IntroductionGeneral Electric or GE for short is one of the most successful and most admired companies in the world. It is primarily a manufacturing conglomerate with a multinational presence and markets in many countries of the world. Jack Welch became CEO of the organization when it was doing very well. There are several organizations that would be similar to GE at some point in time. They would seemingly be rock solid and would be making profits in literally every product segment. Yet, the CEO would see so many areas for improvement and would initiate drastic action.
Such action would galvanize the organization and get it going in totally different directions. The organization would become agile and would be concentrating on very few core areas. The entire organization would have become a totally different organization. This is exactly what Jack Welch did to GE. There are so many articles on what he did. However, one small and concise book that can make a big difference to any BBA/MBA student from the University MBA colleges in the book, "The Welch Way" a superb compilation by Jeffrey A. Krames, and published by the Tata McGraw-Hill. I have with me a tenth reprint, dating back to 2003. However, the ideas mentioned therein are valued for all times to come. Hence, it is worth a buy (the latest reprints can be purchased directly from the publisher).
It is pertinent to note that Jack was the tallest leader of his time. He was very much successful in the revamp of GE and hence what Jack says is always taken seriously. In this article, we will discuss only a few lessons out of the 24 listed in this handbook. These are, a) Jack's emphasis on Values b) Defy tradition c) Set stretch goals d) Get good ideas from everywhere and e) Spark others to perform.
Jack's emphasis on Values Only three points are listed in this book. These are: don't harp on the numbers, lead by example, and let values rule. It was well known that even while chasing the numbers, Jack Welch made it very clear that anyone who does not lead by sticking to the core values of absolutely sharp honesty and integrity, will be shown the door, howsoever powerful he or she ever was. Leading by example is a common-sense value. Those who lead by walking the talk and are absolutely honest in their behaviour, attitudes, and work are always respected by all. Ratan Tata is a living legend. And when values are allowed to rule, everything else will follow. This is exactly what the Mahindra&Mahindra group, Infosys, Tatas, and the TVS groups, among several others in India, follow as a routine. There is no compromise on honesty and integrity in these companies.
Defy traditionJack famously declared "Control your destiny, or someone else will". Welch eliminated inefficiencies and sold off many businesses. He did fire tens of thousands of workers. All BBA/MBA students should understand that this has also happened in so many organizations around the world. When But he did all this with a purpose. He made GE a viable and most competitive organization through the boldest of initiatives. No doubt, some of these made his unpopular, but Jack stuck to his goal and went against all tradition of GE and still got done what most others he could not do. The most important lesson for all BBA/MBA students of Universities is that this has happened everywhere. It has happened in India as well -- L&T sold its highly profitable business to the Aditya Birla group to concentrate on its core engineering strengths. The rest, as they say, is history.
Set stretch goalsIn any Corporate organization, anywhere in the world, there will always be a stage when complacency sets in; there will be an "everything is fine" feeling that permeates the organization. However, when one looks at the operational side, with a big focus on the manufacturing processes, it can be easily noticed that there is tremendous scope for improvement. In this respect, it has been reported that Jack institutionalized the practice of Six Sigma, a quality assurance technique, that contributes towards the overall practice of Total Quality Management. This was also a way of life at Toyota, another famous organization. The key points mentioned in the book, under this heading of "set stretch goals" are: reach for the unreachable, forget decimal points, and don't punish yourself-- or anyone else -- for falling short of a stretch goal. "The whole point of a stretch is to ask how good you can be? Punishing for falling short of a stretch goal runs counter to the Welch way. He said that if the company aimed for 15 and made 12, they would celebrate." ( page 34). It should be noted that such stretch goals are a way of life at L&T, BHEL, Asian Paints, the entire Aditya Birla group, ICICI Bank, HDFC Bank, and the entire TVS group. If there is any scope for getting any inside information about the practice of stretch goals from any Management conference, the BBA/MBA students should immediately grab such opportunities and learn from such published knowledge made available in the public domain.
Get good ideas from everywhereThe three important points mentioned in this book are: don't think that you or your company have all the answers, study competitors, and make sure everyone around you knows that you are interested in all ideas, regardless of where they come from,
Let us take the first example. GE has always been a learning organization. So has been Google, Apple Computers, Intel, and so on; nearer home, I have first-hand knowledge of how L&T documents learning from any small success in operations and spread it all around. At DCW, a leading manufacturer of heavy chemicals, the entire focus was on reducing the cost of power. This became a way of life and the organization saved crores of rupees at its manufacturing plant near Tuticorin.
As regards the second point, a highly nimble-footed organization like Cavinkare does a lot of ground research to actually understand the needs of customers. When they studied the competition, they realized that the entire South Indian market was centred around the use of what is called Shikakkai, a mixture of some natural herbs, and this is an ancient practice. If there was a shampoo that youngsters could buy easily and use, the shampoo would be an instant hit.
Thus was born, the "Meera" herbal shampoo powder. In no time, it has firmly perched itself as a formidable competitor to the likes of Godrej that has a good brand of shampoo, but one that is based on chemicals. Meera has been able to settle as a big brand, in an "either-or" market and is a big hit with millions of housewives who are wedded to this brand. BBA/MBA students of different Universities should collect data on such published case-studies and learn continuously from them. Learning from competitors is a way of life in every corporate organization. It is so essential to have inside information on such practices, as a student, to enhance contextual learning.
Spark others to performMotivation of employees is key to success. This has been proved in hundreds of organizations around the world. The three points mentioned in the book are:- never bully or intimidate, make sure to use all the intellect and make sure everyone knows that the best idea wins. Let us take the first point. The worst managers are those who literally bark at their subordinates. They may be regarded as terrors, but they can never be respected by any subordinate. In fact, they are always hated, though employees will not openly admit it.
The key to maximum performance is positive motivation, and a small pat on the back is all that is needed in any situation. Every single employee longs for recognition and appreciation and those who are always successful are those who have perfected the art of doing these things on a systematic basis. It is always essential to learn from successful managers. It is always possible to change negative behaviours.
Motivation is the spark that can ignite and consistently increase the performance of an organization. At ITC for example, young managers are encouraged to come up with creative ideas. The top management reacts quickly to such ideas and rewards the young managers. Workmen have total control of operations in many TVS group companies. They are at liberty to implement continuous improvement at the workplace and just need to record such improvements and inform their immediate supervisors. There is maximum empowerment at every level. All BBA/MBA students should understand the nitty-gritty of such practices.
ConclusionThere have been hundreds of articles written on GE and such great companies. One continuously needs to update his knowledge. For the BBA/MBA students learning from great leaders like Jack Welch is as important as learning any concept. Only some ideas from the book under reference, with many appropriate Indian examples, have been discussed above. It is a continuous process of learning and each BBA/MBA student has to compulosorily gear up to the learning challenges.