Evolving• OpenCulture• A Players• 4 EsPeople• #1, #2, Close• Best PracticesStrategy

Forming a single strategy for such a diverse company is difficult

Thus vision and strategy must reflect soft aspects like entrepreneurial spirit, high spirited culture, a place for high achievers which would percolate to all businesses