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2012, May 18

After Jack Welch: Inside the Post-Crisis GE

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After Jack Welch: Inside the Post-Crisis GE

by Knowledge@SMU, 16 April 2010
topics:
Human Capital Management Management
tags:
appraisal system GE Jack Welch leadership management style

It has been almost a decade since Jack Welch retired as GE’s chairman and CEO, but the legacy and methods of one of the biggest names in corporate America is still widely talked about, even revered. Welch, arguably one of the most recognisable modern day management chieftains, was instrumental in propelling GE’s product lines, including aircraft engines and medical equipment, to market leaders in their respective sectors. Welch achieved the practically unparalleled feat of growing the conglomerate’s profit by nearly 30 times during his two-decade reign.

 
But while Welch’s unorthodox methods were hailed as game-changing, not everyone was fond of his approach. For one, the ‘rank-and-yank’ system of firing employees who were given the lowest grading in regular reviews has gained notoriety far and wide. Under Jeff Immelt, Welch’s hand-picked successor, who took over as chairman and CEO in 2001, some things like how GE manages and grooms its employees have changed.
 
Yet, others, like certain core performance parameters and qualities embodying the GE way of running businesses, have not. At a recent Wee Kim Wee Centre CEO talk held at Singapore Management University, Ed Ng, president and CEO of GE Capital South East Asia, the company’s financing unit, shared insights on some of these changes, as well as on GE’s human capital development culture.
 
“I’m sure many of you now would pause before you consider working for a leader like Jack because he has such a tough reputation. But under Jeff Immelt’s open leadership, you would consider, right? Because that’s the way things are now. We have evolved,” he said.
 
The changes, according to Ng, included his own management style too. “In a large matrix organisation like GE where I have many stakeholders and people below me have many stakeholder responsibilities, you have to manage the ‘winds’ and get to your objective like a sailboat. I used to be like a bulldozer, but the military’s command-and-control way just results in unnecessary casualties.”
 
‘I don’t know’
Before making his mark in the corporate world, Ng practiced the art of leadership in a decidedly different environment. Awarded a scholarship by the Singapore Armed Forces, he was a soldier for 15 years, rising to the rank of a lieutenant-colonel and the position of a brigade commander.
After he put away his uniform, Ng earned his MBA from Harvard, and joined GE for the first time in 1993, where he rose to become president and country manager of GE Capital Philippines and Singapore.
 
He rejoined GE in 2007, with Immelt already at the helm. For the seven years in-between, Ng was president of Reed Exhibitions, organiser of high-profile international events, like the Asian Aerospace. Ng was also a top-level executive with CapitaLand, one of the largest developers in the region, where he helped drive asset securitisation strategy.
 
Having experienced both Welch’s and Immelt’s leadership styles, Ng said that GE’s culture has evolved to become more open. For instance, the younger generation of employees, in particular, will more readily share with their bosses what they think are problems and integrity violations within the company. This, in turn, has somewhat affected the attitude at the top. “Gone are the days of leaders who know it all. Gone also are the days of the dismissive and confrontational leadership styles.”
 
New company leaders are also more open and inclusive. “Recently, at an employee event in Singapore, our Chairman, Jeff Immelt, when asked what was one of the greatest lessons he had learnt from the recent global crisis, replied he was more prepared to say ‘I don’t know’ more often. As such, I think it is okay for leaders to say ‘I am not certain’ and I appreciate a manager who can come up to me and admit ‘I don’t know’,” said Ng. 
  
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