In the 1980s, much of the controversy at GE focused on Welch’s intense leadership style. Welch devoted a great deal of time and energy to trying to get managers at GE to confront one another, to be more open about solving conflicts. One story goes that after a bitter argument in which Welch ripped apart one manager’s ideas, Welch hugged the man for openly engaging in debate and creative conflict.
Welch pushes his values and corporate vision on every level of the organization. All employees are evaluated according to a “3600 Leadership Assessment” form that Jack Welch calls a “values sheet”. The report assigns the employee a rating of 1 to 5, with 5 being outstanding, on a number of performance and value oriented criteria. Welch stresses that the values sheet enables him to target individual personnel problems. So when I go into what we call a Session C in each business, we’ll target Mr. Y or Miss X. And we’ll look at the values sheet. People are removed for having the wrong values. Integrity violations clearly are the worst ones. We don’t talk about the numbers are.
Welch wants people to focus on tasks, to bring a higher level of intensity to their jobs. He believes that such intensity is one of the keys to being successful competitor – to achieving his goal of making GE number one and number two in every industry segment in which the company is engaged. But he also knows that managing relationships is equally important that managers accomplish tasks through people. In short, he has made team management the means for GE’s future success.
Welch believes that GE needed drastic changes to survive in the global marketplace. Incremental change doesn’t work very well in the type of transformation GE has gone through. If your change isn’t big enough revolutionary enough the bureaucracy can beat you. When get leaders who confuse popularity with leadership who just nibble away at things, nothing changes.
The Ohio State and University of Michigan Studies:
Tannenbaum and Schmidt, along with other early researchers, thought leadership style was a “zero sum” game. The more task oriented a manager the less relationship oriented he or she could be. Subsequent research was undertaken to determine which of these two leadership styles produces the most effective group performance.
At Ohio State University researchers studied the effectiveness of what they called initiating structure (task oriented) and consideration (employee-oriented) leadership behaviors, They found, as might be expected , that employee turnover rates were lowest and employee satisfaction highest under leaders who were rated high in consideration. Conversely leaders who were rated low in consideration and high in initiating structure had high grievance and turnover rates among their employees. Figure diagrams the leadership styles studied at Ohio State. Interestingly the researchers also found that employees’ ratings of their leaders’ effectiveness depended not so much on the particular style of the leader as on the situation in which the style was used. For example, Air Force commanders who rated high on consideration were rated as less effective than task oriented commanders. It is possible that the more authoritarian environment of the military coupled with the air crews belief that quick, hard decisions are essential is combat situations, caused people oriented leaders to be rated less effective. On the other hand, non-production supervisors and managers in large companies were rated more effective if they ranked high in consideration.
Leadership expectations differ globally as well, even in the military. In 1956 the Egyptian army was routed by the much smaller Israeli army, even though the Egyptians were better positioned geographically. An analysis of the confrontation revealed that the Israeli army was built on what might be called Theory Y values: Soldiers were treated and taught to treat others humanely, hierarchy played a greatly reduced role, cross-communications flourished, coordination was high, and intra organizational rivalries were at a minimum. Because all were working for the end goals the job of the high command was leadership not direction.
Researchers at the University of Michigan found a different result. They distinguished between production centered and employees centered managers. Production centered managers set rigid work standards, organized tasks down to the last detail, prescribed work methods to be followed, and closely supervised employees’ work. Employee centered managers encouraged employee participation in goal setting and other work decisions and helped ensure high performance by inspiring trust and respect. The Michigan studies found that the most productive work groups tended to have leaders who were employee-centered rather than production-centered. They also found that the most effective leaders had supportive relationships with their employees, tended to depend on group rather than individual decision making and encouraged employees to set and achieve high performance goals.