Unformatted text preview: and services. Only businesses that were no.1 or
no.2 in their industry were allowed in the circles and every business outside the circles was later
fixed, sold or closed.
His vision stemmed from the top-of-market concept and one of the fundamental principles of his
vision was exemplified in the No.1/No.2 approach. Welch¶s first four years were marked by
divesture of businesses that were failing to come up to his standards. During this time he sold off
one-fifth of GE¶s asset base and cut the workforce by more than 18 percent.
Many consider his fast paced layoffs as a darker side of his leadership qualities. Whenever, the
numbers suggested it, people were laid off at GE. His requirements from individual units were
also quite severe. He expected each division to:
y Be No.1 or No.2 in its respective market.
Maintain substantially above average ROI
Possess a competitive advantage
Leverage existing strengths at GE such as technology, capital intensity and management
expertise. His reputation earned him the nick name ³Neutron Jack´, as whichever building he ³hit´ people
perceived the building was left intact whereas...
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- Winter '11
- Jack Welch