Introduction

Jack Welch began at General Electric (GE) in 1960. He became CEO of GE in 1980. By the time he retired in 2001 Jack took GE from a 14 billion dollar company to a 400 billion dollar company. He was named the Manager of the Century by Time in 1999.Mr. Welch was born in 1935. He received his B.S. degree in chemical engineering from the University of Massachusetts in 1957 and his M.S. and Ph.D. degrees in chemical engineering from the University of Illinois in 1960. In 1960, Mr. Welch joined GE as a chemical engineer for its Plastics division in Pittsfield, Massachusetts. He was elected the company's youngest Vice President in 1972 and was named Vice Chairman in 1979. In December 1980 it was announced that he would succeed Reginald H. Jones, and in April 1981 he became the 8th Chairman and CEO. He served in that position until he retired in September 2001. As CEO of GE, Mr. Welch's management skills became almost legendary. He had little time for bureaucracy and archaic business ways. Managers were given free reign as long as they followed the GE ethic of constant change and striving to do better. He ran GE like a small dynamic business able to change as opportunities arose or when a business became un-profitable.GE saw great growth and expansion under Mr. Welch's leadership. Through streamlining operations, acquiring new businesses, and ensuring that each business under the GE umbrella was one of the best in its field the company was able to expand dramatically from 1981 to 2001. In 1980, the year before Welch became CEO, GE recorded revenues of roughly $26.8 billion; in 2000, the year before he left, they were nearly $130 billion. The company went from a market value of $14 billion to one of more than $410 billion at the time of his retirement, making it the most valuable and largest company in the world, up from America's tenth largest by market cap in 1981. Mr. Welch is currently the head of Jack Welch, LLC, where he serves as Special Partner with the private equity firm, Clayton, Dubilier & Rice and is a consultant to IAC (Interactive Corp). He speaks to business audiences and students around the world and also teaches a leadership course at MIT's Sloan School of Management. Today, however, Welch views people as flowers to be cultivated rather than as objects to be destroyed. "Managers must walk around with a can of fertilizer in one hand and a watering can in the other," he says. Speaking to a standing-room only crowd at Wharton as part of the Zweig lecture series, Welch said that each employee is like a flower. "As a manager, you've got to be nurturing flowers all the time," he said. If this is done right, companies will end up with magnificent gardens. But with a hint of the old neutron touch, Welch added, "If the flowers don't grow, you've got to cut them out."

Welch's philosophy has certainly paid off handsomely for GE. During his tenure Welch has generated more than $200 billion in new wealth for GE's shareholders. As Fortune once wrote, "Ten thousand dollars put into GE at the start of Welch's term in 1980 would be worth $367,479, two-and-a-half times the value of an identical investment in the S&P 500."

Philosophies and Principles of Jack Welch to drive GE toward Success:

In his speech, Welch shared some principles and philosophies he espoused to drive GE towards success. Among them:

1. Involve everyone:
The most important principle for managing a large organization is that everyone must be involved in the game. GE took five years to break through its lumbering bureaucracy and convince hundreds of thousands of employees that their ideas mattered.
"An organization is like a building," Welch said. "Every floor is a layer, and every layer is a nuisance. Every wall is a functional wall. Think about detonating that building."

2. Create a learning organization:

A company's competitive advantage depends on its ability to learn, share that learning, and act upon it. GE, according to Welch, has learned from countless companies. The goal, he said, should be to create a "boundaries organization with speed and stretch." Boundary less organizations is those that go inside, outside, up and down the organizational chain to seek new ideas. Speed means a bias for action.

Example: GE bought 21 companies in four months in Mexico. By stretch, Welch meant

setting "limits based on your dreams," in contrast to the budget setting sessions at most companies, which are essentially "exercises in how little you

3. Be agile:
The need for agility stems from the unpredictability of the business world. "When I got this job in December 1980, America was in a malaise," Welch said. "Japan was going to take over the world. Oil was $35 a barrel and was likely to go to $100. Inflation was forever. Now, Japan is on its back, we are awash in oil, and inflation has disappeared."

Being agile allows companies to respond to such shifts in the marketplace. Citing another example, Welch said that until recently Asia was widely seen as the land of the future.

Jack Welch Four Es of leadership:

Welch's notion of leadership involves learning what he calls the four Es.
1. Energy:
Be everywhere as fast as you can be.

2. Energize others:
"You have no right to be a leader if you don't have it in your soul to build others," Welch said. "Nothing is worse than a whirling dervish who bores everyone. You need fertilizer and water."

3. Edge:
Managers must make tough calls when they have to. They must say yes or no. If the flowers don't grow, they must cut them out.

4. Execute:
Welch believes this is the biggest mistakes that most CEOs make. They make plans but fail to execute them. Welch believes that companies don't celebrate enough when their people win. They get so caught up in the daily grind of work that they don't stop to enjoy what they have achieved. "Do things that build people's self confidence," he said. "It's all about praising others and getting excited about their victories."
Create

Lessons from Jack Welch

a vision and then ignite your organization to make this Vision a reality:

Get people so passionate about what they are doing that they cannot wait to execute this plan. Have great energy, competitive spirit and the ability to spark excitement and achieve results. Search for leaders who have the same qualities.

 Focus

on strategic issues:

Your job is to understand the strategic issues within each of your businesses where they are going around the key questions. Know the talent they need to win in those markets and the amount of capital they need. And make bets.
Don't

micromanage:

Your job is to see the big picture. Don't manage every detail. Don't get caught up in the minutiae or obsess over every detail, but instead inspire others to execute of your vision. Surround yourself with great people and trust them to do their job and contribute their best to the organization.
Involve

everyone and welcome great ideas from everywhere:

Anyone can be a leader, just so long as they contribute, and the most meaningful way for anyone to contribute is to come up with a good idea. Business is all about getting the best ideas from everyone. New ideas are the lifeblood of the organization, the fuel that makes it run. "The hero is the person with a new idea." There is simply nothing more important to an organization than expressing ideas and creating a vision.
Lead

by Example:

To spark others to perform, you must lead by example. Jack Welch mastery of the four E's of leadership Energy, Energize, Edge, and Execution was always in evidence. "He had great energy, sparked others, had incredible competitive spirit, and had a record of execution that was second to none. This is a key of the Welch phenomenon. Had he been lacking in any of the traits he espoused, he would not have commanded such acclaim.

Leadership Secrets of Jack Welch

(A). Lead More, Manage Less:
1. Lead: Managers muddle - leaders inspire. Leaders are people who inspire with clear vision of how things can be done better. 2. Manage Less: We are constantly amazed by how much people will do when they are not told what to do by management.

3. Articulate Your Vision: Leaders inspire people with clear visions of how things can be done better. The best leaders do not provide a step-by-step instruction manual for workers. 4. Simplify: Keeping things simple. Simple messages travel faster, simpler designs reach the market faster and the elimination of clutter allows faster decision making. 5. Get Less Formal: You must realize now how important it is to maintain the kind of corporate informality that encourages a training class to comfortably challenge the bosss pet ideas. 6. Energize Others: Genuine leadership comes from the quality of your vision and your ability to spark others to extraordinary performance. Getting employees excited about their work is the key to being a great business leader. 7. Face Reality: Face reality, then act decisively. Most mistakes that leaders make arise from not being willing to face reality and then acting on it. 8. See Change as an Opportunity: Change is a big part of the reality in business. 9. Get Good Ideas from Everywhere: New ideas are the lifeblood of business. The operative assumption today is that someone, somewhere, has a better idea; and the operative compulsion is to find out who has that better idea, learn it, and put it into action - fast. 10. Follow up: Follow up on everything. Follow-up is one key measure of success for a business. 11. Get Rid of Bureaucracy: The way to harness the power of your people is to turn them loose, and get the management layers off their backs, the bureaucratic shackles off their feet and the functional barriers out of their way.

(B). Build a winning Organization:

12. Eliminate Boundaries: In order to make sure that people are free to reach for the impossible, you must remove anything that gets in their way. Boundary less ness describes an open organization free of bureaucracy and anything else that prevents the free flow of ideas, people, decisions, etc. 13. Put Values First Dont focus too much on the numbers. Numbers arent the vision; numbers are the products. 14. Cultivate Leaders: Cultivate leaders who have the four Es of leadership: Energy, Energize, Edge, and Execution 15. Create a Learning Culture: The desire, and the ability, of an organization to continuously learn from any source, anywhere - and to rapidly convert this learning into action - is its ultimate competitive advantage.

(C) .Harness Your People for Competitive Advantage:

16. Involve Everyone: Business is all about capturing intellect from every person. The way to engender enthusiasm it to allow employees far more freedom and far more responsibility. 17. Make Everybody a Team Player: Managers should learn to become team players. Take steps against those managers who wouldnt learn to become team players. 18. Stretch: Stretch targets energize. We have found that by reaching for what appears to be the impossible, we often actually do the impossible; and even when we dont quite make it, we inevitably wind up doing much better than we would have done. 19. Instill Confidence: Self-confident people are open to good ideas regardless of their source and are willing to share them.

20. Have Fun: Fun must be a big element in your business strategy.

(D). Build the Market-Leading Company:

21. Be Number 1 or Number 2: When youre number four or five in a market, when number one sneezes, you get pneumonia. When youre number one, you control your destiny. 22. Live Quality: We want to change the competitive landscape by being not just better than our competitors, but by taking quality to a whole new level. 23. Constantly Focus on Innovation: You have just got to constantly focus on innovation. and more competitors. Youve got to constantly produce more for less through intellectual capital. Shun the incremental, and look for the quantum leap. 24. Live Speed: Speed is everything. It is the indispensable ingredient of competitiveness. 25. Behave Like a Small Company: Small companies have huge competitive advantages. They are uncluttered, simple informal. They thrive on passion and ridicule bureaucracy. Small companies grow on good ideas - regardless of their source. They need everyone, involve everyone, and reward or remove people based on their contribution to winning. Small companies dream big dreams and set the bar high - increments and fractions dont interest them.

Jack Welch's Six Rules for Successful Leadership

1. Control you destiny or someone else will spot on 2. Face reality as it is, not as it was or as you wish it to be pretty good 3. Be candid with everyone two thumbs up 4. Dont manage, lead its working 5. Change before you have to, always one step ahead 6. If you dont have a competitive advantage, dont compete cant rate