Within two years after becoming chief executive of General Electric in 1981, Jack Welch completed one of his most far-reaching initiatives: reducing the number of GE business units from about 150 to 15. In effect, Welch set out to focus the company on the businesses where it had the potential for greatness, and to jettison everything else. That was the point of his famous requirement that every business had to be No. 1 or No. 2 in its market; he also insisted that every business provide value no competitor could match, and that they all should be able to gain leverage from GE’s distinctive strength in complex, engineering-intensive industrial enterprises — or they wouldn’t fit. Welch articulated both what GE did well, and what it would not do at all: a critical challenge for all large companies, especially conglomerates.
The Coherent Conglomerate
Within two years after becoming chief executive of General Electric in 1981, Jack Welch completed one of his most far-reaching initiatives: reducing the number of GE business units from about 150 to 15. In effect, Welch set out to focus the company on the businesses where it had the potential for greatness, and to jettison […]
June 12, 2012
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Accelerate your career with Harvard ManageMentor®. HBR Learning’s online leadership training helps you hone your skills with courses like Strategy Planning and Execution. Earn badges to share on LinkedIn and your resume. Access more than 40 courses trusted by Fortune 500 companies.
How to develop a winning strategy—and put it to work.