GE's battle plan for executives

JACK Welch, the chairman and chief executive officer of General Electric, is one of the world's most admired corporate executives.

He is a living legend in corporate America. The contemporary history of GE, a company founded by Thomas Edison in 1878, revolves around the Welch leadership, which has transformed the diversified conglomerate into a formidable money making machine.

He really brings good things to life at GE. The company is involved in a broad range of businesses, from financial services, aircraft engine manufacturing, plastics, power systems, broadcasting, medical systems, lighting, industrial systems, appliances and transport.

Since taking over the helm at GE in 1981, Welch moved quickly to lay the foundation for future growth. Then GE appeared to be doing just fine. In 1980, it posted annual sales of US$25 billion and earnings of $1.5 billion. GE's market value was $12 billion, ranking 10th among the US top companies.

But Welch believed that GE was heading for a fall. He initiated three business strategies. First, only the businesses that were either number one or number two in the market would be kept. Second, he downsized GE's payroll, ending a job-for-life employment policy. He sold $12 billion worth of business and bought $26 billion in new business. And finally, he streamlined the bureaucratic layers within the gigantic GE organisation.

In 1998, GE posted sales of $100.4 billion, the fifth largest in the US, and $9 billion in earnings, the second highest.

In 1999 Welch watched the spectacular growth of the Internet with amazement. Going into a one-week retreat with his executives, he emerged with a declaration to all his staff that he would like all of them to think about building their businesses around the Internet. This exemplifies the swiftness of his actions.

What then is the secret of Welch's enormous success? Robert Slater's "The GE Way Fieldbook: Jack Welch's Battle Plan for Corporate Revolution" (New York: McGraw-Hill, 2000) provides a manual for corporate executives or MBA students wishing to get an insight into the GE way. This book, available at Asia Books for Bt975, is a must read for Thai executives who are looking forward to restructuring their businesses, but are not sure how to cope with global competition.

The book is very easy to digest. It is divided into two parts. The first part deals with how GE revolutionised corporate America with its management strategy. The second part focuses on Welch as the chief executive officer, his knowledge, his communication skills and his ability as a strategist.

There is a synopsis on what readers may expect to find in each following chapter. Chapter one involves the leadership module. The synopsis outlines what business leadership at GE is all about. What Welch thinks an ideal manager should be. What are the five business questions a business leader should ask? Why Welch spends so much time on the people's issues. And why he is so fervent about rewarding good managers.

There are question and answer sections at the end of each chapter to challenge the readers to think more about relevant problems in organisational management.

The book also covers the empowerment module or how GE employs the intelligence of its workers. In the organisation module, you get to read about the learning culture at GE. And in the customer module, you come to the famous six sigma programme that underlies GE's high productivity growth.

BY Thanong Khanthong