Jack Welch was not at the origin of General Electric - the company was more than a hundred years old when he took over the reins, but he managed to transform it and write books about it. To the surprise of many experts who argued that GE was too big for its shares to grow, and investing in it only for the sake of dividends, during two decades of leadership, Welch increased its value by 40 times.

stutter boy

Jack Welch was born on November 19, 1935 in Peabody. His parents, father John Francis Welch and mother Grace, tried to instill in their son a sense of self-confidence, which was useful to him throughout his career.

As a child, Jack stuttered a little, but this did not stop him from excelling in school and sports. He received a degree in chemical engineering in 1957 and a PhD in 1960 before joining General Electric as an associate engineer.

Always give more than what is asked

Jack Welch, whose biography at GE began with the development of a new plastic for industrial applications, polyphenylene oxide (PPO), worked with a small development team. Because of GE's vast structure, he eventually had to "sell" his project to senior scientists in order to get their help.

Welch installed a good relationship with Ruben Gutoff executive director GE, always doing more than he was asked to. When a project manager needed a project analysis, Jack provided it, along with a cost analysis for similar products from competing companies like DuPont. It was part of his strategy to stand out from the crowd by exceeding expectations and offering a new and possibly valuable perspective to his superiors.

Failed dismissal

When the bureaucratic nature large corporation What GE was like began to annoy Welch, in particular, the same allowances for all employees of the first year of work, he tried to quit. However, Gutoff persuaded him to stay by offering him a large pay raise and promising managerial positions in the future. So Rudolph agreed to help Jack bypass some of the bureaucracy that plagued GE. The special treatment he received from the chief executive strengthened his confidence in the differentiation policy he subsequently adopted. Jack Welch, whose quotes are very popular, said on this occasion: "Differentiation brings forward people who are energetic and extroverted and underestimates the modest and introverted people, even if they are talented."

Big Bang

In 1963, Jack Welch received another lesson in working with people. Chemical plant exploded, and although no one was hurt, the shaking young man had to drag himself onto the carpet to Charlie Reid, a higher-level executive, to give an explanation. Instead of scolding his subordinate, Reed focused on what was learned from the incident and asked him for advice on how to avoid future explosions. Welch left the office with renewed confidence and an even more committed GE.

When a job opening for PPO Sales Project Manager came up, Jack began pestering Gutoff to fill the position, despite his lack of experience in the field. He obviously had some talent as a salesman, because the appointment was received. Welch made a tradition of celebrating his team's success by throwing a party every time orders reached $5,000. Successful sales teams in 1968 led to Jack's appointment as general manager of the entire plastics division, the youngest at GE.

Jack Welch: The Manager's Story

Plastic was not held in high esteem by General Electric as the company struggled to break even after several years of capital-intensive research. Welch, young and confident, predicted that GE's plastics business would double to rival DuPont, the chemical giant. Jack and his team went on an unprecedented publicity stunt. It involved billboards, radio promotion, and even a public display of merchandise in a parking lot, with Major League pitcher Denny McLain throwing balls at Welch holding a sheet of industrial plastic as protection.

Jack achieved his goal of doubling the business within three years and thereby strengthened his management style. He was outspoken and even a little callous when dealing with incompetence, quickly firing anyone who didn't meet his standards, but he was also very generous with those who did. The employees he approved were expected to work hard, but also paid them very well. Based on the results achieved, in 1971 Jack Welch was promoted to head of the entire chemical and metallurgical division of the company.

Personnel decides everything

Jack Welch Focused on Hiring and Retaining the best people, only on a larger scale. The way he recruits and fires staff has attracted unfriendly attention from GE's top management. The company increasingly relied on seniority and a flawed performance appraisal system as criteria for promotion, but Welch challenged that system by promoting and hiring people on merit.

In 1973, he wrote in his report that one of his long-term goals was to become CEO companies. That same year, Welch was promoted to manager of several $2 billion divisions. Unable to delve deeply into every field from X-rays to semiconductors, he came to appreciate the people who run the business even more. From 1973 to 1980, he used this concept - personnel above all, each time occupying more and more responsible posts.

A dark horse

By 1977, it was clear that Welch's success in every position made him a dark horse in the race to become the company's CEO, Reginald H. Jones. As part of the test, all candidates were invited to the headquarters of the corporation and given large sections of it to manage. Jack got consumer goods and services. Part of this portfolio included a business that Welch immediately liked - credit. Later, as CEO, Jack would make GE's growth engine the credit division.

Decisive error

Competing for the top nomination, Welch made one notable mistake. Oddly enough, this later helped him succeed. He had proven his ability to get things done and make tough decisions about losing businesses, but he had concerns about his die-hard sense of competition. When the cost of acquiring the cable and broadcast divisions of Cox Communication began to rise with each negotiation, Welch canceled the deal.

He spent over a year convincing the GE board of the need for such an acquisition, and now he has to admit that he made a mistake. For some board members, the fact that Welch made a mistake and acted quickly to correct it was an argument in his favor. In 1980, with the consent of the board, Reginald Jones informed him that he would be the new chief executive.

Jack Welch - Winner

The journey from junior engineer to CEO took 20 years, a terrific pace to climb the corporate ladder with 29 levels of management. One of the first things Jack Welch, the winner, did as CEO was move to eliminate those levels to make way for people and ideas.

Throughout his career, simple principles such as "people are everything" and a constant drive to anticipate and exceed expectations have allowed Welch to stand out from the crowd. There is no doubt that Jack had tremendous self-confidence, but it was the effort he put into people and the trust that made him a great manager and helped him transform the company as a CEO.

Personal life

Welch's first wife Caroline bore him four children. In April 1987, the couple amicably divorced after 28 years of marriage. The second wife, Jane Beasley, was a former lawyer. The wedding took place in April 1989, and the divorce took place in 2003.

The third wife, Susie Wetlaufer, is the co-author of Jack Welch's Winning. At one time she worked as the editor of the Harvard Business Review. Jane Beasley, then still a wife, found out about the affair and informed the management of the magazine. In early 2002, Wetlaufer was forced to resign after admitting her relationship with Jack while preparing his interview.

Books

• In 2003 Jack: Straight from the Gut was published.
• The Winning book was published in 2005 and took first place on the Wall Street Journal bestseller list.
• It was followed in 2006 by Win: 74 the most difficult question in modern business.

In 2009, Welch founded the Institute of Management in his name, in the development curriculum which he personally attended.

In his twenty years as CEO of General Electric, Jack Welch has built the corporation's reputation as a world leader; in 1999, Fortune magazine named him "executive of the century".

He joined General Electric in 1960 as an intern. At thirty-three, he became the youngest director in the history of the company, and in 1981 - the CEO of the corporation. Over twenty years, he completely reorganized the work, introduced the concept of Six Sigma, achieved lofty goals and led a number of corporate acquisitions.

As a result, the profitability of the enterprise grew by 600%, the company's income increased from year to year, and General Electric developed a reputation as one of the most profitable corporations in the world.

One of the most famous managers and leaders of the 20th century, Jack Francis Welch Jr. was born on November 19, 1935 in Peabody, Massachusetts. He spent his childhood in Salem, where his father worked as a conductor for railway. The boy stuttered, but did not experience any complexes about this. Subsequently, he recalled: "A wise mother told me that it was my brain that was working too fast."

AT school years Jack Welch was passionate about sports. Classmates spoke of him as "the most talkative and noisy boy" of all they know. After graduating from high school, he went to study at the University of Massachusetts, where he studied chemistry.

Then there was the University of Illinois, where Welch got a degree in chemical engineering. From there he went to Pittsfield (Massachusetts) and started working at General Electric. There was a question about long-term plans in the application form that had to be filled out when applying for a job, and Jack Welch wrote that he wanted to become a CEO. In 1979, he was already vice chairman of the board and executive director of the corporation.

Welch's meteoric rise at General Electric might not have happened. In 1961, tired of fighting the clumsy bureaucratic system, he submitted his letter of resignation. Luckily for General Electric, his boss talked him into staying.

In 1963, Jack Welch took over the chemistry department. In 1968, when he was thirty-three years old, he became the youngest director of GE in the entire history of the company, and four years later he took the position of vice president of one of the corporation's divisions.

Pretty quickly, he turned the plastics business into a serious $2 billion business and set about building the financial arm of GE Capital. In 1980, he was named the new CEO and Chairman of the Board of the General Electric Corporation. At forty-five years of age, Welch became the youngest director of the company in history and the eighth CEO in the ninety-two years of the corporation.

The company was doing well at the time. Fortune magazine recognized General Electric as the company with the most efficient system management in the US, and Reg Jones, Jack Welch's predecessor, is the best CEO ever. However, the company's products were not in sufficient demand. In a global economic crisis the real threat was posed by Japanese manufacturers, who had new production systems type of lean manufacturing.

In the 1980s, realizing that without fundamental changes it was impossible to compete with global manufacturers, Welch announced that General Electric would come out on top, and therefore, it was necessary to get rid of seventy unprofitable divisions. The focus was on the service sector: the corporation opened 1,000 new businesses.

But that was only the beginning. Then Jack Welch delegated authority to individual divisions of the company, thus taking the first step towards decentralization. The complex hierarchy of management has sunk into oblivion. Preparing his subordinates to fight the bureaucracy, Welch urged: “Fight it. Hate her. Crush her."

Approximately 200,000 General Electric employees were laid off and the company saved more than $6 billion. The media dubbed Welch Neutron Jack. By the end of the 1980s, having proved that he could tear the company apart, Welch moved on to the second stage of his program - the modernization of the corporation in accordance with the requirements of the 21st century.

To unite employees, Jack Welch used corporate values ​​to guide their behavior (it is known that he carried a sheet with corporate values ​​on it). In the mid-1990s, there was a fight for quality, and Welch introduced the so-called Six Sigma concept, developed in 1985 by representatives of Motorola.

Six Sigma is a statistical term referring to products that are 99.9998% perfect. The concept is realized through rigorous measurements and checks to obtain results. Welch ensured that Six Sigma was implemented with 100% management support. As a result, in the period from 1995 to 1999, profitability increased by 3%.

How successful was the reign of Jack Welch, shows a number of indicators. For example, from 1981 to 1999, the share price of General Electric Corporation increased from $4 to $133 (including the fact that the company issued new shares four times). Since 1980, the average total return on General Electric stock has remained at 27%, and for a hundred consecutive quarters, the company's income from permanent operations has gradually increased.

Shares of General Electric, worth $10,000 in March 1981, were worth $640,000 after reinvestment in late 1999. During the same period, the corporation's sales rose from $27.2 million to $10.7 billion. Not surprisingly, in 1999, General Electric Corporation was the second most profitable company in the world.

The brilliant reputation of Jack Welch was spoiled by one single small speck in 2001. It was high time for him to enjoy a well-deserved rest, but he ventured into the "last stand" - a large-scale deal with Honeywell Bull, which he stole, as they say, from under the noses of potential buyers - United Technologies. Welch did his best, but at the final stage representatives of the legislature of the European Union intervened.

In a way, it was the unfortunate ending to a great career. But commenting on this turn of events, Jack Welch was not at all embarrassed: “GE was a great company before I got to it. And now it's a great company. And she would be even better if we got her. And as for regrets about the deed - there are none. Tomorrow I would do the same.”

He handed over the helm to his successor, Jeff Immelt, on September 7, 2001, and began promoting his autobiographical book, Jack: My Years at GE. A new life outside of GE began with a $7 million advance from publishers and extensive plans for the future, but public attitudes to him changed dramatically due to personal problems: in 2002, Welch openly declared a love affair with the editor of the Harvard Business Review. While he was engaged in a divorce, the plans of the “newlywed” pensioner were discussed in every way in the press.

Describing the end of the "Welch era" at General Electric, the media focused on the failed takeover of Honewell Bull and the changes in the personal life of the former head of the corporation. The actions of the legislators of the European Union overnight crossed out all the achievements of an outstanding manager.

However, the three stages of Welch's development - liquidation, creation and quality - completely changed General Electric, so that Jack Welch can rightly be called the exemplary CEO of his generation. It also has critics (it's inevitable) that point to corporate salaries, company pollution reports environment, a large number of layoffs and lack of loyalty to the organization.

But it's hard not to agree that Jack Welch made positive changes where they were really needed. He will go down in history as one of the most important corporate leaders of the 20th century.

This is a series of materials that will help you to develop leadership skills and become a true leader for those around you. Every day we will publish a new lesson for the future leader and accompany it with a story about an outstanding leader. Also at the end of each article you will find exercises that will help you develop your leadership skills!

Jack Welch is one of the greatest businessmen of the 20th century. For 20 years, from 1981 to 2001, Jack was chairman of the board and CEO of General Electric.

During the two decades of his reign, the total value of the corporation has increased 30 times - from 14 to almost 400 billion dollars. General Electric became the second most profitable company in the world. Welch's fortune is estimated at $720 million.

During his leadership of the company, Welch continuously worked to modernize the company and improve efficiency. He completely destroyed the bureaucratic system that irritated him, closed unprofitable factories and divisions, reduced wages, and even earned the nickname Neutron Jack because, like the neutron bomb, it got rid of people without damaging buildings.

Jack not only worked efficiently; All his life he developed as a person and specialist. Welch joined General Electrics at the age of 25 as an engineer and rose through the ranks to lead the company after 21 years. His career lacks the inertia of middle age. He continued to study, constantly adding more and more new knowledge to the already existing impressive baggage. Jack was constantly changing, not paying attention to social stereotypes.

In 1999, he was named "Manager of the Century" by Fortune magazine.

After leaving GE in 2001, Welch wrote an autobiography, JACK: Straight From The Gut, which became a bestseller. By the way, upon his dismissal on September 6, 2001, Welch received a record-breaking "golden parachute" of $417 million.

Jack Welch's 25 Lessons for Today's Business Leaders:

I. Be more of a leader and less of a manager

• Be a leader
• Manage Less
• Articulate your vision
• Simplify
• Be less formal
• Energize others
• See reality in the eye
• See change as an opportunity
• Search good ideas everywhere
• Finish what you started

II. Create a champion organization

• Destroy the bureaucracy
• Break the boundaries
• Put values ​​first
• Grow Leaders
• Create a culture focused on continuous learning

III. Unleash the potential of your people

• Get everyone involved
• Make everyone a team player
• Dare
• Give people confidence
• Turn work into pleasure

IV. Turn your company into a market leader

• Be No. 1 or No. 2
• Make quality a lifestyle
• Constantly innovate
• Get your speed back on track
• Infuse the spirit of a small company into your company

Qualities:

Jack Welch from childhood was distinguished by great perseverance, which only intensified with age. Smart, proactive, able to predict events well. He always focuses on strategic issues, understands "the main thing" in each question. He does not like to delve into the little things.

He knows how to captivate people with his personal example, many people consider the principles of his work to be the most ingenious and effective. He has great energy and charges others with it. Purposefulness, the ability to bring any matter to the end distinguish Jack Welch.

He is very confident in himself, knows how to take risks, make mistakes, learn from his mistakes. Jack Welch knows how to enjoy his work, loves simplicity in everything. He has a good sense of humor, he is kind, but fair and even sometimes a tough leader. Always demonstrates integrity, the ability to learn anytime and anywhere, He is friendly with everyone, but knows the boundaries in communicating with any person.

Jack Welch Rules of Life:

• "An overworked, overstressed leader is the best leader because he doesn't have time to get involved and bother people over trifles."
• Any change brings with it new opportunities. Therefore, the organization's response to change should not be waiting, but increasing activity.
• If you want to get what you never had, become what you never had.

Tasks-exercises for future leaders

1. Apply SWOT analysis to analyze your business or case. Evaluate 4 parameters - weak sides, strengths, opportunities and threats

Draw a square with 4 cells and enter there at least 5 points for each of the 4 indicators. Do an analysis.

Write next to each parameter at least 3 actions that improve the situation.

Also write next to each parameter at least 3 actions that you are ready to do in the near future, write down the deadlines.

These tasks are prepared by the coach, you can ask your questions in the comments.

, Writer

Jack Welch (1935) was born in Salem, Massachusetts.

He received his bachelor's degree from the University of Massachusetts and his master's and doctoral degrees in chemical technology— at the University of Illinois.

An overworked, overstressed leader is the best leader because he doesn't have time to get involved and bother people over trifles.

Welch Jack

After leaving GE in 2001, Mr. Welch wrote an autobiography that became a #1 New York Times and international bestseller: Jack: Straight From The Gut. Mr. Welch travels a lot, interacts with people working at different levels of the hierarchical structure of the company, answers many questions on completely different topics and areas. It was this that inspired him to write his second book, Winning.

Jack Welch currently leads Jack Welch, LLC, where he is an advisor to a small group of Fortune 500 directors and CEOs. In addition, Mr. Welch continues to speak to the business community and students.

There are far more mediocre people making money on the stock exchange than anywhere else on earth.

Welch Jack

The easy way was not for Jack Welch. There was no planned progress in his plans. He wanted to make himself known, and not just take a comfortable chair. GE was subjected to one or the other shake-up. And that was—don't forget—exactly what his predecessor, Reg Jones, set out to accomplish. “When President Reginald Jones and the GE board of directors elected Jack Welch, they deliberately unleashed a reformist preacher whose managerial perspective was very different from the analytical, administrative approach that GE was focusing on at the time,” wrote Al Vicere and Robert Fulmer in their book „Leadership by Design“. "Welch brought a new concept of purpose to the company that helped GE strike a balance between innovative creativity and adaptive management."

In the 1980s Welch brought a spirit of dynamism to GE and throughout corporate America. GE's business has been completely overhauled. Some projects were discarded, hundreds of new ones were in demand. In 1984, Fortune named Welch "America's toughest boss." GE workers had to meet Welch's stringent requirements. In effect, GE has been downsizing. Nearly 200,000 employees left the company. More than six billion dollars were saved.

At the time, Welch was nicknamed "Neutron Jack" by the media. He, like a neutron bomb, destroyed people, leaving buildings intact. No wonder he wasn't popular at GE or anywhere else in the world. corporate world. For a while, it seemed that Welch could be ranked with Al Dunlap as public enemy number one. GE had a dark feeling about what was happening. Welch coldly replied that it was just part of the job. Not the best, but necessary.

“I don't start with moral issues. I create them! he said to Richard Pascal with his typical persuasive sincerity. – To the manager who is trying to lead large organization his course, contrary to the wishes of his followers, is very difficult. I didn't have to do this before. I've always had the luxury of building a business and still being everyone's favorite. But it has become clear that we will have to change our positions and focus on the business that can survive on a global scale.”
Perhaps Welch was too cruel.

But it's undeniable that by the end of the eighties, GE had become a much more dynamic organization. There was not the slightest complacency left - the company was ready for change. In retrospect, perhaps Welch's decision to become like a neutron bomb was the greatest decision in the company's history. Dramatic, but relatively quick changes turned out to be better than slow and systematic ones. "Beware of planning - take the leap" - that's Welch's advice. No half measures. Is this the same approach that Tom Peters extolled, as usual, full of enthusiasm: “Will Welch do it? I bet yes. Whether he cuts ties (Neutron Jack of the early 80s) or professes devolution (Work-Out of the early 90s)... this guy doesn't accept half measures. Meet Jack Welch: Honorary Member of the Crazy Club. Hooray!"

After proving that he was able to solve the company's problems on his own, Welch moved on to the second stage: rebuilding the company for the 21st century. He took enough care of the hardware. It's time to think about software.

The central link was the concept of WorkOut - "Warm-up", launched in 1989. It is believed that it appeared after a random question from Professor Kirby Warren from Columbia University. Warren asked Welch, "Now that you've kicked so many people out of the company, aren't you going to figure out what to do next?" At that time, 100,000 people left GE. Welch liked the idea. And soon it became a reality. Welch invited about twenty professors and consultants in order to implement the new concept. Welch called Work-Out "an ongoing, ongoing search by the entire company for the best way to do what has been done before."

Work-Out has become a communication tool that has provided GE employees with an amazing opportunity to change the way they work. “The idea was to have a three-day informal meeting with 40-100 GE employees in a wide range of roles. The boss started with a review of the state of the business and the announcement of the agenda, then he left. Employees were divided into groups and, under the guidance of a facilitator, looked for solutions to individual problems, explains Janet Loewy in Jack Welch Speaks. “Eventually the boss came back to listen to the proposed solutions. The boss had only three options: to accept the idea immediately; reject it immediately; request more information. If the boss chose the third, he had to name the team and set a deadline for a decision.”

The training went remarkably well. It helped start the process of building trust between GE employees and management. It gave employees the opportunity to voice their concerns at work and then make a real difference. It destroyed the barriers. Devastating storms are a thing of the past. Creativity was in the air.

Welch the Destroyer has become Welch the Power Divider. Learning has become part of GE's transformation into an open organization. The walls between the departments were shaken, the boundaries of authority shifted. In the 1980s, the layer of middle management was destroyed. Welch made it possible for GE employees to talk to each other, work together, and share information and experiences. Surprised at first by the new approach, they soon appreciated the opportunity.

“In the early nineties, after we finally defined ourselves as people with an unlimited thirst for knowledge and a duty to share, it became impossible for all of us to even tolerate - let alone hire - tyrants, despots and dictators. They just faded into yesterday,” noted the 1997 GE Annual Report.

The next stage of Welch's revolutionary changes was the introduction of a large-scale program to improve the quality of work. It began at the end of 1995 and was named six sigma. “Six Sigma spread at an uncanny pace throughout the company and influenced everything we did,” the company said in a report two years later.

Basically, Six Sigma insisted on personal responsibility for quality. staying production program, it concerned every person in the organization. “We are against the old quality control system because it does not take into account the human factor. Now it is the job of the manager, the leader, each employee, quality is everyone’s business,” Welch said.

Three stages of development - destruction, creation and quality control - transformed GE. The giant company remained highly profitable, but at the same time became more economical and dynamic. The numbers were telling.

American chemical engineer, businessman and writer He was chairman and CEO of General Electric from 1981 to 2001. Welch's fortune is estimated at 720 million US dollars.

Jack Welch was born November 19, 1935 in Salem, Massachusetts (Salem, Massachusetts), the son of railroad conductor John Welch (John Welch) and his wife Grace (Grace Welch), a housewife. Jack attended Salem High School and graduated from the University of Massachusetts Amherst in 1957 with a bachelor's degree in chemistry. At university, he became a member of the student fraternity "Phi Sigma Kappa fraternity". After receiving a master's degree, in 1960 he defended his doctoral dissertation at the University of Illinois (the University of Illinois) in Urbana-Champaign (Urbana-Champaign).

In the same year, Welch became an employee of General Electric. He worked as a junior chemical engineer in Pittsfield, Massachusetts (Pittsfield, Massachusetts), with salary 10.5 thousand dollars a year. After his first year on the job, he received a $1,000-a-year promotion, and was dissatisfied with the modest promotion and bureaucracy that reigned in the company. Welch was about to move on to another job at International Minerals & Chemicals in Skokie, Illinois, but Reuben Gutoff, a young executive two notches up in the local career ladder than Jack himself, decided that it would be a crime to let such a valuable employee go to competitors. He invited Jack and his first wife Carolyn (Carolyn Welch) to dinner and spent four hours persuading the engineer to stay. Gutoff promised to change the status quo and create a friendlier environment for small companies. As he himself admitted later, it was one of his best marketing solutions in life. Twelve years later, Welch, already a vice president of General Electric, wrote in his annual review that his goal was to be the company's CEO. In 1977 he became senior vice president and vice chairman in 1979. Two years later, 46-year-old John Francis Welch became the youngest chairman and CEO in GE history, inheriting the post from Reginald H. Jones. During the year of his activity, Welch replaced most of the company's management team with younger and more energetic managers.

During the 20 years that Welch led General Electric, he continuously worked to modernize the company and increase efficiency. He completely destroyed the bureaucratic system that irritated him so much in his youth, closed factories, reduced wages (and after that increased bonuses and distributed shares not only among management, but also among ordinary employees), reduced obsolete divisions, and even earned the nickname Neutron Jack, because, like a neutron bomb, it got rid of people without damaging buildings. Welch believed that the company should be number one or number two in a certain industry, or switch to something else. Many American business leaders followed suit. If in 1980, the year before he took over the company, its turnover was 26.8 billion dollars a year, then in 2000, the year before Welch left his post, this figure came close to 130 billion . In 1999, he was named "Manager of the Century" by Fortune magazine.

Currently, Jack Welch is married for the third time, he raised four children in his first marriage, which lasted 28 years, after which he and his wife divorced by mutual consent. The second wife, lawyer Jane Beasley, according to the marriage contract, received an amount estimated at $ 180 million during the divorce. For the third time, Suzy Wetlaufer, commentator, journalist and co-author of Jack's bestselling books, has become the chosen one of one of the most effective managers of the last century.

He has been teaching at the MIT Sloan School of Management since September 2006 and remains an avid golfer despite a back injury.