Why and how Jack Welch has tried to make business as simple as possible for the approximately 300,000 employees at General Electric In many ways, Jack Welch was a true revolutionary in the field of business – not only because he significantly restructured one of the world’s biggest and oldest companies but also because he recognized the external changes that would affect businesses before other people did. Welch’s philosophy was founded on the notion that business is simple, and so should be organizations and corporations. For him, ‘simple’ did not mean basic or elementary bur rather straightforward, unambiguous, and clear. Welch believed that the speed and efficiency of production could only be improved in an uncluttered and orderly work environment. However, the more than a century-long history of General Electric hindered progress because of the corporate bureaucracy that was created over the years and remained largely unchallenged before Welch came to the company. This leviathan-like organization needed to adapt to the changing market realities as the company entered a new era. For Welch, it meant a fundamental, rather than incremental, overhaul of the company’s structure and processes, with the hope of increasing General Electric’s productivity. Among the first changes implemented by Welch was a reduction of the company’s workforce, or destaffing, when more than 70,000 employees left General Electric. It was a consequence of Welch’s restructuring of the company’s hierarchy as he attempted to reduce the number of different divisions and departments within the corporation. Essentially, he managed to bring this number down to fourteen. This simplification allowed us to eliminate previously existing communication filters and barriers and to reduce the associated paperwork. It also allowed for open rather than formal communication favored by Welch because it increased the speed and efficiency of the decision-making process. Similar changes affected other employees in non-managerial positions. The divisions between different internal functions were intentionally blurred to achieve the so-called “integrated diversity”. This approach allowed for a smoother transfer of knowledge and human resources across departments. Welch also introduced the custom of holding regular “Work-Outs” in the late 1980s. Work-Outs are essentially a three-day-long semi-structured brainstorming session. They bring together several groups of employees from different divisions and positions to discuss operational and other issues. These people not only have the first-hand knowledge of the company’s everyday operations but also offer different perspectives on the same process or system. These sessions gave employees a forum to voice their opinions and directly participate in the management of the company while also improving its efficiency. Welch also encouraged knowledge exchange with other successful companies in the industry through case study analysis of best practices. This approach allowed the company to identify the weaknesses in how it managed its operations. The findings of these studies directly affected the everyday activities of General Electric employees, ranging from inventory management to manufacturing practices.