An ideal leadership can be the guiding engine of an organization and can impact the lives of the followers to a great extent. However, such instances are still very few, where the leaders have established their performance beyond any question. Therefore this paper explores the instance of Jack Welch, whose leadership is considered as one of the greatest example of all time due to its approach towards change and its innate desire to transform every follower by empowering them to become leaders themselves.
The basic information about the source stands like below:
The title of the book: 29 Leadership Secrets from Jack Welch (Abridged from Get Better or Get Beaten, Second Edition).
Author: Robert Slater.
Copyright Date: 2003.
The subject of the book
This book assembles invaluable trade secrets practiced by Jack Welch, the long-time (1981 – 2001) CEO of General Electric (GE), and who is regarded as one of the greatest business leaders of modern times. In the process, this book cites examples of situations that challenged Jack and how he responded to such situations with his vision, creativity and strategy.
The Leadership style, Characteristics and Traits of Jack Welch
Jack Welch’s leadership style can at best be defined as transformational leadership, where his vision guided his mission and transformed the company in the process. He was always open to the change, and so much so, his favorite line in this regard was, “Change, before it’s too late!”
Jack’s functioning clearly substantiates the above view. It was through his actions he wanted to keep the company growing on and on, thereby creating its own benchmark every time. His own mission statement too corroborates this fact, when he says, “We want to change the competitive landscape by being not just better than our competitors, but by taking quality to a whole new level. 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.”
This attitude of surpassing one’s own stature every now and then by virtue of service perfectly fits with the philosophy of transformational leadership, as its foundation, too, is service.
His earnest attempt of empowering the employees by launching a 10-year program also adds to the fact that he was a transformational leader who is bent on empowering each of his followers.
How Jack’s Style of Functioning or Traits Impacted the Organization.
Jack’s leadership style surely had positive impact on the organization, which is amply proved by its huge rise as a corporate giant. In 1981, when Welch became the Chairman and CEO of GE, the company had annual sales of $25 billion with an earning of $1.5 billion, which skyrocketed to $129.9 billion and $12.7 billion respectively by 2000, the year before Jack retired from his post. This was a remarkable feat, which even Fortune magazine too recognized by selecting GE as “America’s Greatest Wealth Creator” from 1998 to 2000. Altogether these instances settles Jack’s efficacy as a corporate leader beyond any doubt.
Jack’s Approach to the Challenge
When he took over as the CEO of GE, the state of American trade and commerce reeled under inflation and the global competitors were capturing market shares in an unprecedented manner. Thus Jack faced the challenge of raising the business of the company, to which he responded by inventing a set of new strategies. Firstly he announced that all businesses of GE would have to be either number one or number two in their respective market, failing which they would be shut down or sold off. Though this “number one, number two” policy seemed risky, yet it brought forth the possibility of positioning GE for double-digit growth for years to come.
Secondly, he announced plans to purchase communication giant RCA for $6.28 billion, which was the largest non-oil merger at that time, when GE was ranked ninth among America’s largest industrial firms and RCA ranked second among the service firms of America. Jack’s decision to merge RCA with GE had consolidated the company like a corporate powerhouse with annual sales of $40 billion and pushed it to the seventh rank on the Fortune 500. This decision was revolutionary under the then context, as the company had a tradition of growing from within.
Thirdly, he launched a 10-year program called “Work-Out” to harness the brains of his employees, where he explained its utility as a tool to help the employees to stay away from activities like “wrestling with the boundaries, the absurdities, that grow in large organizations”.
Fourthly, Jack reinforced the sense of reality among his followers by devising a strategy called “Face Reality”, through which he facilitated the employees of GE to see the world the way it is and not the way they wish it were, or hope it will be.
Such an approach helped him to establish his logic behind restructuring the company according to the need of the time, thereby succeeding to prevent bureaucratic waste on one hand and to abolish the “taken for granted” attitude of the employees regarding their jobs. In all, he successfully faced reality, adjusted to that reality and moved quickly and that kind of leadership response to the challenge had propelled GE to the rank of the strongest company in America by 1990s.
Evaluating Jack’s Response to the Above Situation
Jack’s approach to the situation seems to be the best on many accounts. Firstly, he successfully envisioned the change and embraced that with his own creativity and strategy. He was able to see both inside and outside the box, which enabled him to achieve even more than the generally expected outcome. Apart from being a visionary, he also possessed the basic leadership qualities to a great degree, as it is evident from his ability to effectively communicate with followers, showing courage in decision-making or truly attempting to empower the followers. He rightly modeled they way as a leader by practicing what he preached and believing in his self to deliver better than the previous year.
Some might argue that his decision of ticking off businesses in which company would fail to secure at least second position were too drastic, but in the end, Jack’s success in positioning most of the GE businesses among the top rung prove otherwise. His decision to prune down the number of bureaucrats in the organization and delegating more authority to empowered employees, or for that matter, his decision to abolish the company policy of assuring an employee a job for life too might look harsh, but again, all of these policies converted GE into a giant from the rank of the ordinary. Jack’s response to the situation can be summarized in this fashion that he faced the reality and then acted decisively and quickly on that reality.
It cannot be wise to operate differently when Jack’s leadership proves to be a wholesome solution to the situation described above, and accordingly, this researcher too, has enough reasons to believe that he would have acted the same way as Jack did.