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Compare Leadership Styles Between Jack Welch and Jeff Immelt essay example
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Compare Leadership Styles Between Jack Welch and Jeff Immelt

This section would introduce some very brief biographies about Jack Welch (former CEO) and Jeffrey Robert Immelt, or Jeff Immelt (the current CEO) of General Electric (GE). GE, a dominating corporation both nationally and globally, has been lead by Jack Welch and Jeffery Immelt for three decades. The impact that these people have had on GE’s businesses and the industries in which they compete has been profound. Many people in the business world have observed and analyzed their styles of leadership. This paper will compare and contrast their leadership styles, emotional intelligence and key skills to success.

John Francis “Jack” Welch, Jr. (born November 19, 1935(1935-11-19)) is an American chemical engineer, businessman and author. He was Chairman and CEO of General Electric (GE) between 1981 and 2001. (for a further information, see Appendix A, Jack Welch) Jeffrey Robert “Jeff” Immelt (born February 19, 1956) is the chairman of the board and CEO of the U. S. -based conglomerate GE. He was selected by GE’s Board of Directors in 2000 to replace Jack Welch following his retirement. Previously, Immelt had headed up GE’s Medical Systems division (now known as GE Healthcare) as its President and CEO.

(for a further information, see Appendix A, Jeff Immelt) There were lots of stories of success about these two leaders, but limited in this paper, we would tell some traits and characteristics that help them become prominent leaders in the world. Furthermore, we also compare and contrast these two leaders to see how effectively each can help GE become one of the biggest companies in the world. In order to see who is the more effective leader we need to compare and contrast them with respect to leadership styles as well as skills they employed in their position of CEO.

The goal of this analysis of these leaders is to give readers see how well effective leaders run their business and the way and styles they used as key factors of success. Jack Welch, Jeff Immelt and GE would be the most outstanding matters in this paper.

2. Who is the more effective leader? Why?

As a matter of fact, evidently and no doubt, Jack Welch had a great dedication to GE, even much more than Jeff Immelt during his career at GE from 1981 to 2001. Regarding effectiveness of leadership, however, it’s really hard to evaluate who is better. It’s really difficult for others to compare with a legend like Jack Welch, but we can make a comparison now since leadership is changing rapidly from time to time.

What did for Jack Welch may not do for Jeff Immelt and even to Jack as well since the time and technologies are changing constantly. Welch believed in magical numbers and he asserted that he is the most successful leader in the world while Immelt emphasized on innovation and renewal. Welch was a very great strategist in the world when he helped GE recover and growth under much of difficulties, and Immelt invested more in R&D with substantial successes.

Welch was a very good hunter for opportunities and also a good manager of risks and threats while Immelt improved what Welch had. As a successful story in business management, application of Six Sigma program in GE was spread over the world as one of the most valuable lessons among businesses in the world relating to quality control. (see Appendix B, Story 1) Above all, Welch was a ruthless taskmaster at GE. Immelt works with long term perspective rather with a short term one.

Immelt proved that he is a very effective leader by helping GE overcome the hardship in 2001 when terrorist attacks on September 11 were a harbinger of bad times to come for GE. (see Appendix B, Story 2) It’s really difficult to say this leader is better than another one. To compare and contrast them, in the range of this paper, in terms of leadership, we would just use leadership styles, traits of emotional intelligence that helped them become top leaders in the world. 2. 1. Leadership styles In the reign of Jack Welch during his 20-year at GE, a new leadership style was introduced and spread companywide.

Welch developed a ranking system that put employees in one of the three categories. The top 20 percent were “stars”, the middle 70 percent were the crucial majority and the bottom 10 percent were weeded out. Through his policy of differentiation, Welch was able to separate those who wished to be stars of the organization and place them into the high producing supervisor position. By doing so, Welch was able to ensure that the stars at GE would be able to assist those in the crucial majority and guarantee that all organization objectives would be met with positive results.

Welch’s definition of leadership concentrates on downsizing, speed, simplicity, self-confidence and stretching that helped him lead GE growth on the right way. (see Reference #4) In the reign of Jeff Immelt from 2001 till now, he is still using the leadership style in the Welch’s way but with some innovation and transformation. Under his own leadership style, Immelt emphasizes on personal responsibility, importance of alignment and time management, trust and understanding people.

(see Reference #5) It could be seen that, Welch employed a stern and ruthless style that was criticized a lot when he decided to downsize 10 percent of workforce who underperformed at any place in GE without giving them another chance to improve. Immelt also employed downsizing as one of the key to success but at a limited level. In respect of business effectiveness, Welch outperformed Immelt since Welch lead GE to one of the biggest companies in the world till 2001 when he retired. In respect of leadership, Immelt outperformed Welch since he is much supported by many people including President Obama.

(see Appendix B, Story 3) With respect to theories of leadership, Welch employed an autocratic but charismatic style while Immelt is using a democratic and charismatic style in managing GE. 2. 2. Emotional Intelligence Self-Awareness It goes without saying that Welch is a great strategist who had a good self-awareness in managing operations and staff at GE. He knows how to control emotions, actions and to send messages out that can affect people around him. Immelt is also a good planner and also a person who is always pursuit innovation and transformation.

In comparison, however, Welch may be better than Immelt during 20 years of CEO at GE since he understood very well how to run a giant like GE. Self-Regulation Both Welch and Immelt has own their self-regulation that helped them to become effective leaders. Both of them are people of high responsibility for work and willing to challenge. To compare, however, in terms of ethics and behaviors, Immelt could be more effective since he refused to accept his $12 million bonus, and he purchased millions of dollars of GE stock when it was declining to demonstrate that he was committed and believed profitability would rise again.

(see Reference #3, GE and Its Naysayers) Motivation Both Welch and Immelt has own their motivation to work constantly. They have extremely high standards for the quality of their work. In comparison, however, Welch is a little bit more motivated leader rather than Immelt. Welch never accept the number two in any competition, it must be the number one. That’s why GE always gets a position of number one and this reflected a high motivation on the way Welch employed. Empathy It is very clear that, regarding empathy, Welch is quite bad due to his ruthless policy while Immelt is somewhat empathetic to people around him.

In respect of effectiveness, however, Welch’s policy seems to be very successful. Immelt is an ideal and ethical leader as he refused to accept his $12 million bonus. In addition, he purchased millions of dollars of GE stock when it was sliding to boost the confidence of stakeholders. Social skills Both Welch and Immelt are very good presenters and communicators, and they know how to send clear messages to their staff and colleagues. Immelt seems to be more effective than Welch due to possessing better social skills. That’s demonstrated why he is selected as a head of economic team by president Obama (see Appendix B, Story 3).

3. What skills did they demonstrate?

It is unfair to compare Immelt with Welch and blame Immelt for all the economic ills during 2008 till now. It is not only the GE which has been affected, but the entire world is adversely affected with economic downturn. However when compared with other global giants, GE still stands taller in economic downturn under the leadership of Jeff Immelt. Building teams Both Welch and Immelt have ability to build competitive teams based on quality.

However, Jack Welch employed a ruthless policy to create robust teams with skilled and well-trained individuals that helped GE a lot in achieving the position of number one. Decisions Jack Welch is a very certain and confident with his final decisions and he always thought that nobody can do better than him. Immelt always makes decisions based on his self-confidence with supports from most of people. Ability to get things done Jack Welch is an uncanny character with his ability to get everything done easily. That’s why he is seen as the most talented leader in the world of businessmen. In this respect, Welch’s influence on the way he lead GE to the top company put cornerstones for Immelt to learn and follow.

4. Conclusion

Jack Welch and Jeffery Immelt have many unique characteristics in their styles of leadership that make them individuals. Both them started their careers at GE and climbed through the rank to become CEO during their mid-forties. Each man also believes heavily in the culture of integrity that GE is known for. On the other hand, both men also believe in downsizing the organization while expanding operations globally.

Each has cut unnecessary management and operations, and they also look for speed and simplicity to the daily practices in the corporation. In contrast, Welch is a very edgy, in your face leader. He demands outstanding effort and is very competitive. Immelt is more laid back than Welch. He believes in hard work, but he is not as confrontational as Welch. Immelt also believes in making GE more digital. Welch relied on hand-written notes and e-mails to get his message across. In the new era of business, Immelt will look to streamline communication within the corporation.

Each CEO has their own style, but ultimately, they are striving to keep GE atop the industries in which it competes. The strategies and attitudes they reflect are similar in some areas and different in others. Jack Welch has had a tremendous impact on GE over his years as CEO. Jeffery Immelt is looking to continue this success through his own practices. With a #1 rating in Fortune magazine, Immelt is well on his way to having a lasting impact on GE.

“I am proud to work at GE, a great American company. Since I joined GE in 1982, GE has earned $230 billion and paid $130 billion in dividends to investors – more than any company worldwide.” – Jeff Immelt. Jeff has to be different from Jack. He requires more creativity and innovation to size up and line up the things efficiently and effectively. It is a tough task to conclude who is the better business leader. What worked for Jack Welch will not work for Jeffery Immelt and probably it may not work for Jack Welch also.

5. Recommendations

To become great leaders like Jack Welch or Jeff Immelt, we need learn not only from theories or your own experience but also from experience of great leaders. It may be the best way for each of us to observe, learn and reflect to be a potential leader in the future.

References

  1. Richard L. Hughes, Robert C. Ginnett, Gordon J. Curphy, 2009, Leadership, Enhancing the Lessons of Experience, 6th Edition, International Edition, McGraw Hill
  2. GE, Jack Welch Biography,
  3. Chief Executive, GE and Its Naysayers,
  4. Churchill Blog, Jack Welch’s Definition of Leadership, < http://www. winston-churchill-leadership. com/welch-definition. html>
  5. Smart Lemming Blog, 10 Keys to Leadership Success by Jeff Immelt, < http://smartlemming.com/2009/05/10-keys-to-leadership-success-by-leadership/>
  6. Kenneth H. Blanchard, The One Minute Manager, Spencer Johnson Appendix A – Biographies Jack Welch Mr. Welch, a native of Salem, Massachusetts, served as Chairman and Chief Executive Officer of General Electric (GE) from 1981-2001.

During his 20 years of leadership in this position, Welch increased the value of the company from $13 billion to several hundred billion. Mr. Welch was born in 1935. He received his B. S. degree in chemical engineering from the University of Massachusetts in 1957 and his M. S. and Ph. D. degrees in chemical engineering from the University of Illinois in 1960. In 1960, Mr. Welch joined GE as a chemical engineer for its Plastics division in Pittsfield, Massachusetts.

He was elected the company’s youngest Vice President in 1972 and was named Vice Chairman in 1979. In December 1980 it was announced that he would succeed Reginald H. Jones, and in April 1981 he became the 8th Chairman and CEO. He served in that position until he retired in September 2001. As CEO of GE, Mr. Welch’s management skills became almost legendary. He had little time for bureaucracy and archaic business ways.

Managers were given free reign as long as they followed the GE ethic of constant change and striving to do better. He ran GE like a small dynamic business able to change as opportunities arose or when a business became unprofitable. GE saw great growth and expansion under Mr. Welch’s leadership. Through streamlining operations, acquiring new businesses, and ensuring that each business under the GE umbrella was one of the best in its field the company was able to expand dramatically from 1981 to 2001. In 1980, the year before Welch became CEO, GE recorded revenues of roughly $26.

8 billion; in 2000, the year before he left, they were nearly $130 billion. The company went from a market value of $14 billion to one of more than $410 billion at the time of his retirement, making it the most valuable and largest company in the world, up from America’s tenth largest by market cap in 1981. In 1999, Fortune named him the “Manager of the Century,” and the Financial Times recently named him one of the three most admired business leaders in the world today. Mr. Welch is a business writer of a widely read weekly column “The Welch Way,” which he writes with his wife, Suzy Welch.

This column appears in BusinessWeek magazine and is published by the New York Times syndicate in more than 45 major newspapers around the world. In 2005, the Welches were the co-authors of Winning, a #1 Wall Street Journal and international bestseller, and its companion volume, Winning: The Answers. In 2001, he wrote his #1 New York Times and also international best-selling autobiography, Jack: Straight from the Gut. Mr. Welch is currently the head of Jack Welch, LLC, where he serves as Special Partner with the private equity firm, Clayton, Dubilier & Rice and is a consultant to IAC (Interactive Corp).

He speaks to business audiences and students around the world and also teaches a leadership course at MIT’s Sloan School of Management. Excerpt from: Jeff Immelt Jeffrey R. Immelt is the ninth chairman of GE, a post he has held since September 7, 2001. Mr. Immelt has held several global leadership positions since coming to GE in 1982, including roles in GE’s Plastics, Appliance, and Medical businesses. In 1989 he became an officer of GE and joined the GE Capital Board in 1997. A couple years later, in 2000, Mr. Immelt was appointed president and chairman-elect. Mr.

Immelt has been named one of the “World’s Best CEOs” three times by Barron’s, and since he began serving as chief executive officer, GE has been named “America’s Most Admired Company” in a poll conducted by Fortune magazine and one of “The World’s Most Respected Companies” in polls by Barron’s and the Financial Times. Mr. Immelt is also a member of The Business Council, and he is on the board of the New York Federal Reserve Bank. Mr. Immelt earned a B. A. degree in applied mathematics from Dartmouth College in 1978 and an M. B. A. from Harvard University in 1982. He and his wife have one daughter. Excerpt from:

General Electric (GE) General Electric Company (GE) was a major conglomerate and one of the biggest companies in the world. One of the factors that was believed to be responsible for the company’s steady growth for more than a century was its tradition of stable and long term leadership. One of the most successful phases in GE’s history began when Jack Welch became its CEO in 1981. Welch attempted to make GE one of the top companies in every segment in which it operated. He also supervised several acquisitions that added value to the business portfolio and was instrumental in creating a performance oriented culture at the company.

Welch retired in 2001 after 20 years at the helm. Appendix B – Stories of Success Story 1 – Jack Welch and Six Sigma Since 1997, GE has used Lean Six Sigma to transform business practices in nearly every industry. Now, you can translate these best practices and expertise to develop common-sense strategies for the healthcare industry. Applying proven techniques of Six Sigma and Lean, healthcare organizations across the United States are transforming their business performance and the quality of patient care in departments throughout their facility.

Excerpt from: Jack Welch was told that Six Sigma, the quality program pioneered by Motorola, could have a profound effect on GE quality. Although skeptical at first, the GE Chairman initiated a huge campaign – in the GE Way, a way that had never been done before – to infuse quality in every corner of the company. Welch called six sigma the most difficult stretch goal GE had ever undertaken. Within four years, “we want to be not just better in quality, but a company 10,000 times better than its competitors,” he announced.

“Wewant to change the competitive landscape by being not just better than our competitors, but by taking quality to a whole new level. We want to make our quality so special, so valuable to our customers, so important to their success that our products become the only real value choice. ” Excerpt from: Story 2 – Jeff Immelt, An Inauspicious Beginning Jeffrey Immelt (Immelt) became the Chief Executive Officer (CEO) of the General Electric Company (GE) on September 7, 2001, drawing to a close one of the longest succession planning programs in corporate America.

Immelt succeeded Jack Welch (Welch), who was generally acknowledged as one of the most successful CEOs in business history for his management of GE in the twenty years he headed the company. On September 11, 2001, just four days after Immelt finally stepped into the job that he had been in training for almost a year, the infamous terrorist attack took place, when hijackers crashed planes into the Pentagon and the twin towers of the World Trade Center. This event shocked the world and left the US economy – already in bad shape from a recession and the bursting of the dotcom bubble in 2000 – battered.

It was an inauspicious beginning for Immelt. As a huge, diversified company, GE had interests in several sensitive industries like aircraft engines, plastics and insurance, which were sure to suffer the after-effects of September 11. The terrorist attacks were a harbinger of bad times to come for GE. As of early 2006, in the four and a half years that he had headed GE, Immelt had had to deal with a series of problems. By 2002, GE’s share price had fallen to levels much below its peak in early 2001, and even by mid 2006, showed no significant improvement. Excerpt from:

Story 3 – Obama appointed GE CEO Jeffrey Immelt as Head of New Economic team Washington – U. S. President Barack Obama is to restructure the economic advisory council which puts emphasis on job creation and CEO of General Electric, Jeffrey Immelt was selected as the new chief to replace Paul Volcker. AP reported the Council recently called President’s Council on Jobs and Competitiveness of Economic Recovery Advisory Board, led by former Federal Reserve Chairman Paul Volcker. Volcker said he was ending his tenure on the panel when the mandate to him, which ended on 6 February.

Signal change in Obama’s intention is to shift the policies designed to stabilize the economy after the financial crisis in 2008 to a strategy that focuses on improving employment opportunities, which may affect the prospects for re-election himself in 2012. The White House said the council’s mission will help generate ideas from the private sector to accelerate economic growth and enhance American competitiveness. This Advisory Council includes government officials and representatives from labor and business. Volcker became a regular adviser at the White House, although the board itself has rarely met with the president.

“Since my campaign to become president, I have relied on advice from Paul Volcker result of our work to restore the worst economic crisis since the Great Depression,” Obama said in a statement Thursday night. “Paul Volcker is not only one of the wisest economic thinkers in our country, he is an individual who for decades fought for policies that help American families and strengthen our economy. ” “I appreciate the friendship and skills over the years, and I will rely on his advice for years to come,” Obama said.

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Immelt himself had joined Obama in Schenectady, NY, Friday to visit the related economic plant with General Electric, where the President will display policies that have helped a multinational conglomerate. GE is a diverse technology, media and financial services company. Immelt, members of the advisory panel of economic recovery, the board announced in an opinion piece Friday in The Washington Post. Promise to add one more person in the company orbiting the White House, highlighting the White House effort to build a strong relationship to the business community.

Earlier this month, Obama will set the trade secretary and JPMorgan Chase’s chief executive, William Daley as his staff. Immelt has become the ally of the White House since the beginning of Obama’s presidency, despite his political contributions tend to be bipartisan, and financially support Hillary Rodham Clinton and Republican John McCain, Rudy Giuliani and Mitt Romney in the 2008 presidential election. But General Electric employees and their partners, to support Obama as a presidential candidate for another at that time.

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