Rule #3: Leadership Is Confusing As Hell

When we think of Welch, we do not ordinarily think vision. (What is GE's vision? I haven't a clue! "We bring good things to life" ain't it.) We do think rigorous performance standards, empowerment ("WorkOut" in GE-speak), leadership, and talent development. Jack Welch, it turns out, is a great manager (see rule #1).

18. Leaders are good at forgetting. Peter Senge's brilliant insight 10 years ago was that companies need to be learning organizations. My campaign 2001: Companies need to be forgetting organizations. Enron Corp., which has repeatedly been tagged as the nation's most innovative corporation, is exhibit A as a world-class forgetting organization. It's not wedded to what it did yesterday. Enron chiefs Kenneth Lay and Jeff Skilling have figured out how to operate like a band of pirates. Got an idea? Don't dally. Go for it while it's an original! Doesn't work? Try something else. If that doesn't work, fuhgeddaboutit!

19. Leaders bring in different dudes. This is a corollary to forgetting. Many leaders are preoccupied with creating high-performance organizations. But to that, I say: Crazy times demand high-standard-deviation organizations! This isn't just weirdness for the sake of weirdness. This is weirdness for the sake of variety.

Winning leaders know that their organizations need to refresh the gene pool. That happens when leaders forget old practices and open up their minds to new ones. That also happens -- and more effectively -- when leaders bring in new people and new partners with new ideas. As a leader, do with your people what Cisco has done so effectively with technology: Acquire a new line of thinking by acquiring a new group of thinkers.

20. Leaders make mistakes -- and make no bones about it. Nobody -- repeat, nobody -- gets it right the first time. Most of us don't get it right the second, third, or fourth time either. Winston Churchill said it best: "Success is the ability to go from failure to failure without losing your enthusiasm." Churchill blew one assignment after another -- until he came up against the big one and saved the world.

As times get crazier, you're going to see more -- and dumber -- mistakes. When you make mistakes, you need to recognize them quickly, deal with them quickly, move on quickly -- and make cooler mistakes tomorrow.

21. Leaders love to work with other leaders. Nortel CEO, president, and VC John Roth says, "Our strategies must be tied to leading-edge customers on the attack. If we focus on the defensive customers, we will also become defensive." Amen. (No: AMEN!) Leaders are known by the company they keep. If you work with people who are cool, pioneering leaders who have customers who are cool, pioneering leaders who source from suppliers who are cool, pioneering leaders -- then you'll stay on the leading edge for the next five years. Laggards work with laggards. Leaders work with leaders. It really is that simple.

22. Leaders can laugh. Another corollary to the art of leadership and making mistakes: No one's infallible (except for the Pope). In order to survive in these wild times, you're going to make a total fool of yourself with incredible regularity. If you can't laugh about it, then you are doomed. Take it from me. (And if you are a humorless bastard, please do me a favor: Don't immediately march over to your VP of human resources and order, "Ve vill haff humor! Bring me ze funny people!" But do remember the madness of the times. Humor is the best tool you've got to keep your team from going mad. No bull!)

23. Leaders set design specs. You can't be a leader over the next five years and not be totally into design. Design specs are the double-helix DNA that sets the tone of the culture and establishes the operating ideas that embody the company. They are your distinguishing characteristics, your brand's brand. If you don't already know how, learn how to speak design. Apple CEO Steve Jobs calls design "soul." I say: Design specs = soul operating system.

24. Leaders also know when to challenge design specs. Here comes another bloody brain flip: In zany times, design specs (corporate character) must be open to constant reevaluation. What worked during the past five years may or may not work for the next five years.

The classic example we should all watch: What will Jeffrey Immelt do when he takes over "the house that Jack built" at GE? Want to know what kind of leader Immelt will turn out to be? The clearest signal will come from how he handles GE's design specs. In this Age of Madness, nothing is holy. Even at GE.