Jack Welch - A Simple Leader of Genius Essay Example | Topics and Well Written Essays - 2000 words

Jack Welch - A Simple Leader of Genius - Essay Example The custodial concept shows employees' orientation on money. It is known that one of the manager's needs is security, which is provided by using this concept, the result of which is simple passive cooperation. The supportive and collegial theories also take their place, main principles of them being orientation on support and self-discipline respectively. But getting to know Jack Welch closer one becomes sure that this person used none of these theories, having created his own one, which turned the top managers of the global companies into talented and oriented leaders. Jack F. Welch became a CEO in General Electric when he was 45, thus being the youngest manager of such level at the time. He spent his entire career with G.E., and with this company he has developed his concept of ever-continuous development of the company. In the late 1970's it was already becoming apparent, that the G.E. Corporation was facing a state of being a victim of the global economy. National companies were losing their consumers, because foreign companies produced better goods for lower prices, and this was accepted by Welch as a very important sign. In his work he used the idea of all businesses being No.1 or No. 2 in their area, otherwise they were to be "fixed, closed or sold" (Tichy and Sherman, 16). He sold $12 billion of low profit businesses and bought $26 billion of highly profitable ones, thus allowing the profits and sales to increase from $1.5 billion in 1980 to $5.2 billion in 1993. Welch has created a whole leadership philosophy, due to which G.E. has acquired the strongest balance sheet. Jack Welch was not simply a successful CEO - he was and is an undisputed all-time champion of the corporate leadership. When Welch became a CEO, G.E. had a great number of problems, which were long-lasting and could become invisible for most of the top managers. First of all, the earnings of the company grew too slowly, capital expenditures were too high, thus making the capital flow slow as well, productivity growth was no more than 1-2% per year. He also noted that management was taking decisions too slowly, the company was overfilled with bureaucracy and he felt that in order to keep the company flowing, he must bring it through the most radical changes that have ever been accomplished in it. He has formulated the six rules of management, which are so unique and universal at the same time that could be used not only in managing a company, but almost in every sphere of human life. 1. Control your destiny, or someone else will. According to this principle the employees must control their destiny themselves, that is, Welch gave them some kind of freedom in taking decisions. He strongly believed that this would make companies successful, opening talents and capabilities of workers. Now we are constantly amazed by how much people