This presentation is based on a Case Study: 'Jack Welch and Jeffrey Immelt: Continuity and Change in Strategy, Style and Culture at GE (General Electric)' The presentation also consists of ingenious OB (Organizational Behavior) Analysis. Leadership style, Management Style, of these two great CEOs has been discussed in the slides.

1. It’s not just a Case
It’s not just a Presentation
It’s A Story
It’s his Story
It’s HISTORY

2. “I’m a different
generation from
Jack… I have a
different view of
the world.”
“The thing that
makes me most
proud of Jeff is his
visibility in tough
time.”

3. AGENDA
1. GE Introduction and Timeline.
2. Introduction of Jack Welch.
3. Introduction of Jeffrey Immelt.
4. GE under Welch (Actions, Events, and Leadership).
5. GE under Immelt (Actions, Events, and Leadership).
6. OB Analysis.

4. 1890
Thomas Alva
Edison
• He started Edison
General Electric
Company (EGEC).
1894
Charles Coffin
1922
Gerard Swope
• He established an
Unemployment
Pension Plan.
1940
Charles Wilson
1958
Ralph Cordiner
• He set up GE’s 1st
management
training centre.
1964
Fred Borch
• Aggressive Leader
and he added 3
new capital lines –
computers,
nuclear power
and aircraft
engines.
1972
Reginald Jones
• He accelerated
GE’s shift from
electromechanical
to electronic
technology.

5. Jack Welch
CEO, GE; 1981-2001

6. He is a son of a railway conductor and was born on 19th November,
1935 at Salem, Massachusetts.
He studied Chemical Engineering at University of Massachusetts,
from where he graduated in 1957.He further did his Masters and
Ph. D in Chemical Engineering from University of Illinois.
He joined GE in 1960 as a Junior Engineer at a salary of $10,500 per
annum.
Disappointed with a raise of $1000 he was about to resign when
his Reuben Gutoff, his immediate senior, took him out for dinner
and spent four hours trying to convince him to stay at GE and he
apparently stayed.
He was General Manager of GE’s new plastics factory when he
developed a new type of plastic called Noryl. A little later he was
made the head of GE’s entire plastics division.
In 1972, he became Vice-President. In 1977, he was made senior
Vice-President and two years later, Vice-Chairman. In 1981, he
became the youngest CEO in GE’s history.

7. Jeffrey Immelt
CEO, GE; 2001-Present

8. He was born in 1956 in Cincinnati, Ohio. His
father was an employee of GE’s Aircraft
Engines Division.
He majored in mathematics from Dartmouth
College in the late 1970s, after which he
joined Procter & Gamble Co. as a member
of its brand management team.
He enrolled for an MBA from Harvard. After
finishing the course, he joined GE as a
marketing executive in 1982 at the
company’s headquarters in Fairfield,
Connecticut.
After 6 months, he was transferred to GE
Plastics, where he continued till the late
1990s, in various marketing positions.
In November 2000, the board of GE chose
Immelt as the CEO of the company.

9. Under
Jack Welch

10. Transform Bureaucratic
Culture
Welch created a flatter structure by
trimming company’s 9 management
levels to 6.
The objective was to make GE more
nimble and improve communication.

11. Replaced the matrix based Corporate
Planning System with “Number One,
Number Two” strategy.
If any business failed to meet this criterion
he closed it down or sold it, which resulted
in thousands of employees losing their jobs.
“Neutron Jack”
Corporate Planning
System
“Fix it, Sell it or Close it.”

12. Master of Large Business
Deals
Welch acquired Radio Corporation of
America(RCA) for $6.28 billion in
December 1985. It was the biggest merger
ever in the non-oil sector.
He also acquired National Broadcasting
Corporation(NBC).
By the time Welch retired in 2001, GE
acquired more than 600 companies.

13. Strategic Planning
Welch made strategic planning a line
function and vested responsibility to
individual business units.
He also cut down company’s
spending on Research and
Development.

14. Welch launched the “Work Out”
program.
Involvement of employees at all
organizational levels for
innovation and problem solving
through:
- Suggestions for improvement.
- Reviewing company policies.
- Criticize the superiors.
Promote Innovation

15. “ We want to make our quality so
special, so valuable to our customers,
so important to their success, that our
products become their only real value
choice.”
“ The idea flow from the human spirit
is absolutely unlimited. All you have
to do is tap into the well. I don’t like
to use the word efficiency. It’s
creativity. It’s a belief that every
person counts.”

16. Six Sigma
Program
It is a quality initiative developed by Motorola Inc. in 1986, which aims to reduce
production defects to less than 3.4 per million through continuous improvements.
Welch borrowed the idea from his friend Lawrence Bossidy who was the CEO of Allied
Signal Inc. It was adopted by GE in 1995 and was applied to 200 projects in its first
year.
Employees at GE were trained in Six Sigma at three levels:
• Green Belt - They implemented this strategy along with their regular work.
• Black Belt - Guided the Green Belts in the implementation of the strategy. They were
completely devoted to Six Sigma.
• Master Black Belt - Supervised the Black Belts and were responsible for identifying
the projects in which this strategy could be implemented.

17. The Six Sigma Strategy was directly linked to compensation
• Typically, 40% of the annual bonus of GE’s top 7000 employees was
directly related to involvement in Six Sigma.
• As a result, by 1996, Six Sigma strategy was applied to 3000 projects and
this number rose to 7000 by 1997.
There were concerns within GE that stress placed on Six Sigma was leading
to an increase in bureaucracy as employees were rigidly following
established processes and were not willing to try new things. But Welch
said that he was ready to put up with a little bureaucracy if it brought
improved production and greater efficiency in the company.

18. Informal
Culture
Encouraged communication at all levels:
- Top Down
- Bottom Up
- Lateral
• The employees addressed Welch as “ Jack” and were encouraged to
express their opinions candidly to their superiors or to him directly.
• Welch tried to create “small-company environment, with big-company
resources”.

19. Visibilit
y
“It was remarkable how, at a company of GE’s size, employees at even the lowest
levels in the company hierarchy seemed to know Welch and his opinions”
Welch used GE’s various meetings and review sessions to make sure that all GE
employees knew his opinions and ideas.
The meetings, gave people a chance to state their opinions and Welch to gauge
leadership potential in them.
Welch’s speeches were regularly video taped, translated into local languages and
sent to various GE setups across the world.

20. Appreciatio
n
“We’re pebbles in a ocean, but he knows about us. He’s able to get people to give more of
themselves because of who he is,”
- Brian Nailor, Marketing Manager
Welch frequently used to send
personal notes to employees of all
levels..
He appreciated their contribution,
and guided, inspired them to action.
“Bill we like you for a
lot of reasons, one of
them is that you are
a very special
person. You proved it
again this morning,
good for you and
your lucky family.”

21. The Other Side of Welch
“GE functioned as a true meritocracy under Welch.”
– Analysts
“There are carrots and sticks here, and he is extraordinarily good at applying both”
– Gary M. Reiner, Senior VP
He used to ask people, “What have you done for me lately?”
He had a tendency to jump into conclusions about people.
He pressurized employees and demanded strict performance.
He was a hard task-master who created fear in his subordinates.

22. “It’s a part of living with Jack. If you’re doing well, you probably have more freedom than more
CEOs of publicly traded companies. But the leash gets pulled very tightly when an unit is
underperforming .”
- GE Executive
Welch was involved too deep in the business.
He demanded regular reports from the managers when an operation was not up to the
mark.
And when the business was functioning well, the head of the business was given a great
deal of autonomy.
The Other Side of Welch

23. Performance
Good performers were always rewarded well By Welch.
He classified employees under three categories – Top 20%, Middle 70%
and bottom 10%.
Welch also believed that retaining non performers was detrimental to
the company’s health and that they would be better off in another
company where the work was more suited to their potential and
inclinations.

24. Meetings
Annual C Session meeting in April-May
• Meeting between three senior executives with top managers each of GE’s
twelve businesses.
• Done to review performance over the previous year.
• Objective was to identify and promote leadership talent
• Crotonville meetings.

25. 4E Theory
Energy – A great leader has a big motor and is always on the go, displaying limitless
energy. If life had a speed limit, this leader would constantly get tickets
for hyper-charged “drive”. Even at warp speed, this leader embraces change.
Energizes – A great leader not only has energy, he or she can transmit energy to others.
These leaders “spark others” to action, inspire people to respond to their “vision” and
share the credit if that’s what it takes to get going.
Edge – As a “strong competitor,” the leader tests the margins, makes “difficult decisions”
and doesn’t hesitate to hire or fire.
Executes – A leader “delivers results” and is a “consistent performer.” Activity and
productivity are not synonymous – that’s one of the toughest lessons for leaders to
learn. Great leaders turn energy into production.

26. Adoption of Ideas
• Six Sigma from Motorola Inc.
• Demand Flow Technology from
American Standard.
• Bullet Train thinking from Yokogawa.
• Quick Market Intelligence from Wal-
Mart.

27. Failures
1983 - GE factory automation ran into serious losses due to faulty
demand projections.
1984 - Welch was criticized for sale of GE’s appliance business to Black &
Decker.
1987 - Acquisition of Thomson SA, a French medical diagnostics firm.
1994 - Kidder, Peabody & Co. scam.
2000 - Attempted merger with Honeywell Inc. an aerospace and
industrial-equipment group.

28. Impact
Between 1981 and 2001, GE’s revenues increased from around $27
billion to $129.8 billion.
By the time Welch retired from the company, GE was not only the
biggest corporation in the world, but also one of the most profitable
one.

29. Under
Jeffrey Immelt

30. Redesigning
Immelt was eligible to receive stock worth $7.5 million over a period
of 5 years.
Half of stocks would vest if GE’s cash flow from operations rose at
least 10 percent annually over next 5 years.
The other half would accrue if GE’s stock met or exceeded the average
performance of the Standard & Poor’s 500-stock index.

31. Modification of Equity Packages
He linked stocks of GE executives to the company’s performance.
He focused on both retention and performance.
“We believe that our pay should be completely transparent, that
shareholders should know how we’re paid. We have a philosophy on
compensation that’s based on performance.”

32. Strategic
Improvement
• Improve investor confidence by reshuffling GE’s portfolio.
• Spinned-off less lucrative business and acquired other
strategically significant ones.
“ I don’t want us to be a company that does deals because we can. I want us to
do the deals we need to do to improve strategically. If I didn’t think this
improved our business strategically for the long-term good of our shareholders, I
wouldn’t do it. We’re not in the business of flipping assets. That’s not our game.”

33. Acquisitions &Focus on R & D
• Immelt sold less profitable GE businesses like Insurance and spent
more than $60 billion to acquire businesses in new and fast growing
industries.
• He invested to set up new research centers in China, India and
Germany.
• He increased company’s R & D budget from $286 million(2000) to $359
million(2004).
• He wanted to create ‘Global Brain Trust’ to spur innovation and
globalize research.

34. External Communications
• Under Immelt, GE increased its external communication.
• Communicating with investors and third parties became very important.
• Immelt spent more than 70% of his time away from his office at GE’s
headquarters meeting with investors or employees.

35. Focus on Customer Satisfaction & Intangible Factors
• Focus shifted from performance and strictly quantifiable results to customer
satisfaction and value.
• Tied executive compensations to factors like ability to boost sales and generate
customer satisfaction.
• Removing emphasis from the bottom-line results for basing compensation.
• Encourage employees to take risks and come up with innovative ideas.
• Stretch GE’s Six Sigma quality initiative into customers’ processes to create more
value for them.

36. Outsider Involvement & Diversity
• There were more outsiders at senior positions.
• Managers were encouraged to ‘develop a passion’ for job. They spend
longer time at one job and become experts which was different from
Welch era where managers were transferred within industries every few
years.
• Focus on enhancing general management skills rather than industry
expertise.
• Under Immelt, there was greater amount of diversity in GE’s workforce.
• In early 2000s, 50 percent of all senior executive hires and 54 percent of
new corporate officers were women, minorities or foreign employees.
• Created separate diversity forum and encouraged mentoring programs for
women, minorities and foreigners.

37. Commercial Council - Shift from Production to
Marketing
He set up Commercial Council, a high profile group.
Consisted of top sales and marketing executives as well as some unit heads who met
every quarter to discuss growth strategies and ways to reach customers innovatively, as
well as evaluate new ideas from the senior staff.
Under Immelt, GE’s focus shifted from production to marketing.
GE designed new marketing courses to train the company’s marketing executives.
“The best managers are great marketers and not just great operators.”

38. Innovation and Creativity
• He launched ‘Innovation Breakthrough’ to promote Innovation & Creativity in the
company.
• Employees were expected to come up with ideas to improve GE’s existing products
or for the development of new products.
• He aimed to prove that GE could grow internally and organically and not just
through acquisitions.
• He generated ways to spark idea generation.
• Executives were encouraged to hold ‘Idea Jams’.
• GE Energy also set up a ‘Virtual Idea Box’ where employees could post ideas on the
web.
• ‘Excelerator Awards’ for the development of ideas.

39. Customer Focused Business
• He reorganized GE’s business to make them more customer focused.
• Reorganization was done to lower costs and eliminate redundancies,
as well as to implement new systems of customer management.
• As opposed to product based grouping, customer based grouping
made it easier for GE to mine and manage customer information.
“ This change allows us to leverage our exceptionally deep leadership
team to accelerate growth and improve productivity.”

40. Clean and Green GE
• Under Immelt GE was becoming ’cleaner and greener’. More investment was done in
‘Eco-imagination’ project.
• ‘Eco-imagination’ projects are related to the development and use of technologies
that lead to cleaner and environmentally responsible products and processes at the
company.
• It also has reduced carbon di-oxide emission.
• He started evaluating managers on their involvement in environmental
responsibility.
• GE’s new environmental mantra was ’green is green’(invoking the green color of
American currency).

41. Governance Changes
GE had a reputation of good
governance. Immelt tried to
enhance it by bringing more outside
directors to the board.
Also adopted some accounting
changes to make its financials more
transparent.

42. OB
Analysis

43. Theories of Learning
Jeffrey Immelt
Social Learning:
People can learn through
observation and direct experience.
Jack Welch
Operant Conditioning:
A type of conditioning in which
desired voluntary behavior leads
to a reward or prevents a
punishment.

44. Job Attitudes
Under Jeffrey Immelt
Psychological Empowerment:
Belief in the degree of influence
over the job, competence, job
meaningfulness, and autonomy
Immelt made his employees on
intangible aspects like customer
satisfaction, innovative ideas, etc.
which would increase job
meaningfulness. He also gave
more autonomy to his employees.
(Ref: Case Page 14)
Under Jack Welch
Job Involvement:
Degree of psychological
identification with the job where
perceived performance is
important to self-worth.
Welch made his employees focus
on job-performance based
rewards so much that they would
identify self-worth with perceived
performance.
(Ref: Case Page 8)

45. MBTI - ENTJ
Jack Welch
(Extroverted, Intuitive, Thinking, Judging)
(Sociable & Assertive, Unconscious Process, Uses Reason & Logic, Wants Order & Structure)
• Welch: "I am brutally honest and outspoken. I am impatient and, to many,
abrasive."
• Welch: "The world isn't that complex!"
• Welch: "Can you say yes or no? Or are you one of those people that always
wants a little more data? A 'maybe' person. ... I hate those people!"
• Welch: "Self-confident people aren't afraid to have their views challenged.
They relish the intellectual combat."

46. MBTI - ENFP
Jeffrey Immelt
(Extroverted, Intuitive, Feeling, Perceiving)
(Sociable & Assertive, Unconscious Process, Uses Values & Emotions, Flexible & Spontaneous)
• Immelt: "I have always believed the future is going to be better than the
past… and I believe I have a role in that."
• Immelt: “Number one value is Integrity."
• Immelt: “Every leader needs to clearly explain top three things the
organization is working on. If you can’t you are not leading well.”
• Immelt: “Surviving a failure allows you more self confidence. Failing is a
great learning tool, but it must be kept to an absolute minimum."

47. The Big Five – Jack Welch
1. Extroversion: This trait expresses one’s comfort level with relationships.
Jack Welch scores high in this dimension as we have explained he was extrovert,
gregarious, assertive, and sociable.
2. Agreeableness: This dimension refers to individual’s propensity to defer to others.
Jack was an assertive person; he scores average in this dimension because until and unless
someone gave him a strong reason he would not believe them.
3. Conscientiousness: This is measure of reliability.
Jack Welch was conscientious and highly organized, he score high in this dimension. He
had high standards and always strived to achieve his goals.
4. Emotional Stability: This dimension stands a person’s ability to withstand stress.
Jack Welch was generally calm. He was able to deal with stress but sometimes
experienced feelings of guilt, anger and sadness and scores average in this dimension.
5. Openness to Experience: This address one’s range of interests and fascination with novelty.
Jack Welch was open to new experience with broad interests and is very imaginative and
scores high in this dimension.

48. The Big Five – Jeffrey Immelt
1. Extroversion: This trait expresses one’s comfort level with relationships.
Immelt focused on internal as well as external communication. More People-Oriented
than Jack Welch. Friendly and more approachable. Jeff scores very high in this dimension.
2. Agreeableness: This dimension refers to individual’s propensity to defer to others.
Immelt was not as assertive as Welch and was more agreeable than Welch hence he
scores higher than Welch in this dimension.
3. Conscientiousness: This is measure of reliability.
Jeff was organized, disciplined and conscientious. He focused on strategic improvements
and paid heed to concerns of Investors and Consumers. He scores high in this dimension.
4. Emotional Stability: This dimension stands a person’s ability to withstand stress.
Jeff managed company in very tumultuous times which shows good self-confidence.
Handled setbacks properly & enjoyed successes equally. He scores very high in this
dimension.
5. Openness to Experience: This address one’s range of interests and fascination with novelty.
Jeff made many acquisitions, involved outsiders, promoted diversity. He was more open
to new experiences compared to Welch. Jeff scores very high in this dimension.

49. “It is apparent from the
case that Welch was very
much Task-Oriented and
whereas Immelt is more
People-Oriented.”
Fiedler’s Model

50. Jack VS Jeffrey
• Stressed on intangible things like
customer satisfaction and values
• Is people-oriented
• Promoted outsiders and diversity
• Less demanding and little bit easy
going
• Teases
• Employees found him
approachable
• Took on when GE and Business
environment was in great tumult
• Stressed on tangible things like
performance & quantifiable results
• Was task-oriented
• Workforce Diversity was at lowest
levels
• Very demanding boss and a hard
task-master
• Taunts
• Employees were apprehensive of
him
• Took on when GE was in good
shape

51. References
• Case Study - Jack Welch and Jeffrey Immelt: Continuity and
Change in Strategy, Style and Culture at GE (OB Course-Pack)
• http://www.nytimes.com/2015/04/14/business/jeffrey-
immelt-with-new-challenges-refashions-jack-welchs-ge.html
• http://www.celebritytypes.com/entj.php
• http://mhanewsnow.typepad.com/thebigpicture/2005/07/win
ning_by_jack.html

53. Prepared By: Group 5
• Arjun Parekh
• Debolina Choudhury
• Naren Shetty
• Nidhi Kompal
• Nikhil Kalra
• Rishabh Gupta