Winning Player

As a child, Jack Welch stuttered.

“It’s because you’re so smart,” his mother told him. “No one’s tongue could keep up with a brain like yours.”

“I believed her,” he says. “The stuttering just never bothered me. My mother filled me with self-confidence — she just poured it in.” Perhaps it was his mother, Grace, who is responsible for the great success of her only son.

Jack Welch, now 71, began his career at GE in 1960, and 20 years later became the company’s Chairman and CEO. During his tenure, he transformed the company from a bureaucracy into a powerhouse. In his first year in charge, GE was America’s 11th largest company. When he left in 2001, it was number one, with a market value of $400 billion. Fortune magazine called Welch “America’s Toughest Boss” and “Manager of the Century.” For four years, from 1998 to 2001, the Financial Times named him the “world’s most respected business leader.”

Now retired, he runs Jack Welch, LLC and advises Fortune 500 business CEOs and travels around the world lecturing and talking to business people and students.

Recently, he decided to bring his management genius into the classroom. He is now teaching a class at the MIT Sloan School of Management called Conversations with Jack Welch. Thirty students were chosen to take the class from a field of 96, who submitted essays and resumes.

“I’m really impressed by MIT,” he says. “I like the intensity of the learning, and I like the smart kids. They ask incredibly smart questions.” In the class, students role play. They hire, fire, review projects, then Welch critiques them.

The only textbook for the class is Winning, a management book Welch wrote with his wife, Suzy.

While leadership cannot be taught entirely, he says, aspects of it can be taught, like decisiveness and execution. Yet if you don’t have high energy and passion, he says, “you’re dead.”

NO BALONEY

Jack Welch is the king of no baloney. He is down-to-earth, straight-talking, and has a just-do-it approach. “Be forthright with people,” he says, adding that candor is a principle of success.

At GE, he was candid with people indeed. In his first five years as CEO, he fired 100,000 people. He was known as Neutron Jack because he removed the people but left the building standing.

During his 40 years at GE, Welch managed his workforce with a 20-70-10 concept. He divided employees into the top 20 percent, the middle 70 percent, and the bottom 10 percent.

He gave the top stars rewards and made them role models for others, he showed the middle 70 percent what they need to do to become stars, and he showed the bottom 10 percent the door. “It’s the kindest form of management,” he says.

“Cruel management is when you’re sweet to the bottom 10 percent and let them stay. They’re 29 years old, then 35, then 47. When a recession comes, and you have to let them go, they say, ‘But why me? I’ve been here 20 years.’

“Firing people is the toughest thing you do in business. But in the end, it’s right for everyone. The employees that have to go are off to new jobs where they’re a better fit. And the organization becomes stronger and more competitive as you upgrade the talent with a better chance to create a winning company.”

WINNING

Winning is what Jack Welch is all about. Tremendously competitive, he grew up in a tough neighborhood in Salem on Boston’s north shore. As a boy, he played baseball, hockey, and golf. “The big kids picked the teams, and if you weren’t competitive, you didn’t get to play.”

“Business is a game. Don’t you want to be celebrating in the winning locker room after the game?” says Welch, who believes in celebrations at work. Teams at GE, always celebrated small victories. He sent them to Disney World with their families or gave them tickets to a Broadway show. Celebrating is important, he says. It makes people feel like winners.

“I happen to believe that this is all about winning, and only winning companies give back. Only winning companies can give to society. Only winning companies have employees who have time to mentor in schools. We had 50,000 mentors all over the world when I retired.”

“If you’re a losing company, going down the drain, your people are worried about their jobs. They don’t have time to give back. The company doesn’t have profits to give back, so the whole thing doesn’t work. “I love to see winning players create winning environments where employees can thrive. It’s really the big turn on.”

by Liz Karagianis

On Topic: business, faculty, management