One of the greatest and most effective business leaders of all time was Jack Welch, Chief Executive Officer (CEO) of General Electric (GE). Over his 20 years as CEO, he established himself as the most admired business leader in the world. His initiatives of Six Sigma, globalization, and e-business have defined the modern corporation. He relied on being without limits and sharing ideas with all workers, he had an intense focus on people, and he had passion and integrity for GE.
Of the Ten Commitments of Leadership, laid out by Kouzes and Poszner (2002) in the book, “The Leadership Challenge,” serving as a guide on how leaders get extraordinary things done in an organization, I will examine the seven I see as the most important. The strengths and style of such a remarkable leader like Jack Welch compare to these commitments with great accuracy, as he has followed them throughout his career and his dealing with people on a day-to-day basis.
By looking at these seven Commitments (Find your voice, Set the example, Envision the future, Enlist others, Search for opportunities, Foster collaboration, and Strengthen others) and the qualities of a leader such as Jack Welch, we are better able to understand what it takes to be successful in an organization and become better leaders ourselves. Jack Welch fully embodies the first of the Ten Commitments, which is “Find your Voice. ” A key element to finding one’s voice is to clarify one’s values and express oneself. Jack Welch did both of these starting his first day at GE.
Welch (2001) stated, “In just one year, GE’s bureaucracy would nearly drive me out of the company” (p. 20). His values were molded when he received his first raise of $1,000. Jack felt that this was an insufficient raise for all the work had had completed. He then negotiated with his boss, even put in his resignation, and the boss offered Jack an extra $2,000 to stay, a promise of increase in responsibility, and cover from the bureaucracy. This made a powerful impression on a young Jack Welch. Jack (2001) stated his values from this point on were for “rewarding the best and weeding out the ineffective” (p.25).
Jack had begun his unwavering commitment to his set of values early in his career. As CEO of GE, Jack began to express these values with his own voice. Throughout his career at GE, Jack stuck closely to the idea that rewarding the best and removing the weakest was the only way to run this business. He has spoken on this view throughout his career at GE, and acted on it in many ways. The second of the Ten Commitments is to “Set the Example,” meaning a leader needs to build and affirm shared values and align actions with those values.
Tremendous energy is generated when the values of an organization are all working towards the same goal. All of the executives at GE, and eventually the managers shared Jack’s values of dealing with people, also. Welch (2001) believed in “always fighting to raise the bar” (p. 25) and focusing on his need to build great people. In a company with over 300,000 employees and 4,000 senior managers, Jack knew that there needed to be some structure so that standards were always met. He uses the term “differentiation” as his way of looking at his people within the organization.
By getting excited and passionate about his people, Jack was able to gain enthusiasm and commitment from them. Jack always worked by the same standards he expected from his people: be number one. If an employee was not able to live up this expectation, Jack followed by what he said; he “removed the weakest. ” He began with the Session C’s, which are meetings held once a year, where each manager discussed the performance of each of their subordinates, and the bottom ten percent were let go. These sessions got many employees involved in the decision making process, which gained their buy in of his values.
Jack lead by example and followed his values in every action he took. The next of the 10 commitments is “Envision the Future” which was a real strength for Jack Welch at GE. As CEO, Jack knew that in order for GE to stay in business, he needed to be forward-looking and work towards the future. On December 8, 1981, Jack made his first speech as CEO to financial representatives in New York City. During this speech, Jack laid out his visions for the future. He said that he would insist upon being the number one or number two producer of every product GE makes.
The businesses where they are not in this position would be sold or closed. Welch’s (2001) central idea for the future success of the company, along with three dominant soft values of reality were quality/excellence, and the human element (App. A). Jack lived by this number one or number two vision for the future his entire career. Welch (2001) said, “Like every goal or initiative we’ve ever launched, I repeated the No. 1 or No. 2 message over and over again until I nearly gagged on the words. The organization had to see every management action aligned with the vision” (p.
109). Throughout Jack’s career with GE, he stuck to this vision for the future, and sold off all his businesses that fell below number two and would buy other businesses that were number one or number two in a different industry. Jack rarely talked about the past; he constantly talked about the present and the future. He cared passionately about where GE stood today, but, above all else, he wanted to determine how to move the company into the future. Jack Welch and his counterparts at GE all worked together as a team to create Jack’s vision for the company.
The next of the Ten Commitments is “Enlist Others” which Jack was very successful at doing. Enlisting others means that a leader has effectively communicated their vision to their people and has taught them the importance of following this vision every day. Jack (1999) claimed, “My whole job is people. I can’t design an engine. I have to bet on people” (p. 134). He began to work towards the challenge of engaging the minds of his workers and exploring ways to improve the day-to-day functioning of the business. Jack Welch was striving to create a no limit culture that encouraged workers to share ideas and learn from one another.
According to Slater (1999), he created “Work Out” sessions, where his visions and goals were communicated to all the GE employees. These workshops taught workers about the company, about getting along with others, and working as a team with their bosses (pp. 154 – 160). This was a very successful way to bring all workers together and get them on board with Jack’s vision for the future success of GE. Jack was a strong communicator and the most successful employees believed in his values that the best people should be rewarded and the weakest should be removed.
Jack communicated these values well throughout the organization, making this a main focus. Jack made all GE employees carry a small, wallet-sized card that listed GE’s core values. Jack (1999) said, “There isn’t a human being in GE that wouldn’t have the Values Guide with them. It means everything and we live it. And we remove people we don’t have those values, even when they post great results” (p. 53). The fifth of the Ten Commitments is to “Search for opportunities. ” Jack Welch at GE was always searching for new ways to do things and new challenges to conquer.
Kouzes and Posner (2002) claimed the way to search for opportunities is by “seeking innovative ways to change, grow, and improve” (p. 204). A leader needs to treat every job as an adventure and always seek out challenges for themselves and for others. Jack Welch believed in doing the best possible, and then reaching beyond. He called this business strategy “stretching,” which means exceeding goals. Jack (1999) explained that stretching is a way to figure out performance targets that are achievable and reasonable, then raising the sights higher towards goals that seem almost beyond reach.
“We have found that by reaching for what appears to be the impossible, we often actually do the impossible; and even when we don’t quite make it, we inevitably wind up doing much better than we would have done”(p. 165). Jack Welch was always searching for opportunities to better his business and to better his people. Jack Welch as CEO of GE was a risk taker. He was one to break out of the norm and improve the way things are. The next of the Ten Commitments is to “Foster Collaboration. ” Leadership is a team effort, not a solo act.
A good leader knows how to bring his people together and get them to work as a team toward a common goal. They must promote cooperative goals and build trust in their people. Jack Welch believed in a no limit organization, where everyone worked together, and shared ideas to make the company more successful. He held many team building exercises and classes at Crotonville (a large training facility in Ossining, New York), Welch (1999) taught his managers to “Act like a leader, not a manager,” and he trusted in his people and gave them decision-making power (p. 15).
Jack (1999) said, “We want to be more than that. We want to change the competitive landscape. We want to make our quality so special, so valuable to our customers, so important to their success that our products become their only real value choice,” (p. 25). As in this last statement, Jack Welch commonly used the terms “we,” “us,” and “our. ” This is a major key in fostering collaboration. It is important for a leader to use inclusive language to reinforce the fact that goals are truly collaborative. Jack Welch also believed in a community environment at GE.
Everything is open so workers can talk and work together. The offices are set up into pods of four desks, all facing each other, and they are open with no doors to allow visitors at any time. Again, this fosters collaboration by putting workers face to face on a daily basis. Teamwork was very important to Jack Welch as CEO of GE, and played significantly into his success. Jack Welch believed in the development of his people. This is the next of the Ten Commitments, “Strengthen Others,” which again, was a strong leadership characteristic for Jack.
Welch (1999) insisted “The way to get faster, and more productive, and more competitive is to unleash the energy and intelligence and raw, ornery, self-confidence of the American worker, who is still by far the most productive and innovative in the world”(p. 144). Jack believed in involving every worker in the decision-making process, and believed that his employees had great ideas. Jack believed in empowering people to make decisions, and empowering them to take responsibility for failures. In 1981, when Jack first became CEO of GE, he took on a large project remaking Crotonville, with the idea that it was going to (2001) “remake GE” (p.171).
Jack spent many of his years focusing on Crotonville and the development of his people. He knew that without some kind of training, his pool of future leadership for GE would be too small, and that could lead to problems. Welch (2001) noted, “When all is said and done, teaching is what I try to do for a living. Truth is, I’ve always liked teaching” (p. 176). Jack also focused on the importance of training with Six Sigma, by requiring the leadership of the company to be black belt certified.
On January 1, 1998, Jack sent out a fax to managers around the company, stating that one must have started green belt or black belt training in order to be promoted to senior management. It also stated that on January 1, 1999, all of GE’s “professional” employees must have begun green belt or black belt training. Jack’s message was clear (1999), “If you don’t have a belt, you won’t be promoted” (p. 219). This verifies that training, development, and “strengthening others” was extremely important to Jack Welch, which is yet another commitment that made him a phenomenal leader.
Jack Welch embodies all of these commitments necessary for a strong leader to be successful. However, no one is perfect, and Jack Welch did have his faults. According to Slater (1999), during his early restructuring efforts of GE, he won the name of “Neutron Jack” from the media, which was an allusion to the neutron bomb that eliminates people but leaves the building standing. Jack hated the name because it suggested that he had been unfair to his employees, and that he had pushed them into the streets without a way to make a living (p. 64).
Within Jack’s first five years as CEO, one of every four people would leave the GE payroll. This made for 118,000 people in all, including 37,000 employees in businesses that were sold. Troubling people more was Jack investing millions of dollars in fitness centers, guesthouses, and conference centers. This was a hard time for Jack, but he kept doing what he felt was right for GE. Nevertheless, this attitude intimidated many employees in the company. This made them afraid to approach Welch, and sometimes even scared them enough to leave the company.
His brut honesty with poor performers would leave some employees with burnt egos. There were some faults in Jack Welch’s leadership skills, although they had little effect on his ability to make General Electric successful. Jack Welch truly redesigned the way an organization treats and values their employees. His focus was on people all throughout his career, and his main focus was on having the number one people, because with the number one people a CEO can have the number one company. Welch (2001) once said “We build great people, who then build great products and services” (p. 157).
I found Jack’s commitment to training and developing employees to be the one of the Ten Commitments that stood out and really made Jack Welch a unique leader. He (2001) admitted, “I’m over the top on lots of issues, but none comes as close to the passion I have for making people GE’s core competency” (p. 156). Jack got involved with teaching classes for managers and executives at Crotonville every year of his tenure with GE. I think this is extremely important for a successful leader to get in front of their people, talk about their values and visions, and teach the people to go out and inspire others to follow the visions as well.
I was also very interested in his ideas of (2001) “rewarding the best and weeding out the ineffective” (p. 25). Jack divided people into A, B, and C players, and C players are the ones that were let go from the company. Jack’s philosophy is to get rid of the bottom 10%, meaning the least effective performers in the organization. To me, all businesses should be run this way. Being employed is a privilege, so if someone is not performing, they lose the privilege of earning money. It just makes sense, and Jack Welch is one of the few leaders who truly understand the importance of this philosophy and stands by it 100%.
I think there are many ways in which Jack Welch was a successful leader. His drive and ambition, his creative ideas, his structured leadership style, and his use of his people all made him one of the most admired business leaders in the world. References: Byrne, J. , & Welch, J. (2001). Jack: Straight from the Gut. New York: Warner Books, Inc. Kouzes, J. , & Posner, B. (2002). The Leadership Challenge (Third Edition). San Francisco: Jossey-Bass. Slater, R. (1999). Jack Welch and the GE Way. New York: McGraw-Hill.