Up or out
August 26, 2008
Jack Welch was Chairman and CEO of General Electric from 1981 and 2001. In his time he gained a reputation for his business acumen and innovative leadership strategies at GE. One of his most radical decisions was in radically changing the value chain of the company by setting high standards and redesigning the business culture. The first step in doing this was to make each of GE’s businesses Number 1 or 2 in the industry; if it couldn’t be done then he got rid of the business.
He reasoned: “When you’re number four or five in a market, when number one sneezes, you get pneumonia. When you’re number one, you control your destiny.”
During this process he sold roughly 200 businesses however he spent $21 billion to acquire 370 businesses which strengthened the company with higher quality and unparalleled performers.
