)ACK WELCH - THE MAN AND HIS PRINCIPLES:

1 Stop manag|ng start |ead|ng and cu|t|vate managers

Pe dlsllked Lhe noLlon of managemenL MosL managers ln hls vlew were over managed 1hose who
over managed helped Lo creaLe a bureaucraLlc envlronmenL whlch accordlng Lo Welch kllls large
companles 1he only way Lo lasL aL CL was Lo geL on board Lo become a lean leader Lo adapL
oneself Lo Lhe company's culLure and value

2 e s|mp|e be cons|stent and hammer your message home
ack Welch always belleved ln belng slmple relenLless conslsLency and follow up on everyLhlng
Welch's conslsLency has lndeed helped Lo revlve Ceneral LlecLrlc and remake lL lnLo one of Lhe mosL
compeLlLlve companles

3 e No1 or No2 but don't narrow your market
ack Welch was convlnced LhaL lnflaLlon would become Lhe mosL promlnenL enemy ln 1980's leadlng
Lo slower worldwlde growLh 1herefore he always lnslsLed upon belng Lhe no1 or no2 leanesL
lowesLcosL worldwlde producers of quallLy goods and servlces or havlng a Lechnologlcal edge
Pe always belleved ln Lhe surprlse move le Lhe bold play Pe was confldenL LhaL Ceneral LlecLrlc
would prosper lf he acqulres and dlvesLs companles and remalned focused

|x c|ose or se||
ln Lhe early 90's n8C 1elecommunlcaLlon Company whlch was acqulred by Ceneral LlecLrlc ln Lhe
80's was faclng dlfflculLles Lo compeLe wlLh Lhe oLher uS compeLlLors Welch declded Lo flx n8C
wlLh a serles of qulck and clever declslons ack Welch and Lhe Lhen resldenL of n8C Mr 8ob
WrlghL declded Lo replace currenL managers wlLh more buslnessmlnded enLrepreneur leaders
Cnce Lhls was ln place boLh were confldenL LhaL n8C could lndeed be flxed"

S on't focus on the numbers
n organlzaLlon's ablllLy Lo learn and LranslaLe LhaL learnlng lnLo acLlon rapldly ls Lhe ulLlmaLe
compeLlLlve advanLage"
ack Welch's phllosophy was LhaL numbers aren'L Lhe vlslon numbers are Lhe producL and he never
used Lo Lalk abouL numbers 1he Lhree measuremenLs he belleved Lo llve by would be employee
saLlsfacLlon cusLomer saLlsfacLlon and cash flow

6 Shar|ng |deas across bus|ness
ack Welch sald LhaL CL's core compeLency was sharlng ldeas across buslnesses across Lhe
boundaryless organlzaLlon" 1he company vlewed lLself as a laboraLory LhaL shared ldeas flnanclal
resources and managers lso he belleved LhaL an ldea could be from any source So he searched
Lhe globe for ldeas and Lhen he would share whaL we know from oLhers Lo geL whaL Lhey know"


7 et r|d of the managers get r|d of the bureaucracy
lsmayed by Lhe LlmewasLlng of bureaucracy and hlerarchy ack Welch nearly lefL CL afLer hls flrsL
year Pe was Lalked around buL Lhe bugbear remalned fLer Laklng over aL Lhe Lop Welch
eradlcaLed bureaucracy wlLh a vengeance
ccordlng Lo hlm SLrong managers who make Lough declslons Lo cuL [obs provlde Lhe only Lrue [ob
securlLy ln Loday's world Weak managers are Lhe problem Weak managers desLroy [obs"

e |ean and ag||e ||ke a sma|| company
ack Welch belleved LhaL Lo survlve ln an lncreaslngly compeLlLlve envlronmenL large companles llke
CL musL sLop behavlng and Lhlnklng llke large companles 1hey should geL lean aglle and sLarL
Lhlnklng llke a small company 1he new arrangemenL under Welch proved very clean slmple and
effecLlve also people ln Lhe organlsaLlon could communlcaLe well 1hey moved fasL as Lhey knew
Lhe penalLles for heslLaLlon ln Lhe markeL place CL became a leaner and flLLer organlsaLlon


Key Issues:

O ,ak|ng emp|oyees fee| va|ued and emp|oyees become an |ntegra| part of the bus|ness
through structured |dea gather|ng and |mp|ementat|on
ack Welch hlmself almosL permanenLly lefL a solld [ob aL CL years ago because he felL
underappreclaLed and LreaLed llke a clvll servanL" Pe wanLed Lo develop a LrusL among employees and
felL LhaL developlng a work envlronmenL where employees could speak frankly wlLhouL reLrlbuLlon
would allow Lhe company Lo beneflL from Lhe employees' knowledge and ldeas" 1hrough WorkouL
sesslons ln whlch every employee aL all levels of Lhe organlzaLlon was lnvlLed Lo parLlclpaLe he creaLed a
boundary less" company LhaL engendered honesLy parLlclpaLlon and openness Lmployees were able
Lo ldenLlfy problems ln Lhelr unlLs or Lhe buslness and presenL ldeas and recommendaLlons Welch
broke Lhrough Lhe Lopdown" approach Lo managemenL and recognlzed LhaL some of Lhe besL ldeas
come from Lhose closesL Lo Lhe work lLself
O ommun|cat|ng the corporate goa|s and cu|ture w|th ex|st|ng emp|oyees and new|y acqu|red
bus|nesses
Welch bullL a buslness phllosophy LhaL had Lo be communlcaLed Pe would ofLen vlslL CL offlce around
Lhe world raLher Lhan send vldeoLaped presenLaLlons Pe spenL Llme crafLlng leLLers Lo shareholders LhaL
CL personnel read abouL hls concepLs of number 1 number 2" boundarylessness" speed slmpllclLy
and selfconfldence" and unleashlng Lhe bralns and energy of employees" MalnLalnlng CL's values
was lmporLanL Lo Welch and he expecLed all employees Lo adhere Lo Lhem
O eve|op|ng process |mprovement and |nnovat|on to cont|nue to thr|ve
ln Lhe example of CL's acqulslLlon of nuovo lgnone (n) careful sLeps were Laken Lo Lraln and
communlcaLe sLraLeglcally wlLh n's employees 1hese lmporLanL consLlLuenLs were comlng from a
buslness culLure LhaL was Lhe anLlLhesls of CL poor communlcaLlon bad managemenL and no
measuremenLs ln place CL was always looklng for ways Lo be beLLer and lmprove lLs processes and
process mapplng and besL pracLlces encouraged Lhls unllke some companles LhaL only Look Lhe
oplnlons of Lhe hlgher ranklng execuLlves CL Look Lhe approach of lnvolvlng lLs employees Lo develop
ways Lo lmprove processes and cuL down on manufacLurlng Llme

Potential Resolution:

Welch carrled hls core values and prlnclples Lo Lhe forefronL ln hls leadershlp aL CL Pe dld noL beaL
around Lhe bush wlLh hls expecLaLlons and LargeLs Pe was focused on performance and when he was
handlng ouL rewards lL came wlLh a dlscusslon of hls expecLaLlons bove all however Welch sklllfully
uses rewards Lo drlve behavlor" Many execuLlves had qulLe a blL of freedom aL CL 8uL Lhe leash geLs
pulled very LlghLly when a unlL ls underperformlng" Pls message WhaL counLs ls whaL you dellver" ls
one LhaL he has repeaLed ln words and acLlons LhroughouL hls Lenure aL CL
Welch undersLood LhaL bulldlng a coherenL communlcaLlons sLraLegy LhroughouL Lhe organlzaLlon along
wlLh seLLlng clear and speclflc expecLaLlons was of Lhe uLmosL lmporLance Pe dld Lhls by belng dlrecL
repeaLlng agaln and agaln whaL was lmporLanL and he communlcaLed Lo employees LhaL Lhey were CL
1o accompllsh Lhls communlcaLlon Welch lmplemenLed programs across Lhe enLlre organlzaLlon LhaL
lncluded lnvolvemenL from all levels of Lhe buslness 1hese programs were communlcaLed Lhrough
Lralnlng and clear communlcaLlon of expecLaLlons Lmployees were ln charge of maklng Lhlngs beLLer
and lmprovlng processes 1hey were valued for Lhe experLlse Lhey learned from dolng Lhelr [obs 8y
clearly communlcaLlng expecLaLlons and expecLlng employees Lo be lnvolved helped boosL Lhelr self
confldence and Lhe buslness' boLLom llne
lLhough resulLs were whaL maLLered resulLs were achleved Lhrough process examlnaLlon and
lmprovemenL s Welch had predlcLed Lhls lnnovaLlve approach helped CL become Lhe mosL
compeLlLlve company on earLh