From Jack Welch’s new book, entitled ‘Jack’, we’ve taken exerts from his chapter ‘What this CEO thing is all about.’
INTEGRITY
By maintaining integrity. Establishing it and never wavering from it supported everything I did through good and bad times. People may not have agreed with me on every issue � and I may not have been right all the time � but they always knew they were getting it straight and honest.
THE CORPORATION AND THE COMMUNITY
I believe social responsibility begins with a strong, competitive company. Only a healthy enterprise can improve and enrich the lives of people and their communities.
SETTING A TONE
The organisation takes it’s cue from the person on the top. I always told our business leaders their personal intensity determined their organisation’s intensity. How hard they worked and how many people they touched would be emulated thousands of times over.
MAXIMISING AN ORGANISATION’S INTELLECT
Getting every employee’s mind into the game is a huge part of what the CEO job is all about. Taking everyone’s best ideas and transferring them to others is the secret. There’s nothing more important.
PEOPLE FIRST, STRATEGY SECOND
Getting the right people in the right jobs is a lot more important that developing a strategy‌ We learned the hard way that we could have the greatest strategies in the world. Without the right leaders developing and owning them, we’d get good-looking presentations and so-so results.
INFORMALITY
Bureaucracy strangles. Informality liberates. Creating an informal atmosphere is a competitive advantage‌ It’s about making sure everybody counts � and everybody knows they count‌ Passion, chemistry, and idea flow from any level at any place are what matter. Everybody’s welcome and expected to go at it.
SELF-CONFIDENCE
Arrogance is a killer, and wearing ambition on one’s sleeve can have the same effect. There is a fine line between arrogance and self-confidence‌. The true test of self-confidence is the courage to be open � to welcome change and new ideas regardless of their source.
PASSION
If there’s one characteristic all winners share, it’s that they care more than anyone else. No detail is too small to sweat or too large to dream‌ I doesn’t mean loud or flamboyant. It’s something that comes from deep inside.
STRETCH
Stretch is reaching for more than what you thought possible.
CELEBRATIONS
Business has to be fun. For too many people, it’s ‚just a job.‛ I always found celebrations were a great way to energise an organisation. From my first day in plastics, I was always looking for ways to celebrate even the smallest victories.
ALIGNING REWARDS WITH MEASUREMENTS
You have to get this one right‌ What you measure is what you get, what you reward is what you get‌ By not aligning measurements and rewards, you often get what you’re not looking for.
DIFFERENTIATION DEVELOPS GREAT ORGANISATIONS
No one likes to play God and rank people, especially the bottom 10 percent. Differentiation is as tough an issue as any manager faces‌ Year after year, forcing managers to week out their worst performers was the best antidote for bureaucracy‌ Differentiation is hard. Anybody who finds it easy doesn’t belong in the organisation, and anyone who can’t do it falls into the same category.
OWNING THE PEOPLE
We always told our business leaders, ‚You own the businesses. You’re renting the people‌ Our business CEO’s knew they would be rewarded for teeing up high potentials. Our boundary-less culture changed the game from hoarding your best people to sharing your best.
APPRAISALS ALL THE TIME
Appraisals to me where like breathing. In a meritocracy, nothing is more important. I was giving appraisals all the time � whether I handed out a stock option grant or gave a raise � or even when I’d bump into someone in the hallway.
CULTURE COUNTS
An organisation that truly believes in maximising intellect can’t have multiple cultures‌ In our shop, there’s only one currency: GE stock with GE values‌ When it comes to personal style and pay, our culture will bend, but we won’t break it.
STRATEGY
Business success is less a function of grandiose predictions than it is a result of being able to respond rapidly to real changes as they occur. That’s why strategy has to be dynamic and anticipatory.
COMPETITORS
Two ‘truths’ I’ve learned to challenge over time dealt with competition.
One old chestnut is, ‚We’re losing market share because our competitors are crazy, and they’re giving the product away.‛ The real truth was that a competitor had a better cost position or a strategic rationale for what it did.
The other beauty goes something like this: A team comes in with a proposal to leapfrog the current position of its leading competitor. The implicit assumption is the competition will be sleeping while we’re developing the new product. Doesn’t usually happen that way.
‌ Never underestimate the other guy.
THE FIELD
I never really felt headquarters was the place to be, and becoming CEO reinforced my point of view‌. I’d spend at least a third of my time with GE businesses‌. I have no idea how much time CEO’s should spend in the field. I do know I fought everyday to get my butt out of the office.
MARKETS VS MIND-SETS
When we asked each business to redefine its market so they could have no more that a 10 percent share, what looked like mature markets became growth opportunities.
INITIATIVES VS TACTICS
In 20 years, we really had only four initiatives � Globilisation, Services, Six Sigma and E-business. Initiatives live forever. They create fundamental change in a company. They build on one another. Everything in the GE operating system reinforces them‌. On the other hand, short-term tactical moves are needed to revitalize and energise a function or company.
THE COMMUNICATOR
I was an outrageous champion of everything we did � from our early need to face reality and change the culture, to our major initiatives that reshaped the company. Whenever I had an idea or message I wanted to drive into the organisation, I could never say it enough. I repeated it over and over and over, at every meeting and review, for years, until I could almost gag on the words.
EMPLOYEE SURVEYS
We didn’t ask about the quality of cafeteria food or the benefit plans. We asked questions that got fundamental issues around the theme: ‚Is the company you read about in the annual report, the company you work for?‛
We showed the results not only to our employees, but also to our board members and to the security analysts.
Knowing – and confronting – what was on the minds of our employees was a key part of our success.
THE ADVERTISING MANAGER
Managing image and company reputation is one of the more obvious jobs of a CEO. I might have taken it to an extreme. I never allowed one advertisement on the air that I didn’t like.
Image mattered. I was convinced it was my job.
MANAGING LOOSE, MANAGING TIGHT
Knowing when to meddle and when to let go was a pure gut decision. A lot of this is pure instinct. I managed tight when I sensed I could make a difference. I managed loose when I knew I had little if anything to offer.
Consistency was not a requirement here. Sometimes being an undisciplined, unmade bed got the job done faster. You pick and you choose your opportunities to make a difference. I loved to go on the field when I thought I could play, and I loved cheering from the sidelines when I didn’t think I belonged in the game.
CHART MAKER
I’ve always thought that chart-making clarified my thinking better than anything else. Reducing a complex problem to a simple chart excited the hell out of me.
I loved doing charts and got so much out of them. The crazy thing about it was that we always felt the last presentation was our ‚best one ever.‛
INVESTOR RELATIONS
Wall Street is a big part of the job. We changed who we put into investor relations. We always had good people, but the old model was a career-ending job for financial types‌
The job went from defensive linebacker to offensive halfback. All those who held the job got up every morning and felt they were measured by the price of GE stock. The position went from dead-end assignment to one of the most sought after.
WALLOWING
‚Let’s wallow in this‛ was a phrase I often used. It meant getting people together, often spontaneously, to wrestle through a complex issue. The sole ticket for admission was know-how, not titles or position. From wallowing came some of our best decisions.
It was all about breaking down the concept of hierarchy. Everyone knew they were equal partners at the table, where their ideas could be thrown out with informality and candor.
YOUR BACK ROOM IS SOMEBODY ELSE’S FRONT ROOM
Don’t own a cafeteria: Let a food company do it. Don’t run a print shop: Let a printing company do that. It’s understanding where your real value added is and putting your best people and resources behind that.
Back rooms by definition will never be able to attract your best. We converted ours into someone else’s front room and insisted on their best. This is what outsourcing is all about.
SPEED
I learned in a hundred ways that I rarely regretted acting, but often regretted not acting fast enough. I could scarcely remember a time when I said, ‚I wish I’d taken six more months to study something before making a decision.‛
When I asked myself, ‘How many times should I have held off on a decision?’ Versus ‘How many times do I wish I’d made that move faster?’, I inevitably found that the latter won almost every time.
FORGET THE ZEROS
In a big company, what’s small tends to get lost. As businesses and companies grow, their size can become an inhibitor rather than an enabler. The disadvantage of size � the difficult communications, the layers, and the lack of informality � all work against the creation of an energized atmosphere. The entrepreneurial benefits of being small � agility, speed, and ease of communication � are often lost in a big company.
I came to the CEO job knowing that isolating small projects and keeping them out of mainstream was the way to grow.
We were aware of what size meant. The worst thing a company can do with size is to focus on ‚managing‛ it. Size either liberates or paralyzes. We tried every day to remember that the benefit of size was that it allowed us to take more swings.
‘Jack’ by Jack Welch can be purchased online from Exclusive Books (aprox R384.00 Hard cover) and Amazon.com (approx $17.97 Hard cover)