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My father worked his way up from the foundry to "Business Leader" (management) at GE, starting in the mid 1970s. GE was a mess internally, all the way down to

My father worked his way up from the foundry to "Business Leader" (management) at GE, starting in the mid 1970s. GE was a mess internally, all the way down to the shop floor, before Welch took over. His impact cannot be understated. We were big Jack Welch fans - if he hadn't grown GE the way he did, my hometown - where it was the largest employer for decades - would have been a lot poorer.

danmaz74 7y ago
Would you mind expanding what you think he did right? I'm curious to have a counterpoint to the other top comments, which are pretty negative.
- DavidAdams 7y ago
  If you're trying to turn around a mis-managed company, a few rounds of identifying and eliminating people in the manager ranks that aren't pulling their weight could have a huge positive impact. So I could see that "neutron" Jack's stack ranking could have been great, had it been limited. But when you're consumed with your own genius, you tend to think that the thing that seemed to work, and everyone praised you for yesterday will keep working tomorrow.
- michaelt 7y ago
  In some fields, acclaimed works seem cliched and obvious from where we are today, because the innovations that brought their acclaim have been so universally adopted. I'm not a historian of management theory so I don't know if the ideas are original, or even of how well Welch followed his own advice, but plenty of the things in his books are straight-talking common sense: * You should know your business well enough you don't need management consultants to tell you what to do * HR and hiring are important and should be represented in your senior team accordingly * If you want candour (which you do) you need to reward and praise it, not punish it * When there's a crisis, don't deny there's a problem He's not the first person to come up with every idea in his books, but even 40 years later there are companies that need to learn these things.
- brandonmenc 7y ago
  My experience is second-hand as a child and teenager while my father was working there, but I've talked to him a lot over the years about Welch and things like stack ranking, six sigma, etc, and what the company was like in the 1970s before Jack took over. The short version is that GE was an inefficient bureaucratic and operational mess at all levels - as I said, all the way down the shop floor. Welch came in and almost instantly turned the culture around - again, at all levels - and made it one of largest, most improved and respected companies ever. This article [0] from 1986 sums it up better than I can, but it rings true. They truly were boom times for anyone employed at GE - yes, if you survived all of the (necessary) layoffs. A note about stack ranking, since everyone complains about it: C players were not just summarily fired - they almost always had a few quarters to either improve, or move to a new team. It's not as ruthless as people make it out to be. An employee had to consistently underperform to be fired, although it's true that they didn't get very many second chances. [0] https://money.cnn.com/magazines/fortune/fortune_archive/1986/07/07/67821/index.htm https://money.cnn.com/magazines/fortune/fortune_archive/1986...
  - TheOtherHobbes 7y ago
    It's one thing to identify poor performers and have a one-off clear out. It's something else entirely to repeat the process year after year, for every team, no matter how well each team performs as a unit. That's even assuming you can somehow objectively identify "C players" in the first place. The reality is decisions are often made for personal and political reasons. And because of that, stack ranking turns a company culture into a back-stabbing mess of simmering fear and hostility, and product excellence is forgotten.
    - magduf 7y ago
      One method I remember hearing about to get rid of poor performers (in a one-off way) when I was an intern was that the company identified poor performers from different teams, moved them together into their own team, and then laid off the entire team, probably claiming that it was some external business necessity (like the team's product was uncompetitive in the market), instead of alleging poor performance. I guess this made it easier to get rid of a large number of poor performers without worrying too much about lawsuits over unfair terminations. Of course, this move took some time to make, probably many months to over a year.
wnissen 7y ago
So I've read the big GE management book written by the folks at Crotonville, and concluded that Welch did a lot right, like moving responsibility within the company to the level where the knowledge is, and shedding units that were fundamentally unprofitable. I think you're right that as manufacturing shifted toward globalized supply chains that a certain amount of pain was inevitable and necessary. However, it seems like a lot of his financial results came from "shaping" the quarterly earnings and various unsustainable practices. And for whatever reason his the culture he brought to the company has left his successors overseeing a company that has performed as one of the worst in the whole S&P over the last 15 years. Even if you take a pure industrial company like US Steel, which I don't think anyone would point to as being on the vanguard of management or product, GE is not doing all that well. I dunno. My pet theory is that "leaning" an organization is really a one-time thing, and that it's very challenging to do so without also removing the "seed corn" of research and even development of the next big thing. Though, to be fair, Edison himself had a wildly inconsistent financial record.
codazoda 7y ago
I had the amazing opportunity to sit through a training where Jack Welch came to our company and taught a dozen of us his simple time management system. This was back in 1996 and I’ve been using some of the idea’s he gave us ever since. His philosophy about focusing on creating leaders seemed solid. His philosophy on rank-and-yank cost him a lot of fans.
- deleted 7y ago
  [deleted]
- mo1ok 7y ago
  any link to or summary of his ideas?

danmaz74 7y ago

Would you mind expanding what you think he did right? I'm curious to have a counterpoint to the other top comments, which are pretty negative.

DavidAdams 7y ago
If you're trying to turn around a mis-managed company, a few rounds of identifying and eliminating people in the manager ranks that aren't pulling their weight could have a huge positive impact. So I could see that "neutron" Jack's stack ranking could have been great, had it been limited. But when you're consumed with your own genius, you tend to think that the thing that seemed to work, and everyone praised you for yesterday will keep working tomorrow.
michaelt 7y ago
In some fields, acclaimed works seem cliched and obvious from where we are today, because the innovations that brought their acclaim have been so universally adopted. I'm not a historian of management theory so I don't know if the ideas are original, or even of how well Welch followed his own advice, but plenty of the things in his books are straight-talking common sense: * You should know your business well enough you don't need management consultants to tell you what to do * HR and hiring are important and should be represented in your senior team accordingly * If you want candour (which you do) you need to reward and praise it, not punish it * When there's a crisis, don't deny there's a problem He's not the first person to come up with every idea in his books, but even 40 years later there are companies that need to learn these things.
brandonmenc 7y ago
My experience is second-hand as a child and teenager while my father was working there, but I've talked to him a lot over the years about Welch and things like stack ranking, six sigma, etc, and what the company was like in the 1970s before Jack took over. The short version is that GE was an inefficient bureaucratic and operational mess at all levels - as I said, all the way down the shop floor. Welch came in and almost instantly turned the culture around - again, at all levels - and made it one of largest, most improved and respected companies ever. This article [0] from 1986 sums it up better than I can, but it rings true. They truly were boom times for anyone employed at GE - yes, if you survived all of the (necessary) layoffs. A note about stack ranking, since everyone complains about it: C players were not just summarily fired - they almost always had a few quarters to either improve, or move to a new team. It's not as ruthless as people make it out to be. An employee had to consistently underperform to be fired, although it's true that they didn't get very many second chances. [0] https://money.cnn.com/magazines/fortune/fortune_archive/1986/07/07/67821/index.htm https://money.cnn.com/magazines/fortune/fortune_archive/1986...
- TheOtherHobbes 7y ago
  It's one thing to identify poor performers and have a one-off clear out. It's something else entirely to repeat the process year after year, for every team, no matter how well each team performs as a unit. That's even assuming you can somehow objectively identify "C players" in the first place. The reality is decisions are often made for personal and political reasons. And because of that, stack ranking turns a company culture into a back-stabbing mess of simmering fear and hostility, and product excellence is forgotten.
  - magduf 7y ago
    One method I remember hearing about to get rid of poor performers (in a one-off way) when I was an intern was that the company identified poor performers from different teams, moved them together into their own team, and then laid off the entire team, probably claiming that it was some external business necessity (like the team's product was uncompetitive in the market), instead of alleging poor performance. I guess this made it easier to get rid of a large number of poor performers without worrying too much about lawsuits over unfair terminations. Of course, this move took some time to make, probably many months to over a year.

wnissen 7y ago

So I've read the big GE management book written by the folks at Crotonville, and concluded that Welch did a lot right, like moving responsibility within the company to the level where the knowledge is, and shedding units that were fundamentally unprofitable. I think you're right that as manufacturing shifted toward globalized supply chains that a certain amount of pain was inevitable and necessary. However, it seems like a lot of his financial results came from "shaping" the quarterly earnings and various unsustainable practices. And for whatever reason his the culture he brought to the company has left his successors overseeing a company that has performed as one of the worst in the whole S&P over the last 15 years. Even if you take a pure industrial company like US Steel, which I don't think anyone would point to as being on the vanguard of management or product, GE is not doing all that well. I dunno. My pet theory is that "leaning" an organization is really a one-time thing, and that it's very challenging to do so without also removing the "seed corn" of research and even development of the next big thing. Though, to be fair, Edison himself had a wildly inconsistent financial record.

codazoda 7y ago

I had the amazing opportunity to sit through a training where Jack Welch came to our company and taught a dozen of us his simple time management system. This was back in 1996 and I’ve been using some of the idea’s he gave us ever since. His philosophy about focusing on creating leaders seemed solid. His philosophy on rank-and-yank cost him a lot of fans.

deleted 7y ago
[deleted]
mo1ok 7y ago
any link to or summary of his ideas?