Posted on 03/02/2020 6:01:00 AM PST by Enlightened1
Jack Welch, a railroad conductor’s son who became chairman and CEO of General Electric and led it for two decades, growing its market value from $12 billion to $410 billion, has died. He was 84.
His death was announced Monday by his wife, Suzy.
With a determination to win by busting up bureaucratic complacency, Welch earned two titles — “manager of the century,” and “Neutron Jack” for slashing tens of thousands of jobs. Under his leadership, GE became the world’s most valuable company, after Microsoft. Its fortunes later turned south.
While at the helm, Welch bought and sold scores of businesses, expanding the industrial giant into financial services and consulting. GE Capital Bank was founded seven years into his tenure. His acquisitions included RCA — then-owner of NBC — and Kidder Peabody, the brokerage that became entangled in an insider trading scandal.
He also streamlined the conglomerate’s bloated bureaucracy by giving managers free rein to make changes they deemed beneficial to the bottom line.
He invented the “vitality curve,” in which managers were ranked into three groups. The top 20% “A” group was “filled with passion, committed to making things happen.” The “vital” 70% “B” group was essential to the company and encouraged to join the A’s. Then there was the bottom 10% “C” group. “The underperformers generally had to go,” Welch said in his 2001 book, “Jack: Straight From the Gut.”
(Excerpt) Read more at cnbc.com ...
RIP
RIP Neutron Jack.
Whoops, wrong year. 1993 was the merger year. 1995 was when Martin Marietta and Lockheed Missiles & Space merged.
A towering business figure in his day. His family and friends have my sympathy.
He invented the “vitality curve,” in which managers were ranked into three groups. The top 20% “A” group was “filled with passion, committed to making things happen.” The “vital” 70% “B” group was essential to the company and encouraged to join the A’s. Then there was the bottom 10% “C” group. “The underperformers generally had to go,” Welch said in his 2001 book, “Jack: Straight From the Gut.”
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So he only applied the rule to managers to cut bureaucracy? I think a lot companies applied it to non-managers to lower costs and get rid of those who didn’t brown nose their manager.
I hate the vitality curve concept. You can build a team of high achievers. Great people. Smart, energetic, dedicated people. Wonderful team. Guess what? 10% of your team is required to be designated as LOSERS who need to be fired and replaced. Every year.
GE is in much poorer shape today, not even close to the company that once had the largest market cap.
Oh Lordy, some big mouth in the media will use Welch’s death to figure out a way to fabricate another market melt down. (just kidding, but if it was remotely possible, they’d do it)
The article said Welch only applied it to managers to cut bureaucracy. Other than that, I hate it, too.
Word on the street was that Welch wanted RCA just to get NBC and always planned to strip mine the defense business and sell off the empty husk, which is what happened.
Neutron Jack came from the old adage that when Jack comes to your plant after he leaves all the buildings are still there but the people are gone.
Neil Caputo (sic) is devastated.
It’s normal for large businesses to rise and fall.
RIP Jack.
Maybe, but when my company started hiring a bunch of GE six sigma dorks, guess who they applied it to? They even did it with yearly raises. 15% of each managers reports got zilch. It very much became all about sucking up.
WIKI-—In early 2002, Suzy Welch was forced to resign from the Harvard Business Review after admitting to an affair with the then-married Jack Welch, while preparing an interview with him for the magazine.
The affair was brought to the attention of the Review by Jane Welch, Welch’s wife at the time. Jack Welch divorced his first wife to marry Jane Welch.
Welch then divorced Jane and married Suzy Welch. Suzy Welch had the interview pulled before it appeared in the Business Review.
Welch started her career as a reporter with the Miami Herald and then with the Associated Press. After business school, she worked for several years at Bain & Company (Mitt Romney’s company), a management consulting firm based in Boston.
She was later named editor-in-chief of the Harvard Business Review. She has written a novel, and authored and edited numerous books and articles dealing with leadership, organizational change, and human resource management.
“I hate the vitality curve concept.”
Same here, and I see it within my own Dept. You have a team that excels as a team. But if you artificially take a razor blade to them as individuals and rank them by minutia, you’ll have a bottom 10%. They are still excellent individuals and fully contribute to the team. It’s counter productive.
RIH
Mr. Welch was the picture=perfect, the epitome of a CEO.
Sorry to see this man gone.
RIP, my good man.
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