Creative and innovative management in General Electric cooperation
“Management is doing things right, leadership is doing the right things” (Pascale, 1990)
John Kotter (1996) defined management as number of procedures which can keep the complex interaction between individuals and technology moving efficiently. He identified several phases of this complex interaction, but the most important pieces are considered to be the “planning, budgeting, organising, staffing, controlling, and problem solving”. Similarly, leadership has been defined as “a set of processes that creates organisations in the first place or adapts them to significantly changing circumstances”. Good leadership can help draw a picture for the future, support people with that vision, and motivate them to pass all the obstacles to achieve the targets. Basically, effective management and leadership can lead an organisation to successfully achieve its targets. Leaders are people ‘who inspire with clear vision of how things can be done better’ (Slater, 2001).
As personality traits, leadership and management possess many similarities. Both need a certain level of influence, the ability to work as a team with a variety of people, as well as the skill to set goals and manage them realistically. Nevertheless, these two traits might be considered very different in when looking at different fields of expertise. Though leadership and management have been around for centuries, the actual classification and concept of both leadership and management have only been developed in the last 100 years.
The key functions of managers have been classified by the theorist Henri Fayol (1949) as:
“Planning, organising, commanding, coordinating and controlling”.
Good leadership motivates individuals to perform allocated chores willingly, competently and successfully. Leadership can improve people’s performance at work, thus encouraging them to work harder and achieve high quality results. This increases not only job gratification at personal level, but also productivity at company level. Managers can create a positive and encouraging work atmosphere by making the employees understand their responsibility for the work, as well as their role in planning and control. As such, managers can create a positive outlook in their teams. This sense of responsibility at employee level is required to develop and grow a business.
“Leadership is management job” Deming (1997).
To be a successful manager, one should take into account six important points concerning quality and competence. These include leadership skills as well as management skills, and they are the foundation for each managerial position. The following list contains additional skills which make a good manager:
Building a trusting working environment;
Promoting a creative atmosphere without fear of change;
Ensuring the highest quality results are achieved in order to meet the needs of clients;
Ensuring up to date information is available and making certain clear communication channels are active to support informed decisions;
Ensuring all results and activities are completed within planned financial and time limits, whilst guaranteeing quality;
Utilising the position of influence to persuade and motivate, as well as achieving personal goals. This aspect of self-management is important as a manager is often seen as a ‘role model’.
Types of Leadership Style
Leadership style can be described as:
Autocratic leaders often have the following characteristics:
– Leader makes decisions without reference or consultation with others
– Leader wants to have the final say and considers himself the most important person in any consultation
– Due to the limited consultation, the leader might reduce morale and friendliness among other members of the team
This type of leadership may be effectives in cases where a quick and bold decision is required.
Democratic leaders often have the following characteristics:
– Leader believes in their team and they stimulate others to engage in the decision-making process;
– Leader believes that all employees are responsible for the success of the work, and thus ownership of the work may be emphasised throughout the organisation;
– Leader takes the view of others into account and all relevant parties are consulted before final decision are made
– Leader will try to convince or persuade others of his thoughts when a decision has to be made;
– Leader may help the motivation and general morale in the work place through active involvement of employees;
-Through the leaders’ efforts, the employees have a sense of belonging to the company’s ideas and ambitions;
– Leader helps develop innovative ideas and development within the business.
A paternalistic leader often has the following characteristics:
– The leader considers himself a ‘father figure’ and acts in this manner;
– Leader does not always involve other people in decision-making;
– The leader considers it important to guide and support the staff;
In this case study we will look Jack Welch, a well-known and influential business leader of the 20th century. Mr Welsh was the Chairman and Chief Executive Officer (CEO) of General Electric Co. (GE) and he is considered a very good example of a born leader. During the 41 years he spent working with GE, he helped transform the company into a very successful, productive and thus valuable business. As a CEO, he is renowned for his creative and innovative leadership style.
Jack Welsh commenced his career at GE as a Junior Engineer in 1960, just after receiving a doctorate in chemical engineering from the University of Illinois. Not long after starting work at GE, Mr Welch accepted a different offer from International Minerals and Chemicals, as he was not satisfied with the bureaucracy at GE. However, this plan never materialised as Reuben Geutoff, an executive at GE at the time, convinced him to stay and helped reduce the bureaucracy. As such, Jack Welch remained with GE, and gradually progressed through the company, from head of the plastics division in 1968, to group executive in 1973.
Only twenty years after starting at the company, Mr Welch became the youngest CEO at GE to date. During this time working in this post, the company grew from a relatively small manufacturer of light bulbs and simple electrical appliances, to a multi-billion industrial conglomerate by the turn of the century. Over 900 acquisitions, worth several billion dollars were under his supervision, and made the company several more billion dollars through the sale of part of businesses.
The innovation management process
One of Mr Welch’s most important skills was the fact that he was an intuitive strategist. Intuitive leadership sensitively opens opportunities for personal expansion among high value executives, enabling them to connect with and discover the hidden distinctions of transformational change that exist within themselves. For example:
Implementation – the turning of prospective ideas into a new product or service, or resulting in a change in a process.
Acquiring – the combination of existing as well as new knowledge and insight, both from the organisation itself as from external sources, to find an answer to the problem.
Executing – turning information into a product, which can then be marketed and launched.
Launching – Show the product to the market and ensure acceptance or adoption
Sustaining – Ensuring the use of the project in the longer term
Learning – Using the project cycle to develop, improve and change the manner in which the project is managed
The streategy used by Mr Welch provides an opportunity to reduce unnecessary rules and continually question the development of different rules, as well as implement a new structure or alter the way in which the organisation operates. Such changes may be necessary because the organisation’s circumstances have changed or it is taking on new activities.
Mr Welch was known as a great communicator, skilled at building trust between staff throughout the organisation. At the same time, he was highly competitive. He believed that management should make sure that new ideas are encouraged and that obstackles be removed from product advancement. Companies should create a setting where staff-led initiatives are promoted, and where training and innovation was available to all that worked there. As a result of his competitive edge, Mr Welch believed such innovative projects should be carefully controlled and managed within the company.
Innovative ideas can originate from anywhere in an organisational structure, but it is recognised that developing the “raw idea” to an “implemented idea” needs careful support. Managers should be provided the opportunity to be creative and try out new ideas and concepts (within pre-considered risks). Of course the manager should remain accountable and as such the project should be implemented with consideration for timing and budgets.
Companies should ensure they have the capacity to accurately envisage potential risks and opportunities, and have the ability to act on any necessary changes. As such, they should ensure that their administrative rules provide support to the innovations in the workplace, instead of providing red-tape which may hold back ideas.
It is important for leaders to have vision, authority, but it is more important for them to reach out to individuals all along the chain of command to make sure that everyone feels involved in the process of change. Leaders who don’t do this, and attempt to impose their vision from the top-down instead, might manage to achieve something that looks like their vision, but which is essentially empty.
To persuade stakeholders of the benefits of a creative and innovative idea, one must adopt a variety of approaches to make the ideas appear powerful and compelling. If the ideas you are promoting are congruent with your core beliefs and values, it will be easier to promote them with true passion. Hence, it is important to first consider as to why a particular change or improvement needs to happen, and also how you see this happening. The change will only happen if you truly believe in the results. The following notes can be used for guidance:
1. Get all the facts behind your idea
2. Link humen emotions to the facts supporting your idea
3. Describe your idea and support it by example
4. Create a clear implementation roadmap
7. Be ready for any questions
Mr Welch had a democratic style leadership- he was greater communicator and he shared information with his colleagues and employers. It is considered very important to include the employer in sharing information, as it if often the higher level managers who interact on a face to face level with the customers, and thus they need to have access to all necessary facts. Mr Welch had the ability to make decisions and change the rules and he possessed the has the spirit of competition. This competitive edge helped push the business towards success and his intuitive strategies helped lead the company accomplish a wide set of goals and targets. As a business leader, Jack Welch was able to work in harmony with the larger business entity and his specific business characteristics made him a successful business leader
I recommend that those who want to become great leaders like Jack Welch, build on their charisma. Every leader wants to be an excellent one, and follow in the footsteps of a good example, I believe Jack is very good example to follow.