“If you like business, you have to like GE. If you like ideas, you have to love GE” – Jack Welch
Yes, Jack Welch has GE in his blood! ‘Straight from the Gut’ is an autobiography by Jack Welch who was an exceptional leader, and for twenty years, was the CEO of one of the largest companies in the world – General Electric (GE).
“Excellence and competitiveness aren’t incompatible with honesty and integrity. Nothing is more important than a company’s integrity. Its the first and most important value in any organization. It not only means that people must abide by the letter and spirit of the law, it also means doing the right thing and fighting for what you believe is right”
That, he says is his guiding principle. He looks at these principles in other people before giving them important positions in the company. He calls them GE Values.
“Bureaucracy strangles. Informality liberates. Creating an informal atmosphere is a competitive advantage. Bureaucracy can be the ultimate insulator. Informality is about making sure everybody counts – and everybody knows why they count. Titles don’t matter, (there aught to be a) wide open spirit where everyone feels they can let it rip, ‘Covering your ass’ is ridiculed; Passion, chemistry and idea flow from any level at any place – Everyone’s welcome and expected to go at it”
Right from the beginning, he makes it clear that he is not the one to waste time over petty bureaucratic procedures. In fact, he mentions that he was lucky enough not to have any form of bureaucratic interference/delays in his job during his early years. He made sure that all sorts of procedural delays (to use his exact term – ‘superficial congeniality’) and unnecessary activities that did not help in the growth of a business, were cut off after he became the CEO.
“My objective was to put a small company spirit in a big company body, to build an organization out of an old line industrial company that would be more high spirited, more adaptable and more agile than competitors that are one-fiftieth our size. I said then that I wanted to create a company, “where people dare to try new things – where people feel assured in knowing that only the limits of their creativity and drive, their own standards of personal excellence, will be the ceiling on how far and how fast they move”
He lives up to his thoughts. He says that his favorite exercise after he became the CEO, was to conduct business reviews with all the managers and top executives of the various divisions in GE. He says that the business reviews were quite informal and people were encouraged to speak freely about the right and wrong things happening in their business.
Of course, reviews were more about people and their performance. He says that sometimes these reviews lasted all day! The top management not only understood the business better (due to these long reviews), but probing brought out a lot of possibilities and ideas from the managers/ business leaders involved.
“Legitimate self confidence is a winner. The true test of self confidence is the courage to be open – to welcome change and new ideas regardless of their source. Self confident people aren’t afraid to have their views challenged. they relish the intellectual combat that enriches ideas. They determine the ultimate openness of an organization and its ability to learn”
He introduced a concept called ‘boundryless’, which encouraged his employees to learn from multiple (external) sources. If a good idea has been implemented in one division, all the other division heads were supposed to know about it and they were required to try and implement it in their own business. Sometimes, a senior manager of one division would be expected to give a suggestion to be implemented in some other division in order to improve a process, cut costs or improve sales. That became an important parameter on which managers were judged during their review meetings. In short, various departments of a single company were not allowed to function like separate islands, and everyone were expected to learn the best practices from each other.
“The clarity of No. 1 or No. 2 came from a pair of very tough questions (Peter) Drucker posed – If you weren’t already in the business, would you enter it today? And if the answer is no, what are you going to do about it?”
This principle was one of his driving forces behind consolidating different businesses at GE. He insists that they try to be the No.1 or No.2 (in market share) in any business they got into and usually sold off all other businesses which were not able to achieve that position within a given time frame.
He was called as ‘Neutron Jack’ for a similar policy he followed with employees. They were basically divided in to three categories – Top 20, Vital 70 and Bottom 10. The top 20% were rewarded more than others, and the bottom 10% were scrutinized and sometimes laid off. Naturally these activities did not go down well with either the employees or public, but he says that a leader has to act tough and do what is best for (in this case) his company.
“Finding good people happens in all kinds of ways, and I’ve always believed ‘everyone you meet is another interview’. In fact GE is all about finding and building great people, no matter where they come from. I am over the top on lots of issues but none comes as close to the passion I have for making people, GE’s core competency”
That makes his biggest strength (people management), very clear. And you can easily gauge it by the infinite number of people who have been mentioned in this book (with their full names). It is very difficult for anyone to remember everyone they have been associated with, during their long career. But Jack Welch says that he can even recollect the names of people whom he has met only once before 20-30 years!
Perhaps the comment made by Warren Buffett on Jack Welch sums up this book (and his career) perfectly – “The Tiger Woods of management… listen carefully to what he has to say”.
- You can buy ‘Straight From The Gut’ by Jack Welch from Amazon.in in India. [Disclaimer: This is an affiliate link. I may get a small commission if you click on the link and buy the product. Your price will not change.]