Jack Welch, former CEO of General Electric who oversaw the company’s enormous growth under a strategy that focused on rooting out bureaucratic inefficiencies, died late yesterday. He was 84.
CNBC first reported Welch’s death earlier today. His wife, Suzy, confirmed the news to CNBC and cited renal failure as the cause of death.
Welch’s legacy is a contradictory one. On the one hand, he’s known largely for his business savviness—GE grew from $4 billion to $410 billion under his leadership, according to CNBC. In a nod to his success, Fortune Magazine gave him the title, “Manager of the Century” in 1999. Welch also helped launch CNBC in 1989.
But Welch is also remembered for his relentless cost cutting, earning him the nickname “Neutron Jack.” In a constant push to improve the efficiency of his company, Welch cut tens of thousands of jobs during his time at GE’s helm.
Welch’s strategy was built upon a system called “Six Sigma,” which he adopted from Motorola in the mid-1990s. Named for a statistical model, Six Sigma was created as a way to eliminate defects in manufacturing. Applying the system’s ideas to the GE conglomerate, Welch bought and sold businesses to ensure that the entire portfolio was made up of companies that had a significant competitive advantage. Welch’s book, Jack: Straight From the Gut, describes a strategy in which he sorts managers into different tiers to eliminate the underperforming cogs from the machine.
The downside to the strategy, according to critics, is that it fails to incentivize innovation. And as the economy shifted to reward more disruptive technologies in the mid-aughts, the Six Sigma system largely fell out of style.
Welch left GE in 2001, before the tables turned on his strategy. Following his departure from the company, Welch became a business consultant and commentator, and opened a for-profit management institute.
“Today is a sad day for the entire GE family,” company chairman and CEO H. Lawrence Culp Jr. said in a statement. “Jack was larger than life and the heart of GE for half a century. He reshaped the face of our company and the business world.”
Just before the 2012 presidential election, Welch set off a firestorm on Twitter after suggesting that the Obama administration had manipulated a jobs report. Speaking later with the Wall Street Journal, he told the newspaper that he “wasn’t kidding.”
Welch is survived by his wife, Suzy, and four children from his first marriage. A funeral service will be held at New York’s St. Patrick’s Cathedral. A date has not yet been set.