Quality Magazine

From the Publisher: Welch is on Target

March 1, 2005

Does former General Electric CEO Jack Welch fall in the same category as other chief executives who are lauded as great leaders, only to later have their accolades shown as more hype than reality? I always have been reluctant to believe the praises heaped on Welch. He has acknowledged that at the time he served as CEO, it was a good time to be in charge of a company. The stock market was good, people were confident in their jobs, there was no recession and money was being spent.

Welch grew GE to a global company, acquired key companies and built the financial services division. He turned GE from a $13 billion to a $500 billion company during his tenure through, among other strategies, embracing and implementing Six Sigma within the company. He has a reputation for being plain-spoken and a straight-shooter. But is this good PR from his bookseller? No.

I had the opportunity to hear Welch speak at the Six Sigma Summit in Miami, FL, Jan. 25 to 26. The 60-minute Q&A session focused primarily on GE's use of Six Sigma. "View from the Top," on p. 80 of this issue, carries many details from that interview. I was particularly struck by his contention that for Six Sigma to be truly effective and successful, it can't be left in the hands of quality professionals and used solely as a quality tool.

On first hearing those statements, I was shocked. After all, the quality community is responsible for Six Sigma, is at home in the statistical world that measures Six Sigma project results and has long championed this tool against naysayers. Was Welch denying the role of quality in Six Sigma or putting down quality and quality professionals? No.

Welch recognizes what many quality professionals have been saying for years: that a company can be successful if it embraces quality as a part of its entire culture and not leave it to a few people in the lab. Welch believes Six Sigma cuts across all barriers at a company and can develop true leaders. These leaders have quality practices, i.e., reducing scrap and rework, improving product and productivity, and reducing warranty costs as a regular part of their day and lexicon. They eat and breathe it without even realizing it.

Welch rewarded successful leaders, most who became successful by using Six Sigma to improve profit margins and customer relationships. He issued stock options, promotions and other rewards. It was a controversial practice but it made quality practices pay off. Why not reward, in substantive ways, those who go beyond internal metrics and make quality benefit a company by increasing profits and bolstering the bottom line? It's a fair way to measure a quality practice.

Welch is controversial. Whether you agree or disagree with him, Welch is honest. And, for those who have championed quality as an integral part of company practices that permeate all aspects of company culture, Welch is a refreshing ally. I believe his reputation as a "straight-shooter" is well-deserved and not simply a PR concoction for his book, which, by the way, I'll soon be purchasing.

What do you think about Jack Welch and his approach? How can quality effectively permeate corporate culture? Write me with your views and ideas at williamst@bnpmedia.com.

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