Jack Welch

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Jack Welch (2012)

John Francis "Jack" Welch Jr. (born November 19, 1935 in Peabody , Massachusetts , † March 1, 2020 in New York City , New York ) was an American manager . He was CEO of General Electric from April 1981 to September 2001 .

Welch was born in 1935, the only child of a railroad conductor and housewife in the small town of Peabody. With his policy of repairing, selling or closing (English "fix it, sell it or close it") of loss-making parts of the company and the purchase of promising technologies, he made the US conglomerate General Electric (GE) a profitable and growing company.

Jack Welch's personal wealth was estimated at $ 720 million (as of 2006). He was married to Suzy Welch, the former editor-in-chief of the Harvard Business Review , 24 years his junior, and Suzy Welch, in his third marriage in 2004 .

Career

Jack Welch first attended the state University of Massachusetts and received his doctorate from the University of Illinois . The trained chemical engineer , who had already worked in various positions at General Electric from 1960, came to the helm of the company, which was a little sluggish, in 1981 and led it as CEO until September 6, 2001.

Welch increased sales of General Electric of 27 billion US dollars in 1981 to 130 billion US dollars in 2001, the annual profit sevenfold to around 12.7 billion US dollars; at the same time, the number of employees worldwide fell from 400,000 to 300,000.

In his pension contract, Welch had, in addition to an annual payment of nine million US dollars, guaranteed free use of a business plane, a VIP box at the Boston Red Sox baseball games , an apartment in Trump Tower and free dining in a posh restaurant; after criticism he renounced these perks.

In 1999, Welch was named "Manager of the Century" by Fortune business magazine . He was also an elected member of the American Academy of Arts and Sciences since 1994 and of the American Philosophical Society since 2000 . Welch was considered a merciless and highly successful corporate leader who became the role model for generations of managers in the neoliberal Reagan era.

In 2009, the Jack Welch Management Institute was established at the University of Ohio with a donation from Welch . The institute offers an MBA program based on Welch's management philosophy, which can be completed as distance learning via the Internet.

Management methods

The core of his management approach was the rule of “fix, close or sell” (German: repair, close or sell ). Thereafter, a part of the company that does not achieve the growth and return targets or shows operational deficits is closed or sold if the problems cannot be resolved within two years.

As part of the “work-out” program, he trained 8,000 executives annually at the company's own training center in Crotonville, near New York, and introduced regular meetings between managers and employees.

In 1996 he introduced Six Sigma as a quality control method to General Electric . The aim of this method adopted by Motorola is that no more than 3.4 errors per million error possibilities are allowed in one process step, so that the final quality of the products is sufficiently high after having gone through all process steps. Welch changed the bonus system and made payment 40 percent dependent on achieving the Six Sigma goals.

Welch is also considered to be one of the fathers of the shareholder value concept , in which entrepreneurial decisions are exclusively geared towards the benefit for the shareholders. The movement was born when he gave a speech about taking over the management of General Electric in 1981 in a New York hotel. He then led GE for more than two decades, and with his successes during this time, he made a significant contribution to the dominance of shareholder value.

In March 2009 ( Financial Times Deutschland of March 13, 2009) he turned away from this concept and said that his previous belief in this regard was a "stupid idea". It is wrong that managers and investors set the steady rise in earnings and steady share price increases as their paramount goal. “If you look closely, shareholder value is the stupidest idea in the world. Shareholder value is a result, not a strategy; the most important interest groups are our own employees, our own customers and our own products. ”This extended approach corresponds to the model of a balanced scorecard that is now known .

Jack Welch is considered one of the most successful managers and management thinkers in the United States, but also one of the most controversial. His radical methods earned him the nickname Neutron Jack , as an allusion to the mode of action of a neutron bomb , in which people are wiped out, but the buildings and machines are preserved.

Stars and lemons

The "20-70-10" rule established by Welch states that the best 20 percent of employees ("stars") in a company are rewarded with bonuses, the 70 percent in the middle demanded and encouraged as best as possible, the weakest 10 percent ( "Lemons") should be fired. While the principle has been consistently practiced at General Electric for a long time in the USA, the German branch is also terminated on the basis of poor performance assessments, but percentages are dispensed with, with which it is determined which proportion of the workforce should be laid off.

Works

Web links

swell

  1. ↑ Jack Welch: What Counts - The Autobiography of the World's Best Manager . Ullstein Verlag , 2003, ISBN 3-548-36398-9 .
  2. ↑ Marty Steinberg: Jack Welch, former chairman and CEO of GE, dies on March 84 , 2020, accessed on March 2, 2020 .
  3. ^ Member History: John F. Welch. American Philosophical Society, accessed February 10, 2019 .
  4. ↑ https://www.sueddeutsche.de/wirtschaft/jack-welch-tot-nachruf-1.4828002
  5. ↑ Manage like Jack Welch ( Memento from July 4, 2009 in the Internet Archive )
  6. ↑ Jack Welch swears off shareholder value ( Memento from August 3, 2012 in the web archive archive.today )
  7. ^ Carrot and stick in: Handelsblatt, September 16, 2003
personal data
SURNAME Which Jack
ALTERNATIVE NAMES Welch, John Francis Jr.
BRIEF DESCRIPTION American manager
DATE OF BIRTH November 19, 1935
PLACE OF BIRTH Peabody , Massachusetts , United States
DATE OF DEATH March 1, 2020
Place of death New York City , New York , United States