Jack Welch - Winning

I have just finished reading a book authored none other than the don of leadership himself Mr Jack Welch formerly CEO of General Electric.Welch has written several books since he stepped down from the CEO position at GE. Most of his books have focused on leadership, management and CEOing one of the biggest and most complex corporations in the world. In Winning, Welch talks about his formula for successful management on all it’s aspects: hiring, firing, prioritization, mergers and acquisitions, dealing with change, work life balance, budgeting, six sigma, and dealing with a bad boss. I have sumarised the book in 7 key topics for easy reading.

Making Managers Lead

Welch had a seven-point program for management: (1) Develop a vision for the business; (2) Change the culture to achieve the vision; (3) Flatten the organization; (4) Eliminate bureaucracy; (5) Empower individuals; (6) Raise quality; and (7) Eliminate boundaries. The difference between a leader and a manager is likened to that of a general and an officer down the line. A leader’s job is to allocate resources available (people and money) rigorously in order to generate optimum results. The results, in turn, will be gained under the “management” of the “officers”. The role of a manager is not to spread resources out evenly (to Welch, this is bureaucracy) but to make dynamic choices.

Controlling Bureaucracy. Welch waged a war on bureaucracy. He removed layers upon layers of heads who were, according to him, harmful and whose roles where vague, who slowed decision-making, blurred responsibility, and created undoable jobs. 

Sharing Information. Welch believed in the power of sharing information. He uses meetings and committees not as a form of control but as his most powerful management tool. The critical sessions are what he called Corporate Executive Council (CEC) which is attended by the company’s top executives and where he checks on progress, and exchanges ideas and information. The leaders in these sessions shared their lessons of successes and failures, transferred new ideas. 

Pursuing Best Practices. The principle of “best practices” is also deeply rooted in Welch’s philosophy. Welch uses these regular meetings to share and publicize achievements of other groups and the methodology behind them. The decision to adopt these practices, however, is left to the individual businesses and their leaders.

Delegating Responsibility. Welch’s leadership theory depends heavily on the power of delegation. Welch, however, does not just relinquish all power to good people. He balances hands-off management – giving his business heads full autonomy and the power of decision – with hands-on leadership. He keeps his “direct reports” on their toes by the unpredictability of his interventions in sometimes, lesser matters. 

Exceeding Commitments. Welch leads by having clearly setout goals for productivity, inventory turns, quality, working capital, customer satisfaction, and so on. These goals are treated as rock-solid commitments. As Welch believes in the survival of the fittest, the meetings become jungles where the combatant who comes out top in exceeding commitments wins.

Winning Hearts and Minds. Welch saw the liberation and empowerment of middle managers as the key to productivity gains. In order to win them over, Welch recipe was as follows: (1) Free managers to manage – and to rise; (2) Defeat bureaucracy and rigidity; (3) Generate and use new ideas; (4) Empower workers to flourish and grow. In addition, Welch believes leadership must be personal. Nobody at GE gets a formal letter from him – it comes in his own handwriting and rewards are always accompanied by frank, face-to-face evaluations. The rewards were tremendous as long as performance matched and exceeded expectations. 

Knowing the People. Welch’s greatest pride is in his ability to find and nurture highly able managers. To Welch, these people must possess what he describes as “E to the fourth power” where the “E” stands for Energy, Energizing others, competitive Edge and Execution. A leader should really get to know the top people in the organization.

 Looking to the Future. Toughness is an essential element in the leadership that Welch practices and admires. The demands include the stipulation that senior executives should strive to develop their own excellent replacements. The ultimate test of a leader is not what happens during his or her leadership – but what follows after he or she has departed. Welch’s ideas about his own successor, therefore, sounded much like a self-portrait. Among the characteristics are: Incredible energy, Ability to excite others, Ability to define a vision, Finding change fun and not paralyzing, Feeling comfortable in Delhi or Denver, Ability to talk to all kinds of people.

To your Success