Summary of Background and Facts
General Electric was just coming to terms with the stepping down of longtime CEO Jack Welch and the process of replacing seemed like a daunting task. For 20 years, Welch had led General Electric and made it one of the most diverse companies in America, and the world, not forgetting the numerous company and individual awards earned during this 20-year period. Founded in 1878 by Thomas Edison, GE had undergone several transformations in leadership by the time Jack Welch took over in April of 1980 from his predecessor Reg Jones. Welch embarked on the restructuring of the firm immediately he took over trying to change the culture in the company despite the American economy undergoing a recession at that particular time. He advocated and ensured that the company became “more lean and agile” only having employees who were adding significant value to the company’s objectives. This notion was later on copied by other companies’ leaders who hoped to have their teams become more productive just as GE had become under Welch.
Welch promoted an open-door policy in General Electric in a bid to make the company more transparent and create an environment of high productivity. Through various initiatives aimed at increasing productivity, the company realized a two-fold increase in the rate of productivity between the years 1988 and 1992. These initiatives were later replicated by other business leaders with varying degrees of success. By the end of his 20-year leadership period in 2001, Welch had seen GE named America’s most admired company for the three preceding years consecutively. On a personal level, he was named ‘Manager of the Century’, an accolade that only testified to his success in leading the company. The secret behind his successful business leadership was therefore bound to be keenly looked into by the industry and see if the initiatives he implemented could be replicated elsewhere with equal success.
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