Monday, February 1, 2010

"Journey of General Electric (GE) from Jack Welch to Jeff Immelt" - Prof.M.S.Rao

When Bill Rothschild, the CEO of Rothschild Strategies Unlimited LLC and author of “The Secret to GE’s Success” visited my blog http://profmsr.blogpost.com captioned “Where Knowledge is Wealth” and posted his comments, I decided to pen few words about GE’s journey from Jack Welch to Jeffrey Immelt. I also decided to compare and contrast between the business leaders Jack Welch, the ex-CEO and Jeffery Immelt the current CEO of GE.

It was indeed a tough task for Jeff Immelt to take over the reins of leadership from the legendary business leader who turned around and put GE on the top of global business map. Jack transformed GE from a mere manufacturing conglomerate to services sector. Under his two decades of leadership the company operated and excelled in every sphere. He delivered more than what the stakeholders expected through his tough decisions and innovative strategies.

When someone becomes a legend it is very difficult for others to live up as the expectations and aspirations of the people will be higher. It is a well admitted fact that leadership changes from time to time. What worked for Jack may not work for Jeff and even to Jack as well since the time and technologies are changing rapidly. After Jeff took over, terrorist attacks of September 2001 hit American businesses badly. Adding fuel to the fire is the global downturn. Jeff has to take care of recessionary aspect and ensure that the company reaches greater heights under his leadership.

Jack vs. Jeff:

When we compare and contrast Jack with Jeff, Jack believed in magical numbers while Jeff emphasized on innovation. Jack was a very good strategist and Jeff invested more in R& D. Jack has uncanny ability to spot opportunities and manage threats. He always strived for excellence and aimed at being either in #1 or #2. Above all, Jack was a ruthless task master. Jeff works with long term perspective rather with a short term one. For Jeff GE is a marathon, not a sprint.

Challenges for Jeff:

Investors’ expectations have gone up during the rein of Jack Welch. Currently Jeff is feeling the heat. One way he has to overcome the expectations of the investors and stakeholders and other way to beat the economic downturn. It is a difficult task for Jeff to live up to the expectations of the stakeholders where his predecessor evolved as a global legend with his uncanny ability to turnaround the company and to take to greater heights. Besides, time is not in favor of Jeff.

Jeff is doing a great job during recession. It is unfair to compare Jeff with Jack and blame Jeff for all the economic ills. It is not only the GE which has been affected, but the entire world is adversely affected with economic downturn. However when compared with other global giants, GE still stands taller in economic downturn under the leadership of Jeff.

Jeff’s Achievements:

Jeff successfully erased the impression that American CEOs are short-term speculators. He is an ideal and ethical leader as he refused to accept his $12 million bonus. In addition, he purchased millions of dollars of GE stock when it was sliding to boost the confidence of stakeholders.

Jeff Immelt is bullish and says, “We have restructured, adjusting to market realities, and increased our investments. We’ll launch more new products during this downturn and sell these products worldwide to create an even better company.”

Task Ahead for Jeff:

GE has business beyond boarders. It calls for boundary less leader who thinks beyond boarders and beyond the core competencies. Jeff must think beyond the existing business portfolio. He needs to reinvent by keeping the current complexity and uncertainty in view.


“I am proud to work at GE, a great American company. Since I joined GE in 1982, GE has earned $230 billion and paid $130 billion in dividends to investors – more than any company worldwide.” – Jeff Immelt.

Jeff has to be different from Jack. He requires more creativity and innovation to size up and line up the things efficiently and effectively. GE’s journey from Jack to Jeff is remarkable indeed. It is a tough task to conclude who is the better business leader. What worked for Jack Welch will not work for Jeffery Immelt and probably it may not work for Jack Welch also.

1 comment:

ram said...

Yes, I agree with your point of difficulty to decide "who's the best?",Especially when we compare two legends like Jack Welch and Jeff Immelt.
I am happy to know that Jeff is focussing at Innovative strategies to bring the GE back to Ace.

Ram Avtar
Management. Trainee (GENPACT)