Lessons from Business Legends

Six Sigma and the Quality Revolution at GE

 

 

 

Jack Welch advice business quotes

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.

Jack Welch

GE

 

 

Results achieved over the first two years:

Revenues have risen by 11%

Earnings have increased by 13%

Earnings per share have grown by 14%

Operating margin has risen to a record 16.7%

Working capital turns have risen sharply to 9.2%

 

 

Jack Welch advice business quotes

This is not the program of the month. This is a discipline. This will be forever.

Jack Welch

GE

 

 

The Toughest Stretch Goal

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. "We want 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."

The Biggest Opportunity for Growth

Welch made an official announcement launching the quality initiative at GE's annual gathering of 500 top managers. He called the program "the biggest opportunity for growth, increased profitability, and individual employee satisfaction in the history of our company."

 

 

 

Jack Welch has set itself a goal of becoming a six sigma quality company producing nearly defect-free products, services, and transactions within 5 years.

 

Barriers to successful TQM

 

 

 

Setting Individual Performance Standards

In his letter to all Corporate Executive Council attendees, Jack Welch described what he felt should be the five characteristics of the people who steer the quality program through its rigors:

① Enormous energy and passion for the job a real leader sees it operationally, not as a "staffer."

② Ability to excite, energize, and mobilize organization around six sigma benefits not a bureaucrat.

③ Understands six sigma is all about customers winning in their marketplace and GE bottom line.

④ Has technical grasp of six sigma, which is equal to or bettered by strong financial background and capability.

⑤ Has a real edge to deliver bottom-line results and not just technical solutions.

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25 Lessons from Jack Welch

Articulate Your Vision

Involve Everyone

Make Everybody a Team Player

GE Work-Out

Goals

5 Dimensions of Growth