Session 12: Jack Welch

Said to be the most studied CEO of the 20th century, Jack Welch began his 41-year career with the General Electric Company in 1960, and in 1981 became the company’s eighth chairman and CEO. Fortune named him “manager of the century,” and the Financial Times named him one of the three most admired business leaders in the world. He teaches at MIT’s Sloan School of Management and recently launched the Jack Welch Management Institute at Chancellor University, offering advanced management degrees online. A prolific business writer, he authored the internationally best-selling autobiography, Jack: Straight from the Gut and also wrote The Welch Way, a widely read BusinessWeek column.

Leader to Leader: Bill Hybels and Jack Welch (Interview)

  • Making a company informal is important
  • Did you think about that in hiring people? If I see this I will hire you?
    • Yes, but you don’t always see it.
  • I’ve never heard another leader talk more about energy than you
    • You’ve got to energize people around you. If you’re full of energy, jumping around, it doesn’t do anything, but if you get a vision, and you get people to follow it, then it will work.
  • You walk into a room, you’re gonna hold a meeting, you’re saying “I’ve gotta energize these people.” How do you do it?
    • I went to a call center in Phoenix, I was in this room with these people.
    • 10 hours later we came out. I wanted them to understand our mission. I had to engage them, I had to excite them. Their job was not to hustle people to join, but to tell their story to engage people to join. We stayed there until we all got on the same page.
  • Energizing is not hyping them?
    • It is basically getting them to feel this vision. Getting them to feel where you are going.
  • Unless the leader the feels the fire, it is pretty hard to pass it on.
    • This call center makes 80 calls a day.
    • You have to excite them about what they are talking about. Show them how lives have been changed. Get them excited about the journey.
  • When you walked into that room, did you have mapped out how that day was going to go?
    • I had no idea. I had never met with a call center group.
    • I didn’t know what to expect, but I knew what I had to do. I had to get them to tell a story.
    • I had no plan whatsoever.
    • Most meetings if they are any good, are going to have engagement. Raise the intellectual level in the room. There is so much time wasted on powerpoint slides and junk.
  • At certain points during that day you saw in people’s eyes that this was working. As a leader when you’re making that connection are you saying, “lets ride this as long as we can”?
    • Absolutely.
    • You work and work until you get everyone.
    • In that setting it worked to let them role model. Let them voice their experiences with what worked, and what didn’t work.
  • How did you end that day?
    • I asked them to go around the room and tell me what they got out of the session.
    • Find out what the group had gotten together as far as intellectual content, and how they were going to tell a story.
  • I’ve never read another leader anywhere who put an emphasis on candor
    • We want to put everything out on the table.
    • We are going to say what we believe.
    • We’re not going to have a meeting about what we are going to say. We are going to say what we believe.
  • There is this principle of differentiation. You believed that if you established a culture of differentiating these people in your company and identify them as such, this would be a great way to run your company. Some would say this is a heartless way to treat people. Do you feel differently?
    • Do you think sports teams differentiate?
    • Do the teams with the best players, who work as a team, win? Is winning good?
    • Translate that to business.
    • Business is a game. We are competing.
    • You have to have an appraisal system. And not a phony system. Not one where everyone is amazing!
    • If you get candor, and a system, that lets you know where you stand, then when the time comes most organizations would draw the same 20% 70% 10%.
    • In most places people spend more time trying to fix the bottom. Don’t do this. Get them out of your place, and give them a chance to go somewhere else.
  • Lets talk about this top 20%. Describe the attitude and behavior of top people. What are they like?
    • They are filled with energy
    • They have good values
    • They have a gene, this gene says, “I love to see people grow.” They’re not mean-spirited. They celebrate these people.
    • They have generosity of spirit.
  • So that becomes a very attractive dynamic.
    • They don’t have envy. Envy is a terrible thing.
  • Lets talk about the vital 70%. These are important people right? What are these people?
    • Not always there in the clutch, but very valuable.
    • Not as hard working.
    • The top of the 70% and the bottom of the 70% is a big difference.
    • I always believed as a leader, I would give someone a piece of paper with two columns. 1. What I like about what you are doing. 2. What you need to improve.
    • You have to have visual improvement.
  • Alright, now the bottom 10%. What characterizes this group?
    • Low energy.
    • Acidic – “A real pain in the arm” (laughs)
    • Nothing is worse than negative energy in an organization.
    • You can’t shut down noise.
    • You have to watch out for people who are whispering, and murmuring. These are the cynics.
    • The whisper is deadly.
    • You have to do everything you can to stop the meeting after the meeting.
  • You have a whole philosophy of compensating people differently in the 20,70,10.
    • You can’t give the 20% people enough.
    • The argument that comes up is “Who are you to tell me who is in the 20% 70% 10%?”
    • I’m sure there is a lot of biases and unfairness, but how else do you get an organization to know where they stand, and to move forward.
  • Could you have built GE to this really successful organization had you not been able to pay 6 figure salaries to your top people?
    • I wouldn’t want to try. It is a heck of a lot harder.
    • This is just part of a system.
    • If you can’t do ti in the business world, then you’ll lose your people.
    • People don’t join Google, GE, etc. because of some spiritual satisfaction. People join the church because they get this spiritual sense of satisfaction.
    • Sometimes non-profit means non-performance. You chose non-profit, you better put out non-profit.
  • What do you think is your biggest failure?
    • When people thought I was tearing GE apart, I was moving too slowly.
    • Don’t wait.
  • Some of us know that our decisions have great consequences. A simple yes or no creates a hesitation.
    • But what if you wait? Then you’re gonna lose more.
  • Many people think that you pulled off a great baton pass. There are a lot of pastors who have had good runs, and there are a whole generation of pastors who are thinking, “How do I do this baton pass?”
    • We decided about 8 years before I was going to retire. We had 22 candidates. We get down to 3, 8 years later and they were all long shots.
    • Its a groaning process. It shows the fallibility of the whole thing. I don’t think you’ll ever know how people are going to behave at the next level.
    • Hiring is hard, succession is brutal, it doesn’t get any harder than this.
    • If you start in the last 12 months then you don’t give yourself a chance to see the world correctly.
  • How important is celebrating?
    • It is so important.
    • There is enough in managers budgets to celebrate.
  • You had a health scare in the last year. It was very serious. You were in the hospital for 104 days.
    • I went to get a cortisone shot, and ended up with a staff infection.
  • During that time you started calling me Reverand Bill, and I called you Parishioner Jack. One night you said “Toss one north for me.” I realized it was for prayer. Was that time in the hospital open up your mind or heart to things of God?
    • Maybe. I give this church First Presbyterian the credit. I love my pastor, and my team.
    • I am not where my wife is, but I love this church.
    • Maybe it was the sickness. Who knows why I ran into this church? Who knows why I ran into the pastor?
    • I go to church all by myself.
  • I sincerely believe that the final run of your life is going to be the most impactful, and that God has great things for you. I can’t wait to see how it is going to unfold.
    • Thank you.

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