"JACK WELCH, a STRIKING EXAMPLE OF LEADERSHIP VIRTUES"
FROM THE FILES OF JACK WELCH -
“The mindset of yesterday’s manager—accepting compromise, keeping things tidy—bred complacency. Tomorrow’s leaders must raise issues, debate them, and resolve them. They must rally around a vision of what a business can become”.
Is there a secret formula for succeeding in business? Probably not. But it makes sense to study a master—the man widely regarded as the ablest business leader of the modern era. And that person is Jack Welch, the recently retired CEO and chairman of General Electric.
“Perhaps the most admired CEO of his generation,” Fortune magazine said of Welch in its May 1, 2000, edition.
How did Welch earn this kind of praise?
When he took over at General Electric in 1981, the company had sales of “only” $25 billion. In 1999, GE’s sales reached nearly $112 billion. Its profits in 1981 were $1.5 billion; Welch grew the bottom line to nearly $11 billion in 1999.
Welch wasn’t just “doing something right.” To hit those kinds of numbers, he did many things right. He had great ideas, and he implemented them. Yes, Welch led a huge enterprise with 340,000 employees, but we believe that his ideas can be put to work in organizations of all sizes.
Of all of Jack Welch’s ideas, none carries more weight than this:
Change, before it’s too late!
Change is easy, right? The boss makes a decision, and employees implement it—right?
If you’re in business, you know that change almost never works like that. In fact, it can be the most difficult thing in the world. Welch understood this fact, and yet he pushed for change almost from the minute he took over at GE in the spring of 1981.
CHANGE WAS EVERYWHERE
Change was rampant in the early 1980s. Inflation was raging, and global competitors were capturing unprecedented market shares. Welch understood the challenges his company faced: It was a reminder that we’d better get a lot better, faster.
So I guess my message in our company was, “The game is going to change, and change drastically.” And we had to get a plan, a program together, to deal with a decade that was totally different.
What did this mean for GE?
New products, a different business environment every day, and a company within which every employee had to embrace change.
MAKE EACH DAY YOUR FIRST DAY ON THE JOB
Welch loved to tell GE executives to start their day as if it were their first day on the job. In other words, always think fresh thoughts. Make it a habit to think about your business. Don’t rest on your laurels.
Make whatever changes are necessary to improve things. Reexamine your agenda, and rewrite what needs to be rewritten. To many both inside and outside the company, it appeared that Welch could have left well enough alone. After all, GE was a model corporation, right?
Welch knew better:
I could see a lot of [GE] businesses becoming . . . lethargic. American business was inwardly focused on the bureaucracy. [That bureaucracy] was right for its time, but the times were changing rapidly. Change was occurring at a much faster pace than business was reacting to it.
WELCH RULES
➤ Accept change.
Business leaders who treat change like the enemy will fail at their jobs. Change is the one constant, and successful business leaders must be able to read the ever-changing business environment.
➤ Let your employees know that change never ends.
Teach your colleagues to see change as an opportunity— a challenge that can be met through hard work and smarts.
➤ Be ready to rewrite your agenda.
Welch always encouraged his managers and employees to be prepared to reexamine their agenda and to make changes when necessary.
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