John Frances Welch Jr. was born in Salem, Massachusetts, in 1935. A 1957
University of Massachusetts graduate, with a B.S. in chemical engineering,
Welch continued to pursue his education at the University of Illinois,
with M.S. and PhD degrees in chemical engineering.
Welch joined General Electric in 1960, and after only a year, he actually
wanted to leave the company and take a job offer he had received from
International Minerals & Chemicals. Welch was working as a junior engineer
in Pittsfield, Mass., at a salary of $10,500, but he was simply unhappy --
partly due to the measly raise he was offered, as well as what he felt was
GE's strict bureaucracy.
Although he felt under appreciated by his boss,
Jack Welch obviously made quite
an impression on Reuben Gutoff, a young executive who was one level higher
than Welch. He took Welch and Welch's former wife Carolyn out, where they
sat for 4 hours straight while Gutoff tried to convince Welch to stay.
Gutoff was disappointed by Welch's upcoming departure, and promised him a
different kind of bureaucracy, one with the dominating attitude of
"small-company environment, with big-company resources."
Gutoff knew that Welch would be an important asset to the company, and
tried his hardest to keep him onboard. Welch, and in turn GE, have Gutoff
to thank for what became of the company.
Welch's steadfast rise to the top of the GE ranks was thanks to his
aggressive marketing of the company's products and services. He was named
vice-president in 1972, senior vice-president in 1977, vice-chairman in
1979, and became GE's youngest and eighth Chairman and CEO in 1981,
as Reginald H. Jones' successor. First he introduced a strategy that
demanded each division should set out to be the number one or two in its
market ('fix it, sell it, or close it'). In the 90s
Six Sigma became very popular, after
Welch adopted it at General Electric.
During his 20-year tenure as CEO of GE, Welch has been credited with
changing the corporation around, and inflating the company's market
value from $12 billion in 1981, to approximately $280 billion in 2001.
Jack Welch's success as CEO
of GE is in large part due to his tremendous leadership
skills. Welch knew how to effectively communicate key ideas to the rest of
the staff, not only by delivering messages, but persistently repeating
them over and over, and ultimately driving the messages home. His concept
of change was also aggressive, by clearly outlining what needs to change.
Welch's corporate culture is like no other; what he hated about the
organization in his early days as a chemical engineer, is exactly what he
transformed as CEO: the red tape and bureaucracy of the company. He
changed that by making it an informal learning environment, which he
liked to refer to as a "grocery store."
This informal approach allowed Welch to get to know his employees,
interact with them, and get involved in all aspects of the business. Welch
also prided himself on his personal touches, such as the handwritten memos
sent to employees. But while he's known as personable and persistent, he
is also renowned for being a hard and very demanding leader, which is why many employees
have coined him Neutron Jack.
Jack Welch King of
Whatever his tactics, the fact that Welch is one of the most successful
business leaders of all-time is indisputable. He has swelled the market
value of the company to a degree unmatched by any other CEO, an
accomplishment not even Bill Gates, Michael D. Eisner or Warren Buffett
could lay claim to.
After 40 years with GE -- 20 years of running the place -- Welch left his
position as CEO at September 7th, 2001, to embark on a whole new journey: retirement. But
not before serving as corporate consultant to a group of Fortune 500
companies, all in different industries.
He has written a memoir of his life experiences and business strategies in
his book, Straight From the Gut published in September 2001.
Thanks to redefining corporate cultures, leadership skills, and
introducing new approaches to business, Jack Welch surely made a major
contribution to GE and to the business world at large.