Discover GE's evolution from aggressive Six Sigma leadership under Jack Welch to Larry Culp's transformative lean management approach. A comprehensive analysis for executives.
General Electric's leadership philosophy has undergone one of the most dramatic transformations in corporate history. From the aggressive, performance-driven culture of Jack Welch's era to Larry Culp's revolutionary lean management approach, GE's leadership evolution mirrors the broader shift in modern business thinking. Today's GE Aerospace represents a masterclass in how industrial giants can reinvent themselves through deliberate leadership transformation.
The question "What leadership style does General Electric use?" doesn't have a simple answer—because GE has fundamentally redefined what leadership means in the modern era. Under current CEO Larry Culp's guidance, the company has embraced a lean leadership model centred on continuous improvement, respect for people, and systematic problem-solving. This represents a seismic shift from the company's previous incarnations and offers valuable lessons for executives navigating today's complex business environment.
To understand GE's current leadership approach, one must first examine its storied past. Jack Welch, who served as CEO from 1981 to 2001, embodied a hard-driving, results-oriented leadership style that earned him both acclaim and criticism. His approach was characterised by several key elements:
Welch was initially criticised for cost-cutting and layoffs, which earned him the moniker "Neutron Jack," but as GE's revenues expanded and its share price soared in the ensuing years, he was lauded. His leadership style was built on three fundamental pillars:
General Electric launched its Leadership, Innovation, and Growth (LIG) program to support CEO Jeffrey Immelt's priority of achieving corporate growth primarily by expanding businesses and creating new ones. The famous Crotonville management development centre became the epicentre of GE's leadership philosophy, producing executives who would spread GE's methods across corporate America.
However, in a move that reverberated across the business world, General Electric announced the sale of its famed Crotonville leadership development center, marking the end of an era and signaling a shift in how organizations perceive and approach leader development.
Jeffrey Immelt's tenure represented a bridge between the old and new GE. When former CEO Jeff Immelt left GE in 2017, the company faced the challenge of adjusting its focus to better compete in volatile, uncertain, complex, and ambiguous (VUCA) conditions.
Immelt's leadership approach included:
Yet despite these efforts, when news of Immelt's departure hit the air-waves, GE stock, which had been down nearly 10% YTD (and over 50% in the past year), spiked by more than 5%, indicating shareholders believed more transformational change was needed.
The appointment of Larry Culp as CEO in 2018 marked a watershed moment in GE's history. Larry joined the GE Board of Directors in April 2018, and was appointed CEO of GE in October 2018... He was the first outsider to take the reins at GE in its 129-year history.
Perhaps the most important initiative Larry Culp announced when he joined GE as chairman and CEO was introducing the concept of lean management and putting it into action. His approach represents a fundamental departure from traditional command-and-control leadership:
Core Philosophy: "I know of no other way to run a business than through lean principles," he said. This philosophy can be distilled into one overarching principle: continuous improvement, known in Japanese as "kaizen."
Larry Culp introduces "FLIGHT DECK," GE Aerospace's proprietary lean operating model. He emphasizes the strategic importance of this model, outlining its role in aligning the company's operations with customer expectations, improving efficiency, and driving sustainable results.
The FLIGHT DECK model encompasses ten fundamental principles divided into two categories:
Enterprise Fundamentals:
Individual Fundamentals:
One of the most significant philosophical shifts under Culp's leadership is the explicit prioritisation hierarchy embodied in the SQDC mantra. Under his leadership, GE further focused the company's portfolio and simultaneously improved operations across its businesses by implementing and adopting lean with a relentless focus on safety, quality, delivery, and cost—in that order—to better serve customers.
This represents a stark contrast to the financial-first mentality that often characterised previous eras. Larry emphasized, "our Lean mantra of SQDC that has really been at the heart of the Lean transformation of GE, let alone GE Aerospace." "Safety and Quality before Delivery and Cost. Easy to say. Hard to do."
Perhaps the most visible manifestation of GE's leadership transformation is Culp's hands-on approach to management. The photo shared at the end of the letter is not a corporate headshot of Larry in a power suit and tie. It's a photo from a "gemba" (or factory floor) with him wearing safety glasses, a casual shirt, and a high-visibility vest.
Larry participates in kaizen events (as described in this recent FORTUNE article), which sets a great example for other leaders. These multi-day improvement events have yielded remarkable results:
CEO Larry Culp saying that "a problem-solving culture is far more effective operationally than a finger-pointing culture". This philosophical shift represents one of the most profound changes in GE's leadership approach.
"Culture can't be declared," says Farah Borges, who oversees GE Aerospace's assembly, test and maintenance operations. "You have to build it."
Unlike the often impersonal metrics-driven approaches of the past, Culp's leadership style emphasises the human dimension of business performance. "It really comes back to respect for people, one of the most important tenets of any Lean transformation," Larry then threw to a video with one of their engineering leaders.
This respect manifests in several ways:
Specifically, Larry had his leaders install a system that allows front line workers to solve their problems on an hourly basis. This represents a fundamental shift from top-down decision-making to distributed problem-solving capability.
Finally, Larry's leaders very actively see their jobs as coaches, building the problem solving muscles of each and every person within their sphere of influence. This coaching approach stands in sharp contrast to the directive leadership styles of previous eras.
The lean leadership transformation has yielded tangible results across multiple dimensions:
During his tenure, GE strengthened its balance sheet, reduced debt by more than $100 billion, grew profit by 20%, more than doubled adjusted earnings-per-share, and more than quadrupled its market capitalization.
Since the first quarter of 2024, the manufacturer has more than doubled the weekly supply of nozzle baffles to GE Aerospace and increased deliveries of all parts by more than 80%.
Recognising that operational excellence extends beyond company boundaries, Recognizing that over 80% of their delivery challenges originate from the supply chain, GE Aerospace has extended the principles of Flight Deck to its suppliers.
Culp's approach bears striking resemblance to the methodical precision that characterised Britain's finest military and exploration traditions. Just as Admiral Nelson's success at Trafalgar stemmed from detailed preparation and empowering his captains to make tactical decisions, Culp's lean leadership distributes decision-making authority whilst maintaining strategic alignment.
The FLIGHT DECK model echoes the systematic approach that enabled British explorers like Ernest Shackleton to navigate extreme adversity through meticulous planning and unwavering commitment to crew welfare. Shackleton's famous advertisement—"Men wanted for hazardous journey"—resonates with GE's current approach of transparency about challenges whilst building collective capability to overcome them.
| Aspect | Welch Era (1981-2001) | Culp Era (2018-Present) |
|---|---|---|
| Decision Making | Top-down, centralised | Distributed, gemba-based |
| Performance Focus | Financial metrics first | SQDC prioritisation |
| Employee Development | Rank and yank | Coaching and capability building |
| Problem Solving | Finger-pointing culture | Systematic root cause analysis |
| Improvement Approach | Big bang transformations | Continuous incremental improvement |
| Leadership Style | Command and control | Servant leadership |
GE's transformation offers several critical insights for contemporary business leaders:
The FLIGHT DECK model demonstrates the power of systematic approaches to business challenges. Rather than relying on individual heroics or periodic restructuring, successful modern leadership requires building systems that enable consistent performance improvement.
"Lean is not a short-term fix; it is a long-term journey". Culp's approach emphasises building organisational capabilities that compound over time, rather than seeking quick wins that may compromise long-term sustainability.
The gemba approach represents more than symbolic leadership—it's about understanding value creation at its source. Modern executives must resist the gravitational pull of conference rooms and PowerPoint presentations in favour of understanding how work actually gets accomplished.
"Any Lean journey really begins with us as leaders of our organization". The most successful modern leaders focus on building organisational learning capabilities rather than simply making decisions.
GE's leadership transformation has implications that extend far beyond the company itself. Larry Culp is arguably the first "Lean" CEO to deliberately use Lean management as a turn-around strategy for an American Fortune 100 company.
The success of GE's transformation is likely to influence leadership approaches across industrial sectors. Companies facing similar challenges of legacy systems, complex supply chains, and demanding performance requirements are closely watching GE's playbook.
The closure of Crotonville serves as a wake-up call, and with companies such as 3M and Boeing also in the midst of selling leadership campuses, it further highlights the inadequacies of 20th century conventional leadership development methods.
The shift towards digitally-enabled, real-time leadership development reflects broader changes in how organisations build leadership capability.
Despite its successes, GE's lean leadership approach faces several ongoing challenges:
Changing deeply embedded cultural patterns requires sustained effort. "Factory floor visits aren't a radical idea for an industrial company, but GE didn't always do them this way. The company used to place more emphasis on polishing a PowerPoint presentation than on drilling into the details of manufacturing workflows".
Implementing lean principles across a global organisation with thousands of suppliers and complex customer relationships requires extraordinary coordination and persistence.
Balancing long-term capability building with short-term performance expectations remains an ongoing challenge, particularly in public markets that often reward quarterly results over sustainable transformation.
General Electric's leadership evolution from Jack Welch's aggressive performance culture to Larry Culp's lean transformation represents one of the most significant corporate leadership transitions in modern business history. The company's current approach—characterised by systematic thinking, respect for people, continuous improvement, and gemba-based leadership—offers a compelling model for executives seeking to build resilient, adaptable organisations.
Building on a century of learning and carrying forth GE's legacy of innovation, GE Aerospace moves forward with a strong balance sheet and greater focus to invent the future of flight, lift people up, and bring them home safely.
The success of this transformation suggests that the future belongs to leaders who can combine strategic vision with operational excellence, financial discipline with human development, and systematic thinking with adaptive capability. As other organisations grapple with similar challenges of transformation and modernisation, GE's journey provides both inspiration and practical guidance for the leadership approaches required in an increasingly complex business environment.
The question is no longer what leadership style GE uses, but rather how other organisations can adapt these proven principles to their own unique circumstances and challenges.
What is GE's current leadership philosophy? GE's leadership philosophy is built around lean management principles, emphasising continuous improvement (kaizen), respect for people, and systematic problem-solving. The FLIGHT DECK operating model provides the framework for how leaders operate at all levels of the organisation.
How has GE's leadership style changed since Jack Welch? The transformation has been dramatic—from Welch's top-down, performance-driven approach to Culp's collaborative, improvement-focused model. The shift includes moving from "rank and yank" to coaching, from finger-pointing to problem-solving, and from quarterly heroics to systematic capability building.
What is the FLIGHT DECK operating model? FLIGHT DECK is GE Aerospace's proprietary lean operating system built on ten fundamental principles. It emphasises safety, quality, delivery, and cost (in that order) while focusing on continuous improvement, value stream management, and customer-driven approaches.
How does Larry Culp lead differently from previous GE CEOs? Culp practices "gemba" leadership, spending time on factory floors rather than in boardrooms. He emphasises coaching over commanding, systematic problem-solving over quick fixes, and building organisational capability over individual performance metrics.
What results has GE achieved through its leadership transformation? Under Culp's leadership, GE has reduced debt by over $100 billion, quadrupled market capitalisation, and achieved significant operational improvements including 170% capacity increases in some areas and 85% reductions in assembly time through kaizen events.
Can other companies replicate GE's leadership approach? While the specific model may vary, the underlying principles—systematic thinking, continuous improvement, respect for people, and gemba-based leadership—are adaptable to various industries and organisational contexts. The key is sustained commitment to transformation rather than quick fixes.
What role does employee development play in GE's current leadership model? Employee development is central to GE's approach, focusing on building problem-solving capabilities at all levels rather than just managing performance. Leaders act as coaches, helping team members develop the skills needed for continuous improvement and adaptation.