As CEO of GE, Jack Welch transformed the company from selling appliances & bulbs to a multinational conglomerate that had a major presence in financial services, media and industrial products. He was initially criticized for cost-cutting and layoffs but as GE expanded and its value soared in the financial market he was lauded.
Of course, he made mistakes throughout his career. There are three of the principles that worked well fr him and that will work for today's managers too.
Choose the right people.
Peter Drucker noted that "executives spend more time managing people and making people decisions than anything else. No other decisions are so long-lasting in consequences or so difficult to unmake". jack Welch emphasized that effective hiring was brutally hard but a key skill to develop. he spent more than half his time getting the right people in the right places and helping them to thrive. He avoided the mistake of assigning the strongest and most promising leaders to businesses that were the largest. he did not hesitate to send stars to regions where GE had a small presence. He knew when and how to let underperformers who were poor fits go.
He always advocated careful hiring and firing as well as measuring and judging managers by their own decisions. He proposed that anyone involved in promoting an employee should score on their success and failures. This would not only help assess the selection skills but also prompt superiors to support new hires when needed.
Speak with candour.
A highlight o Jack Welch's leadership was his extraordinary candour. He called lack of candour a killer, that it blocks ideas, fast action and good people contributing everything they have. He was always blunt in his talk making sure he was understood and probing to make sure that the person was certain and well informed about the opinion being offered.
He was direct about performance. Every year all employees were separated into the top 20%, middle 70% and bottom 10% and the bottom 10% had to go. He was always convinced that it is better to inform the employee about his performance rather than paper over it. allowing them to check if they can do something else in the company or look for alternatives. He emphasized values as well, used a two by two matrix to evaluate employees. If they were found inadequate then he would inform them and if they did not improve they had to go.
Be insatiably curious.
He asked more questions than anybody else, the purpose being to absorb as much information as he could. His desire to learn is something the executives of today need to learn in today's dynamic environment. It is a fact curiosity is the most important hallmark of high potentials. A study of top leader confirms this important trait - all the top performers are voracious for knowledge.
Jack Welch may mot have been a perfect leader. But his curiosity, candour and focus on making the right people decisions are the three important aspects of effective leadership that one should seek to cultivate.
Jack Welch’s Approach to Leadership
by Claudio Fernandez Araoz March 03, 2020
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