Achievements
Jack Welch grew to fame in the business world through his management success and leadership skills during his 20 years as CEO of General Electric. He turned a sluggish bureaucratic giant into fast growing flexible company. He led the company to massive revenue surge. In 1980, the year before Welch became CEO, GE recorded revenues of $26.8 billion; in 2000, the year before he left, they were nearly $130 billion. He was named “Manager of the Century” by Fortune magazine, “The Most Admired CEO of the last 20 years” by Chief Executive Magazine and “The World’s Greatest Leader” by Fast Company magazine.
Career Highlights
Jack Welch was born in Peabody, Massachusetts to Irish-Catholic parents. His father was a Boston & Maine Railroad conductor, his mother - a housewife. He attended Salem High School and later the University of Massachusetts Amherst, graduating in 1957 with a Bachelor of Science degree in chemical engineering.
Welch joined General Electric in 1960, but soon he was displeased with the $1,000 standard raise he was offered after his first year, as well as the strict bureaucracy within GE. He planned to leave the company but Reuben Gutoff, a young executive two levels higher, convinced him to stay. Welch agreed and built a successful career. He was named vice president of GE in 1972. He moved up the ranks to become senior vice president in 1977 and vice chairman in 1979. Welch became GE's youngest chairman and CEO in 1981, succeeding Reginald H. Jones.
Through the 1980s, Welch worked to streamline GE and make it a more competitive company. He wanted GE to be a company filled with self-confident entrepreneurs who would face reality and perform every day.
Under Jack Welch’s direction General Electric became one of the most valuable and largest companies in the world. He was the first to step on the path of war for talent and was named for that… one of the cruelest managers of the 20th century. Journalists coined him with the moniker “Neutron Jack” (in reference to the neutron bomb) for eliminating employees while leaving buildings intact. Some people hated him but nobody could deny that he is one of the greatest business leaders.
Leadership Experience
Throughout his career Welch was always learning from all the leaders he worked with. What he hated about the organization in his early days as a chemical engineer, is exactly what he transformed as CEO: the red tape and bureaucracy of the company. He changed that by making it an informal learning environment. This informal approach allowed Welch to get to know his employees, interact with them and get involved in all aspects of the business. Welch also prided himself on his personal touches, such as the handwritten memos sent to employees.
Welch was sure that the psychological contract between the corporation and its employees had to change. He wanted to create a new contract, making GE jobs the best in the world for people willing to compete. He was ready to do everything to give them the skills to have “lifetime employability”, even if he couldn't guarantee them “lifetime employment.” Each year he fired the bottom 10% of his managers. He earned a reputation for brutal candor in his meetings with executives. He pushed his managers to perform, but he rewarded those in the top 20% with bonuses and stock options. He also expanded the stock options program at GE from just top executives to nearly one third of all employees. Welch is also known for destroying the nine-layer management hierarchy and bringing a sense of informality to the company. He was adding fuel fire shutting down factories, reducing payrolls, cutting lackluster old-line units. He was also investing millions of dollars in what some might call “nonproductive” things: building a fitness center, guesthouse, and conference center, etc.
He spent a lot of time hiring “right” people. As he put it: “In the early days, I fell in love with great resume filled with degrees in different disciplines”,. “They could be bright and intellectually curious, but they often turned out to be unfocused dabblers, unwilling to commit, lacking intensity and passion for any one thing. Eventually, I learned that I was really looking for people who were filled with passion and a desire to get things done. A resume didn't tell me much about that inner hunger. I had to “feel” it”.
Backgrounds Links
Jack Welch, Jack: Straight From The Gut, 2001
