Abstract

General Electric's Jack Welch is widely recognized as the modern role model for excellence in business leadership. Under his leadership, GE became recognized for having one of the world's top industrial statistics groups, although it has never had a strong corporate quality function. That doesn't mean Welch didn't appreciate quality as a business improvement methodology. He recognized the value of quality and the need for personal commitment to quality, but he also believed that quality was driven at the operating level of the company, not from the central office. Welch's approach to business improvement has gone through three cycles. In the first cycle, he focused GE on the elimination of nonperforming business units as determined by market performance. In the second cycle, the company simplified and eliminated nonvalue-added activities. In 1995 Welch discovered Six Sigma and initiated the third phase of discovery focused on the elimination of variation from already lean business operations to promote gains in productivity and financial performance. He considered variation an evil in any customer-touching process. Six Sigma focused his management team on eliminating the common cause variation found in business and work processes. It prepares the business to be a reliable organization that produces the right product through value-added processes that consistently perform as designed to deliver the value that has been demanded by customers and markets. Six Sigma training is now a prerequisite for promotion to any professional or managerial position in GE. By embedding Six Sigma into the performance evaluation process and linking it to the reward system, Welch ensured that he would gain and hold the attention of his management team.