The Jack Welch Leadership Crash Course

Jack Welch believes great leaders have a "generosity gene" that inspires them to help people grow. Here's the advice he generously shared with us about growing as a leader, making better decisions, and building your best business, over the course of a recent four-hour chat.

"Imagine Kaira (my daughter) meeting Justin Bieber," I kept telling myself. "And don’t act like that."

Jack Welch

I didn’t pull it off entirely. After all, Jack Welch’s aura is well deserved. Under his 20-year tenure heading GE, its stock went up 4,000 percent, making it the most valuable corporation in the world at the time. Many CEOs of Fortune 500 companies once worked for Welch, including the CEOs of Home Depot, 3M, Albertsons, and Honeywell. If someone wants to learn how to build and lead a great organization, is there anyone else who can offer more practical insight?

So last week, when I spoke at a conference featuring Welch and got to spend nearly four hours with him and his wife, Suzy Welch—who is a powerhouse as well: the former editor of Harvard Business Review, she has become Jack’s thought-partner and co-author—I soaked up as much as I could.

Here are my notes. Think of them as a workout, a mental exercise routine that will help get you in shape to build a large, dynamic, innovative organization like Welch did. Since space here is limited, I created a companion workbook. Click here for a copy. (This will also sign you up for my newsletter, from which you can opt out if you choose.)

The Jack Welch Workout—"CliffsNotes" Version

Exercises to build the foundation

Write out your mission and vision

Your leadership starts with showing people "where you are going, what you dream is, where you are going to be," according to Welch.

Define your values

Values describe "the behaviors that are going to get you there [to your vision]." Write down the five distinctive behaviors that you want people to adopt.

Prune whoever doesn’t live the values

Welch follows a now-famous approach in which you classify people into one of four boxes based on whether people deliver results or don’t, and on whether people live the values or don’t. Get rid of people who do not live your values, even if they perform for you, even though it’s tempting to keep them on to get "just one more month of results." By letting these people go, you say: we live our values here.

Exercises to grow

Plan your dream team

Winning in business is "no different than winning in football; the team that fields the best team players wins."

Craft your vision pitch

To get the best people working for you, sell your vision to "create a place where they can hardly wait to break down the door to get in."

Let go of process

"Your job as a leader is to inspire people and pick the best people. Managing processes is for your managers."

Exercises to innovate

Find outside ideas

Innovation is too often framed as developing the next cutting-edge product. But you can generate massive value by simply learning better practices from outside of your company.

Remove NIH

The "worst thing a company can have is NIH: ‘not invented here’ [syndrome]." NIH builds arrogance; people start believing they know how to do everything right and reject great ideas.

Bet on your best innovation

Too often companies staff new innovations by managers who are underperforming or about to retire. This tells your people innovation is not important. Instead, put your highest-potential leaders behind new innovations.

Listen to your instincts

Listen, learn, then act on your instincts. "Your gut is pretty good. Your instincts are good. Trust them. You don't need more data."

Exercises to motivate

Craft a scary story

Success leads to complacency. "Your job is to create paranoia about what is coming around the corner. You've got scare the bejeezus out of everyone."

Develop a "what’s in it for them" pitch

"If you don't spend enough time sharing what's in it for them [they won’t change]." You have to say, "If we don’t change [this is what will happen]. If we do change, there will be growth, job security … always show where we are, what the threats are, and where we need to go."

Exercises to maintain

Define your short and long-term goals

"Anyone can manage the short term. You squeeze, squeeze, squeeze, cut, cut, and cut, then get out before it all goes bad." The challenge of a leader, a central job of a leader, is to balance the short term and long term. Suzy Welch suggests, when thinking through decisions, to think in terms of 10 minutes, 10 months, 10 years.

Remove "maybes"

CEOs fail when they try to cover all the bases. Instead, say, "Here is where we are going, then allocate resources to run after it and get it." To balance short and long term, you need to give clear guidance. "Your job as a leader is to say yes to this, no to that, and as few ‘maybes’ as possible."

Rank your people

Pick "the top 20% [of employees]; love, kiss, and hug them; the middle 70%, tell them what they have to do to get in the top 20%; and the last 10%, you get rid of them … with dignity."

Practice candor

Candor, or telling people what you think, is "What makes real organizations competitive, aggressive, and winning." It creates trust.

Find your generosity gene

The one characteristic great leaders share is that "they love to see people grow." They have the "generosity gene." "The day you are afraid of them being better than you is the day you fail as a leader."

Look in the mirror

If you hire from outside you have failed

If the best person to take over as CEO is an outsider, your company has failed. You send the message, "You are not good enough, you stink, and I have to go outside to shape you guys up."

Click here to request a copy of a more comprehensive companion workbook.

[Image: Flickr user Let Ideas Compete]

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6 Comments

  • Califboy

    Jack has this alluring Magnatic draw to him, I really enjoy hearing him speak and his opinion on today's business environment.

  • B Allman

    After Jack Welch accused the President of manipulating the job report last month, does anyone care what he thinks?  Not me...  

  • Elwood_sr

    And of course we should never question the leadership of our country.  No wait, that's exactly what our founding father's said we should do if we don't feel that they have our best interests in mind.

  • Beo

    <sarcasm>Yes, he is obviously a fool to make note that we somehow how have more people unemployed and less jobs yet lower unemployment</sarcasm>