John Francis “Jack” Welch, Jr, was born in Peabody, Massachusetts, US on the 19th of November, 1935. [1] He studied chemical engineering, graduating from the University of Massachusetts Amherst with a Bachelor of Science degree in 1957 [2] and from the University of Illinois with a Master’s degree and a PhD in chemical engineering (in 1960).[3] [4] Jack Welch started off in the General Electric company from working as a chemical engineer in 1960 at a salary of $10,500, becoming through the years the chairman and the youngest CEO of GE from 1981 to 2001. During his leadership, the company’s value grew by 4,000 %. In 2006, his net worth was estimated at $720 million, his “walk away” package from GE was estimated at $420 million by GMI Ratings. …show more content…
Of the 112,000 who left the payroll, 37,000 were in businesses that GE sold, and 81,000 were reduced in continuing businesses. In return, GE had increased its market capital tremendously. Welch reduced basic research, and closed off businesses that were …show more content…
He got the right people on the bus, keeping them motivated and continuously engaged, by rewarding his 20 % with bonuses and stock options, he got the wrong people off the bus by firing the bottom 10 % of his managers and the right people in the right seats and then they figured out where to drive it, as the vision was already set. Collins says it’s easier to change direction later if you already focused on the “who” first, because these people are on the bus because of who else is on the bus. Welch’s top 20 % and the middle 70 % were kept motivated as the bottom 10 % were being fired every year, hence everyone was doing their jobs. Jim Collins explains in his book that it’s very important not to focus on the “what” , as the people will focus on the direction the bus will take and it will become harder to change direction later. Jim Collins also underlines the fact that people are not the most important asset in a company, and that the right people are the most important