GE and Jack Welch Leadership Case Study

GE and Jack Welch Leadership and Entrepreneurship Case Study

John Francis Welch Jr. better known as Jack Welch needs no introduction as a successful entrepreneur and leader. Jack Welch took a company and transformed it into a world-class performer and the most admired one too. Jack Welch was the the CEO from 1981 to September 2001 of General Electric Corporation (GE) . When Jack Welch handed over control of GE, GE was operating in over 100 countries with about 340,000 employees and $130 billion in annual revenues.

GE entered into diversified businesses ranging from aircraft engines to medical diagnostics, from lighting to appliances, from nuclear power to broadcasting (GE owns NBC) and from plastics to financial services. Most of these businesses were added to GE through almost 1000 odd acquisitions made when Jack Welch was its CEO.

More on Jack Welch’s Principles follows….

Anti-Bureaucracy

“If you’re not No. 1 or 2 in your field, get out.” This statement by Jack Welch sums up his business philosophy. Jack made GE follow this principle by operating it like a small business in spite of its size. …to be continued.

What is a case study?

Managing a Global Organization : Merger and Consolidation

Managing a Global Organization during Merger and Consolidation

The foremost challenge for IT management teams as they develop and manage a global organization via merger and consolidation is to make certain the production teams of the merged entities keep up their present business at standard service levels.

Typically, when mergers occur the operations/production teams find it difficult to match customer defined service level agreements all through standard business conditions. The disruptions related to merger and consolidation actions imply that IT managers will find they are now faced with managing issues such as degrading productivity arising out of organizational differences, employee fears, differing cultures, time zones and challenging timelines for combining the merged entities into a single global operations entity.

It is critical for IT managers to guarantee they maintain focus on their customers’ needs, while establishing good relationships/partnerships with the freshly merged operations’ entities. Success comes from the top management and other management teams striving right away to reach out to employees of the combined merged organization to correspond to them their value to the team and the overall single global entity.

Employees within the combined IT organizations must recognize their value and role in building the new IT organization. Knowledge of how the employees will add value to the final organization will supply the buy-in they need to focus on matching their customers’ expectations, while aiding a better IT organization utilizing the best practices from the two merged IT companies.

HR Practices – Human Capital Index Study

HR Practices – Human Capital Index Study

A Human Capital Index study was conducted twice (1999 and 2001) by Watson Wyatt, a global human-capital consulting firm to understand the correlation between how organisations manage their human capital and its effect on their financial performance. The Human Capital Index study included analysing HR practices and financial performance of 750 companies across Canada, Europe and US. The Human Capital Index research was done twice to correlate the results.

Human Capital Index research involved evaluating HR practices and financial performance of 750 companies across Canada, Europe and US.

Key findings of the study:

$ Three times higher share holder returns for organisations with superior HR practices
$ Good HR practices result in positive financial performance to a much great extent as compared to what good financial performance do to effective HR practices
$ Certain traditional HR practices like 360-degree appraisal or developmental training if not conducted well can harmfully change an organisation’s financial performance

HR practices that in fact steer financial performance based on data from 51 companies surveyed included:

Total 43 HR practices were mostly divided into 6 general groups

Five groups of HR practices in which a significant improvement can lead to as much as 47% increase in market value. The sixth group that can reduce stakeholder value.

The Human Capital Index study clearly showed that better HR practices are no more a sanitation factor. HR practices are vital factors that decide an organisation’s performance.

Additional Reading:

1. “Human Capital Index: Human Capital As a lead Indicator of Shareholder Value”, Watson Wyatt Publication.
2. “The Hidden Human resources: Shareholder Value”, by Pfau B., Kay I., Optimize Magazine June 2002.
3. “How HR Drives Profits”, by Caudron S., Workforce Magazine.

Oprah Winfrey – Leadership and Entrepreneurship Case Study

Oprah Winfrey – Leadership and Entrepreneurship Case Study

Oprah Winfrey’s skills as an entrepreneur are noteworthy. Oprah Winfrey is the Chairman of the Harpo group of companies. Oprah is a top television talk show host. How Oprah became one of the richest women and a successful entrpreneur in the world along with leadership qualities. Oprah’s Harpo group entrered into various businesses and Oprah’s role in each of them was excellent. Oprah’s philanthropic ventures are varied and liked by many.

Facts about Oprah Winfrey
Oprah’s original name was Orpah Gail Winfrey.
Orpah Gail Winfrey is named after the Moabite woman in the Book of Ruth in the Bible
She became Oprah after Orpah was misspelt in her school records.
Oprah parents: Vernon Winfrey and Vernita Lee
Oprah was born on January 29, 1954.
Oprah was born in Kosciusko (Mississippi, US)
Oprah is ranked as the most powerful celebrity by Forbes magazine
Oprah is the ninth most powerful woman in the world.
Oprah Winfrey is believed to be worth over $1.3 billion.
Talk Show queen, Oprah Winfreys Web site is Oprah.com
Oprah publishes the O magazine

Oprah’s public speaking and leadership skills were evident in Oprah right from her early days. Oprah recited sermons from the Bible at her local church when she was less than four years old.

In 2002 Oprah formed a partnership with South Africa’s Ministry of Education to build the “Oprah Winfrey Leadership Academy for Girls”

Oprah’s Angel Network donated $1 million to help tsunami efforts. The Angel Network’s funds are pooled for emergency relief, such as that required by tsunami. Oprah also likes to use these funds to enhance other countries by focusing efforts on education, women and children.

Also read leadership case study on Warren Buffet

Six Sigma Implementation Strategies

Six Sigma Implementation Strategies

  1. Begin with Lean Sigma: Begin with Lean Sigma if company requires quick implementation because most successful companies grow out of Six Sigma or Lean in parallel.
  2. Begin small: The best way to exhibit the value of implementing Six Sigma formally is to begin with a few small projects and uphold their success.
  3. Using Six Sigma consultants to implement Six Sigma or provide Six Sigma training depends on the costs and how well the consultants understand the company before trying to implement Six Sigma.
  4. DMAIC (Design, Measure, Analyze, Improve, Control) must be used to give Six Sigma projects the go ahead and prompt early enthusiasm and success.
  5. Design for Six Sigma (DFSS) and Define Measure Analyze Design Verify (DMADV) must be used when a total revamp or restructuring is required for a failed or nonexistent process. DFSS and DMADV are best for future state designs without considering what is happening today.

Supply Chain Strategies to save costs

Supply Chain Strategies to save costs

Outsourcing supply chain functions can enhance:

• Cost reduction (10-20%)
• Efficiency
• Customer satisfaction
• Revenues and
• Competitiveness.

One manufacturer was able to reduce its inventories by USD 1 billion, cut down on inventory holding costs by USD 124 million and reduce delivery times to dealers by 26%.

Major areas where supply chain costs need to be reduced are:

• Order management costs: By combining order management and parcel traceable programs
• Material purchasing costs: Reverse Auctions
• Inventory holding costs: Less than 10 percent of total supply chain costs
• Overall supply chain costs including Supply chain planning costs, and supply chain IT savings

Poka Yoke – Mistake proofing

What is Poka Yoke?

Poka Yoke is Japanese methodology for “mistake proofing” to avoid non-conformities from entering into processes. It allows defect detection and elimination at the source. It can also be used as a continuous improvement tool.

In short, Poka Yoke is a methodology that ensures that Quality Management Systems (QMS) perform efficiently.

Poka Yoke – History

Mr Shigeo Shingo devised the concept of Poka Yoke in the 1980s. He was one of the pioneers in the development of the Toyota production system. This apart, he also initiated developments in many Japanese organisations.

Leadership Best Practices

Best Practices in Leadership

Leadership is defined as the abilities and the activities of the leaders in the company to inspire a culture of Business Excellence in achieving the objectives of the company.

Some leadership best practices in leadership that are clearly visible:

  • Rewarding performers not only on their financial results, but various other factors. To assess performance, many companies used the Balanced ScoreCard method, developed by Kaplan and Norton
  • Top management meet often to discuss methods to improve their business performance
  • Meetings and surveys are conducted at regular intervals to include employees in decision-making for company strategy and policies
  • Understanding that recognition by peers is an important motivation, the best leaders showed recognition to their performing employees through different methods, such as commendation letters, putting their names on the company’s intranet newsletters, commending in the presence of people respected by the performers and giving small gifts. Formal procedures were also in place in some companies for such assessment and rewarding of performance
  • Putting in place a system that allows employees to work on improvement besides providing them the needed resources. In addition facilitators who work with the employees on personal improvement programmes were engaged
  • Involvement of top management in setting up Customer Relationship management as well as Supplier Relationship Managements through initiatives such as interactive meetings, two-way visits between the company and the suppliers and customers. The Efficient Consumer Response (ECR) approach was introduced by top-notch companies to build a closer relationship throughout the entire supply chain.

Wal-Mart’s Supply Chain Management Practices

Wal-Mart’s Supply Chain Management Practices

Managing the Supply Chain
Wal-Mart has been able to achieve respectable leadership in the retail industry because of its focus on supply chain management. The use of innovative information technology tools had benefited Wal-Mart’s supply chain management.

Procurement and Distribution

Logistics Management

Inventory Management

Additional Reading

  1. “Cross docking: The move from supply to demand”, by Christine Rowat
  2. “Cross Docking and Cross Docking Network Design”, www.tli.isye.gatech.edu
  3. “Warehouse Evolution: High Tech Developments Get Industry Cooking”, Plants, sites and parks magazine, www.bizsites.com
  4. “Cross-docking in the U.K,” Siemens Dematic, www.siemensdematic.com.au, 2001.
  5. Cross docking delivers for Retail”, www.spscommerce.com
  6. “Value Chain Report- Warehouse Management Systems Add Value,” www.industryweek.com, www.iwvaluechain.com
  7. “Digital Age warehousing,” Penton Media, www.industryweek.com
  8. “Distribution strategies, Supply Chain analysis at Volkswagen of America,” www.eng.auburn.edu
  9. “It’s not only the retail side, Wal-Mart Distribution”, www.Wal-Martwatch.com
  10. “Stauffer V Wal-Mart stores, Inc., www.oalj.dol.gov
  11. “The Management of Business Logistics: A Supply Chain Prospective,” www.house.gov
  12. “Thrify Wal-Mart Partner for Flat Rate Rental Plan,” Auto Rental News, www.autorentalnews.com
  13. “Trans-loading, Cross docking,” www.commoditylogistics.com
  14. “Wal-Mart.com: The Physical giant goes Virtual,” Red Herring Magazine, www.redherring.com
  15. “Voluntary retail chains and the threats and opportunities of European Integration,” www.snee.org
  16. “What is cross docking?, The Warehouse Word, www.colofwhousing.com.au
  17. “Wholesale Distribution, Managing complex supply chain requirements in the foodservice industry,” wholesaledistribution.services.ibm.com
  18. “Supply Chain Management the Wal-Mart Way,” Supply Chain and Logistics Journal, www.infochain.org

Wal-Mart and The Salvation Army Partner

Will Wal-Mart be able to sustain its supply chain advantage? Download Case Study on Wal-Mart’s Supply Chain Practices in PDF format.

Backsourcing – JPMorgan and IBM – Outsourcing

Backsourcing – JPMorgan and IBM – Outsourcing

Have a backsourcing plan before outsourcing

When JPMorgan Chase signed a seven year USD 5 billion outsourcing contract with IBM in December 2002, it was touted as the largest outsourcing arrangement ever made. JP Morgan was the second largest financial services company in the US at that time in terms of net assets. The arrangement was to shift a major part of JPMorgan’s IT services infrastructure which included data centers, help desks and data and voice networks to IBM. Part of the arrangement was also to transfer 4000 IT employees to IBM. JPMorgan wanted to utilise IBM’s OnDemand capability.

Preliminary transfer started in April 2003 and was completed in January 2004. It was estimated that the major work on securing data centers, improving hardware and setting up a common networking infrastructure would take minimum two years to complete.

However, by July 2004, JPMorgan merged with consumer banking business leader, Bank One. Total combined assets of the merged entity were valued at USD 1.1 trillion. The deal was aimed at reducing JPMorgan’s dependence on investment banking.

Bank One believed it could manage technology in-house and was well experienced at integrating systems from acquired businesses. As a result, in August 2004, the agreement with IBM was called off citing that it could manage it mission critical technological infrastructure better with its improved capabilities, tools and processes now. A decision to rehire all 4000 employees was also taken. JPMorgan in all likelihood had to pay IBM millions for terminating the deal.

Such bringing of IT functions back in-house after they have been outsourced is known as BackSourcing. The backsourcing decision had negative consequences. There was poor morale and the loss of employee trust. Most experts felt that bringing IT back in-house was a good decision. Nevertheless, it was a costly and complex move. The time spent in first preparing the organisation for the outsourcing and then restructuring again to bring the IT work back in-house was a colossal waste. Most IT related projects and day-to-day activities almost came to a standstill. Lack of IT services was a serious problem. Technology was not updated and new projects were not scheduled. JPMorgan’s management gave the same reasons for the backsourcing decision that they had given when signing the outsourcing deal with IBM. This made some employees confused and resentful. Morale was at an all time low.

If outsourcing is a complex decision to make, most organisations fear taking a backsourcing decision for its disruptions. A recent survey by Deloitte indicates that more than 25 percent of companies are unhappy with their outsourcing decisions and have considered backsouring. Seventy percent of top executives interviewed expressed negative experiences with outsourcing. However, organisations should plan and assess how they will be able to take back their IT operations or other outsourced services beforehand. Even before outsourcing them in the first place. JPMorgan’s saga with IBM is an example for any organisation contemplating an outsourcing deal. The following set of best practices will make the outsourcing or backsourcing journey much easier.

Best Practices to BackSourcing

Inform beforehand

When the backsourcing course of action is decided upon, the outsourcer should be alerted beforehand. This helps promote a cooperative atmosphere as well as conform to any contractual commitments as well.

Adequate documentation

Documenting operational audits and requirements analysis helps avoid any failure to meet the expectations and results in the best outsourcing scenario.

Plan and Schedule

A sound backsourcing plan and schedule should:
• Incorporate clauses to make sure that all assets are returned properly
• Ensure support to the company staff for a specific time period until the company can reassume full operational control to its satisfaction.

Quick Reassignment of employees

Promptly decide upon employee reassignment and responsibilities. This minimises uncertainty and associated productivity and motivation concerns.

Security Policy and Procedures

To protect key information relevant security procedures need to be established. For example, password protection and new software installation procedures can be documented. Any annoyed former employee should not be able to access crucial data or cause system shutdown.

Business Continuity

The course of action for any unforeseen occurrences during the switch should be planned for and be included as part of the backsourcing plan.

Ask the following questions before making the decision.

• What particular state of affairs or likely events will be responsible for ending a relationship?
• What are the penalties for termination? Which parties will incur them?
• How will the companies manage the backsourced operations?

Some outsourcers charge customers for services previously not defined in the contract. The contract between JPMorgan and IBM also was ambiguous. IBM could charge for something that was not previously being done within the bank before the deal began. If the customer is unwilling to pay, such extra but often essential improvements can have an adverse impact on IT. Such outsourcing deals can be bad in terms of IT innovation and efficiency. Such considerations must be accounted for.

JPMorgan’s and IBM’s experience stands out as an example to any organisation contemplating an outsourcing or backsourcing possibilities. Even with JPMorgan’s earlier claim on the value of backsourcing, the bank does more offshore outsourcing in India. I hope that it has planned better this time and will in future.

«‹ 11 12 13 14›