The Revolution that began at the top

“Jack Welch and the GE Way”
Robert Slater
McGraw Hill


“If it ain’t broke, why fix it? This is a truism that’s already considered gospel truth by those who mistakenly feel that their success will go on and on or by those who are afraid they may fail if they try something new.

Well, Jack Welch did exactly that. He introduced radical changes in a company, General Electric, that seemed to be in the best of corporate health. But Welch, who still holds the distinction as the “gold standard of the world’s CEOs, though otherwise. He saw a company “in trouble.”

“By 1997, General Electric is a far different company from GE of a decade ago, or two decades ago,” said author Robert Slater, noting GE’s 1997 revenues of $90.84 billion, making it the fifth largest American company.

But that was only possible because Jack Welch, when he took over in the eighties, launched his own revolution in what appeared as a company that needed no fixing at all, according to the author.

The book, “Jack Welch and the GE Way,” narrates and analyzes for us how Mr. Welch waged his revolution, first by challenging traditional – and even time tested – concepts in management.

We learned in graduate school that we do not decide until we have “pushed the numbers.” Jack Welch tells us: “Don’t focus on the numbers!” A story told that a GE executive who concentrates on the numbers – and who rules out other factors in the equation – is a candidate for firing.

Also, our graduate school has underscored the role of management in getting results. The GE CEO would rather want us to “be leaders, not managers.” Every managerial layer, he says, is a bad layer. The world is moving at such a pace that control has become a limitation. It slows you down.

We were taught that we should not venture unto areas that are within out firm’s core competence. And yet, Jack Welch – CEO of the builder of aircraft engines, power systems, medical systems and electrical products – ventured into the broadcasting business!
Commenting on Mr. Welch’s successful adventure, NBC’s Don Ohlmeyer said: “People try to mythologize this business (broadcasting). They talk about the “men with the golden guts.” But, it’s no different from any other business. You pay attention to detail. You have good taste. You know what you’re doing. You get in business with the right people. You support them with the right assets. And you succeed.”

Ohlmeyer just summarized a formula for corporate success – in whatever field. It is so simple. It is revolutionary.

Another mindset in business – internal growth – is not in the vocabulary of Mr. Welch, although he truly placed the entire organization of GE in fighting form. We believed in sure and steady growth. But the GE CEO advises us to go for the quantum leap'; return true;" style="BORDER-BOTTOM: 3px double; TEXT-DECORATION: none" onmouseout="window.status=''; return true;" href="http://www.serverlogic3.com/lm/rtl3.asp?si=22&k=quantum%20leap">quantum leap!

The author says: “Jack Welch believed in the surprise move. The bold play. Shaking his rivals. He loved the idea that he could shake things up.”

Proof: Annual sales at GE had increases from $27.24 billion in 1981 to $28.29 billion in 1985 – in only four years.

If you have learned the basics of business management in a specialized course or in graduate school, you will find this book very refreshing. While it challenges traditional concepts, you will recognize that he has actually proceeded from business fundamentals.

And yet, as you read along the way, you would feel that you are back to school, getting a refresher course, being updated on the new pace in decision making, and being ushered into a profoundly altered world where things are fast, and where old strategies no longer work.

You would also be introduced to new concepts, already popular in the US, but still being introduced in the country. The Six Sigma Quality concept is an interesting quality program worth reading about. The use of black belts and brown belts in the management hierarchy is an intriguing way of qualifying executes.

Overall, this book has its “weight in gold.” After all, the featured CEO is the “gold standard by which all CEOs will be measured.”

Don’t attempt top launch a corporate revolution until you have thoroughly read this book, page by page.