Jack Welch Biography

Jack Welch was born November 19, 1935 in Peabody, Massachusetts. His Father, John Welch was a Railroad conductor and his mother, Grace, was a homemaker. Welch is Irish American, as both his paternal and maternal grandparents were Irish.

Welch attended the Salem High School and was active in many sports, including Football and Hockey. He was accepted to the University of Massachusetts Amherst late in his senior year where he studied Chemical Engineering. Welch worked at Sunoco and PPG Industries as a chemical engineer, while attending college, during the summer and graduated in 1957 with Bachelor of Science degree in Chemical Engineering.

Welch turned down many offers from some leading chemical corporations in order to attend graduate school at the University of Illinois, graduating in 1960 with a Master’s Degree as well as a PhD in chemical engineering.

After graduating, Welch worked as a Chemical engineer for General Electric Corporation, eventually working his way up to become Chairman and CEO.

Under the leadership of Welch, GE increased its market value from $12 billion to almost $300 Billion, during which time he started a policy that allowed all employees to have a small business experience at large corporation.

One of Welch’s philosophies was that a company should be number one or number two. If it wasn’t it didn’t have a reason for being open. He closed factories and made many payroll cuts in order to enhance GE’s profitability and take it to that number one position.

One of Welches policies, which has since been adopted by many other corporations, was is often called the “rank and yank”. Every year, he would fire the bottom 10% of his managers, regardless of how they performed on their jobs. He would then reward the top 20% with stock options and other bonuses.

Welch is also responsible for putting stocks into employee’s hands, instead of just top executives, with about one third of employees holding stock options in GE today. Many corporations have since followed his lead and offer stock options to employees, regardless of their position.

In his book, “Jack: Straight from the Gut”, Welch tells the story of how GE went from 411, 000 employees in 1980 to 299,000 in 1985, while increasing General Electric’s market value exponentially. He reduced much of the basic researching offices and sold off or closed any offshoot that was not performing well.

During his years with GE, Welch earned the nickname Neutron Jack, after the Neutron Bomb, as he would complete clean out a business (by firing all the employees) while leaving the business itself intact.

Upon retiring in 2001 from his Chairman position at GE in 2001, Welch has written a best-selling memoir titled “Jack, Straight from the Gut”, in which Welch explains many of the strategies he used in GE to take it where it is today.

One of these strategies which he discusses in detail is called the “Differentiation Vitality Curve” and has been called the “Rank and Yank” by many.

This is the basic philosophy that a company is made up of the top 20% who are “A” players, the middle 70%, which are the B players and the bottom 10% is made up of the C players.

Every year, Welch got rid of the bottom 10%, thus creating an atmosphere of only A and B players. In his book Welch expressed how this was easy to do in the first year, but much harder in subsequent years as each year there are more A players and B players and eventually very few C players.

While some may disagree with this strategy (and there are many who do), everyone will have to agree that, under Jacks command, General Electric grew in leaps and bounds, to become one of the leading corporations in the world.

In 2006, he gave his name to Sacred Heart University’s College of Business, known as John F Welch College of Business and he has been teaching classes at MIT Sloan School of Management. He continues to consult with Fortune 500 Businesses across the world.

There is little doubt in anybody’s mind that Jack Welch was an exceptional manager and leader, with ideas and skills that were decades before their time, he helped propel a once fledgling corporation to one of the most successful corporations in existence today and his ideas and philosophies are admired and often imitated by corporate leaders worldwide.