I have worked for many large global organizations, but none have influenced my management style as much as GE. I was honoured to work for 2 Welch-trained GE CEOs eager to share their experience and wisdom. It would take hundreds of pages to write down the entirety of the Welch management strategy, but here are some of the most salient points that resonate with me.

This theory focuses on creating a culture of accountability and responsibility within an organization, which can help ensure everyone is working towards the same goals. Welch's management theory has been credited with helping to turn around struggling companies, and it can be applied to businesses of all sizes.

Welch's management theory is based on the idea that three key elements must be in place for a company to succeed: people, strategy, and structure.

  1. People are the most important part of any organization, and they must be managed in a way that motivates them to do their best work.

  2. The right strategy must be in place to ensure the company is heading in the right direction.

  3. The organizational structure must be designed to support the people and strategy.

Welch believes a company can achieve greatness when all three elements are in place.

Some of his key principles include:

  • Change is good; don't be afraid of it. Jack believed that "the only constant in business is change." He believed everything was constantly in flux and that if you didn't constantly change and improve, a competitor would gain a leadership position and force you to change when you aren't prepared or die. His mantra to his leaders was always, "Do it yourself, or someone else will force you to do it."

  • Lead a company, don't micro-manage. Jack abhorred organizations where managers performed a limited supervisory function and barked orders to the employees. He demanded that his leaders act as leaders and not managers. He said managing complicates the running of the organization and thus slows everything down to a crawl. He expected his leaders to be embedded with the teams so they could understand the full work process and truly understand the business. The leaders had to be capable of performing the work. This meant the leaders gained the employees' trust and could therefore motivate & inspire.

  • Hire the right leaders. Jack believed hiring the right people was the ultimate secret to his success. He demanded that his leaders share his vision, be extremely energetic and possess the ability to enthuse the employees by properly communicating a powerful vision. He demanded that his leaders be able to create, constantly refine and enthusiastically communicate the vision to supercharge the employees.

  • Hire leaders with strong business acumen who can leverage that knowledge to build strategic advantages. Too often, managers ignore inconvenient truths (such as market conditions, competitive landscape, espionage, etc.). Jack believed that leaders that could constantly re-evaluate the "real" conditions, who had the right knowledge and were empowered to make quick changes, could supercharge profitability. A business, product or service that is profitable today may no longer be profitable tomorrow. A leader that recognizes the change early can shift business strategy (before competitors) and build an entirely new asset that can help the business stay profitable or even grow (at the expense of slow competitors).

  • Leaders need to be laser-focused, consistent and reliably follow-up. Jack believed in constantly reinventing his businesses to deliver new ideas, improve the customer experience, consistently become the industry's quality benchmark and empower his people. This continual churn forced the organization to be constantly in flux and required leaders who could reliably follow up on the thousands of moving parts with little supervision. This required detail-oriented leaders that were committed to delivery.

Many claim that Jack was lucky. They claim that his methods were brutal and couldn't be the source of GE's success. The truth is he ran a growing, profitable, lean organization that is now the benchmark of good management. In his 20-year reign of GE, its revenue increased from $26.8 billion in 1981 to $130 billion in 2001. The company's market value also rose from $12 billion to $410 billion during that period.

Keywords: strategy, management, change, vision, hiring, business acumen, focus, consistency.