Jack Welch did not stand at the origins of General Electric - the company was already 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 claimed that GE was too large for its shares to grow, and investing in it only makes sense for dividends, Welch has increased its value 40 times over two decades of leadership.
Stutter boy
Jack Welch was born on November 19, 1935 in Peabody, Massachusetts. His parents, father John Francis Welch and mother Grace, tried to instill in his son a sense of self-confidence that was useful to him throughout his career.
As a child, Jack stuttered a little, but this did not prevent him from excellence in school and sports. In 1957, he received a degree in chemical engineering and in 1960 defended his doctoral dissertation, after which he began working at General Electric as a junior engineer.
Always give more than they ask
Jack Welch, whose biography at GE began with the development of a new plastic for industrial use, polyphenylene oxide (PPO), worked with a small development team. Due to GE’s extensive structure, he ultimately had to “sell” his project to senior researchers in order to get their help.
Welch has established a good relationship with Ruben Gutoff, CEO of GE, always doing more than he was asked. When a project manager needed to analyze a project, Jack provided it along with cost analysis for similar products from competing companies like DuPont. This was part of his strategy to stand out from the crowd, exceeding expectations and offering a new and, possibly, valuable, perspective to his superiors.
Aborted dismissal
When the bureaucratic nature of a large corporation, such as GE, began to annoy Welch, in particular the equal allowances to all employees in his first year, he tried to quit. However, Gutoff convinced him to stay, offering him a big increase in salary and promising managerial positions in the future. So Rudolph agreed to help Jack get around some of the bureaucratic procedures that filled GE. The special attitude he received from the Executive Director strengthened his confidence in the subsequently adopted differentiation policy. Jack Welch, whose quotes are very popular, said on this occasion: "Differentiation puts forward energetic and extrovert people and underestimates humble and introverts, even if they are talented."
Big Bang
In 1963, Jack Welch received another lesson on working with people. The chemical plant exploded, and although no one was hurt, the shaking young man had to drag himself on the carpet to Charlie Reid, the top manager for an explanation. Instead of scribbling a subordinate, Reid focused on what conclusions were drawn from the incident and asked him for advice on how to avoid future explosions. Welch left the office with renewed self-confidence and even more dedicated GE.
When the vacancy of the manager of the PPO product sales project opened, Jack began to pester Gutoff with requests to take this place, despite the lack of experience in this area. He obviously had some salesman talent because the assignment was received. Welch made it a tradition to celebrate the success of his team by organizing a party every time the amount of orders reached $ 5,000. Successful sales of the team in 1968 led to the appointment of Jack as general manager of the entire plastics division, the youngest at GE.
Jack Welch: Manager Story
Plastic was not held in high esteem by General Electric, as the company tried to break even after several years of capital-intensive research. Welch, young and self-confident, predicted that GE's plastics business would double and compete with DuPont, the chemical giant. Jack and his team embarked on an unprecedented publicity move. It involved billboards, promotions on the radio, and even a public display of goods in the parking lot when Major League pitcher Denny MacLane threw balls at Welch, who was holding a sheet of industrial plastic as a defense.
Jack achieved his goal of doubling the business within three years and thereby strengthened his management style. He was frank and even a little callous when dealing with incompetence, quickly firing everyone who did not meet his requirements, but he was also very generous with those who met them. It was expected that employees approved by him should have worked hard, but also paid them very well. Based on the results achieved in 1971, Jack Welch was promoted to the management of the entire chemical and metallurgical department of the company.
Cadres decide everything
Jack Welch focused on hiring and retaining the best people, only on a larger scale. The way he recruits and fires has attracted unfriendly attention from GE senior management. The company increasingly relied on seniority and a vicious system for evaluating personnel as criteria for career advancement, but Welch, promoting and hiring people according to their merits, challenged this system.
In a 1973 report, he wrote that one of his long-term goals was to become the CEO of the company. In the same year, Welch was promoted to the level of managing several divisions with a total value of $ 2 billion. Unable to delve deeply into every direction from x-rays to semiconductors, he began to appreciate the people running the business even more. From 1973 to 1980, he used this concept - cadres above all, each time occupying more and more responsible posts.
A dark horse
By 1977, it became clear that Welch’s success in every position made him a dark horse in the race for the position of company CEO Reginald H. Jones. As part of the test, all candidates were invited to the headquarters of the corporation and received large sections of it for management. Jack got consumer goods and services. Part of this portfolio included a business that Welch immediately liked — credit. Later, as CEO, Jack will make the lending division a growth engine for General Electric.
Decisive mistake
Competing for the top appointment, Welch made one notable mistake. Oddly enough, later this helped him succeed. He proved his ability to achieve results and make tough decisions in relation to a loss-making business, but caused concern about his stubborn sense of competition. As the cost of acquiring Cox Communication’s cable and broadcasters began to rise with every negotiation, Welch canceled the deal.
He spent more than a year trying to convince the GE board of the need for such an acquisition and was now forced to admit that he had made a mistake. For some board members, the fact that Welch made a mistake and acted quickly to fix it became an argument in his favor. In 1980, with the consent of the board, Reginald Jones informed him that he would be the new CEO.
Jack Welch is the winner
The journey from a junior engineer to a CEO took 20 years, the tremendous pace of climbing stairs in a corporation with 29 levels of management. One of the first things that Jack Welch, the winner as the company’s leader, did was take steps to cancel these levels to make way for people and ideas.
Throughout his career, such simple principles as “cadres decide everything,” and his constant desire to anticipate and exceed expectations have allowed Welch to break out of the crowd. There is no doubt that Jack had great confidence in his abilities, but only the efforts he put into people and his trust made him a great manager and helped him transform the company as a CEO.
Personal life
Welch's first wife, Carolina, gave birth to four children. In April 1987, the couple divorced in a friendly manner after 28 years of marriage. The second wife, Jane Beasley, was a former acquisitions and merger lawyer . The wedding took place in April 1989, and the divorce in 2003.
The third wife, Suzy Wetlaufer, is a co-author of Jack Welch's book “Winning.” At one time, she worked as Harvard Business Review editor. Jane Beasley, at that time still a wife, found out about the novel and informed the magazine management. In early 2002, Wetlaufer was forced to quit, recognizing a connection with Jack during the preparation of his interview.
Books
- In 2003, Jack: Straight from the Gut.
- Winning's book was released in 2005 and took first place on the Wall Street Journal's bestseller list.
- In 2006, it was followed by "Win: 74 of the most complex issues in modern business."
In 2009, Welch founded the Institute for Management of his own name, in the development of the curriculum of which he personally participated.