Jack Welch
...ften chaotic as it captured market after market. Company meetings were said to resemble food fights, and Welch's employees earned reputations as rowdy womanizers. But his success earned him promotion after promotion; in 1977 he became head of GE's consumer credit corporation, and, on 1 April 1981, was appointed chairman and chief executive of GE itself. GE was then the eleventh largest company in the US, worth $12bn, with earnings of $1.65bn in 1980. Welch, though, was already looking forward to a new era in which the old rules and traditions did not apply. He began a wholesale change of GE's corporate culture. He laid off 100,000 out of 440,000 workers, gutted whole layers of bureaucracy, and sold off over 70 GE companies, including air conditioners, house wares, mining interests, semiconductors and consumer electronics. He acquired other companies in the service and communications realm, including NBC. Fortune in 1984 touted him as 'the toughest boss in America'. Within GE he became known as 'Neutron Jack', after the neutron bomb, which allegedly destroyed people but left property intact. But Welch's reorganization of GE had a purpose. Before almost anyone else had done so, Welch had understood how the new information economy was changing the nature of global competition. Wisdom lay 'in changing the institution while it's still winning.' The old GE model was fine for the 1970s, but by the 1990s, he later said, it 'would have been a ticket to the boneyard'. Smashing the old culture was just the first stage of reinventing GE. 'A company can boost productivity by restructuring and downsizing,' said Welch, 'but it cannot sustain high productivity growth without cultural change.' GE employees had to be led to see change as an opportunity, to be met rather than resisted. In 1989, 'Neutron Jack' became 'Workout Jack'. GE's new culture was one in which 'jargon and double-talk and bureaucracy are ridiculed, and candor is demanded'. Managers now organized workers into teams in order to find better ways of doing things, and present their ideas to senior managers who were required to listen even if they did not agree or accept. Welch wanted status and reward to be based upon 'real-world achievement', not a bureaucratic title. He still tolerates labor unions, but feels they are part of a bygone era. Management must now circumvent the unions by empowering and listening to employees. Job security can only be guaranteed says Welch, for those who are educated, globally aware and able to deal in a competitive world. Welch requires his employees to be clear, tough-minded people who could communicate as he did, simply and directly. They have to think several moves ahead and ask questions such as: who will be our global competitors? What will they do? How can we pre-empt them? Complex procedures are to be avoided, as they will only bog GE down. 'I hate bureaucracy', Welch once commented, 'I see what it does to people.' Being quick, nimble and simple was now a matter of life and death in a world where GE had to compete with European, Japanese, Korean and Taiwanese rivals. Welch believes that no one knows what will happen in any economy six months in the future: windows of opportunity open suddenly, and can just as suddenly snap shut. Welch's ultimate vision is that of the 'boundaryless company' in which the barriers between engineering, manufacturing, marketing and customer service will come down. Perhaps nothing epitomizes the Welch style of management better than his attitude to quality. When Welch took over GE, complaints about poor product quality had just cost GE one-sixth of its market share in washing machines and dishwashers in a single year. In his typical earthy manner, Welch described this as 'a consumer punch in the eye that will not go away for maybe a decade.' In 1995, Welch launched the famous Six Sigma quality control program, and by 1997 some 6,000 quality control projects were ongoing in GE. Everyone from Welch down to the lowest employee was involved. Almost half of managerial bonuses were t...