25 Lessons from Jack Welch

Management Insight and Leadership Secrets of the Legendary Former CEO of General Electric

Jack Welch’s goal was to make GE "the world's most competitive enterprise." He knew that it would take nothing less than a "revolution" to transform that dream into a reality. "The model of business in corporate America in 1980 had not changed in decades. Workers worked, managers managed, and everyone knew their place. Forms and approvals and bureaucracy ruled the day." Welch's self-proclaimed revolution meant waging war on GE's old ways of doing things and reinventing the company from top to bottom. Today, GE with its unique learning culture and boundary-less organization is one the most admired company in the world. The techniques and ideas that Welch has employed to move GE forward are applicable to any size corporations, small, medium, or large."

 Lead More – Manage Less 

1. Lead: Managers muddle - leaders inspire. Leaders are people who inspire with clear vision of how things can be done better. "What we are looking for are leaders at every level who can energize, excite and inspire rather than enervate, depress, and control."
2. Manage Less: “We are constantly amazed by how much people will do when they are not told what to do by management." In the new knowledge-driven economy, people should make their own decision. Managing less is managing better. Close supervision, control and bureaucracy kill the competitive spirit of the company. "Weak managers are the killers of business; they are the job killers. You can't manage self-confidence into people."
3. Articulate Your Vision: "Leaders inspire people with clear visions of how things can be done better." The best leader does not provide a step-by-step instruction manual for workers. The best leaders are those who come up with new idea, and articulate a vision that inspires others to act.
4. Simplify: Keeping thins simple is one of the keys to business. "Simple messages travel faster, simpler designs reach the market faster and the elimination of clutter allows faster decision making."
5. Get Less Formal: "You must realize now how important it is to maintain the kind of corporate informality that encourages a training class to comfortably challenge the boss's pet ideas."
6. Energize Others: Genuine leadership comes from the quality of your vision and your ability to spark others to extraordinary performance. Getting employees excited about their work is the key to being a great business leader. "We now know where productivity - real and limitless productivity - comes from. It comes from challenged, empowered, excited, reward teams of people."
7. Face Reality: Face reality, then act decisively. Most mistakes that leaders make arise from not being willing to face reality and then acting on it. Facing reality often means saying and doing things that are not popular, but only by coming to grips with reality would things get better.
8. See Change as an Opportunity: Change is a big part of the reality in business. "Willingness to change is a strength, even if it means plunging part of the company into total confusion for a while... Keeping an eye out for change is both exhilarating and fun."
9. Get Good Ideas from Everywhere: New ideas are the lifeblood of business. "The operative assumption today is that someone, somewhere, has a better idea; and the operative compulsion is to find out who has that better idea, learn it, and put it into action - fast."
10. Follow up: Follow up on everything. Follow-up is one key measure of success for a business. Your follow-up business strategy will pave the way for your success.

Build a Winning Organization 

1. Get Rid of Bureaucracy: The way to harness the power of your people is "to turn them loose, and get the management layers off their backs, the bureaucratic shackles off their feet and the functional barriers out of their way."
2. Eliminate Boundaries: In order to make sure that people are free to reach for the impossible, you must remove anything that gets in their way. "Boundarylessness" describes an open organization free of bureaucracy and anything else that prevents the free flow of ideas, people, decisions, etc. Informality, fun and speed are the qualities found in a boundary less organization.
3. Put Values First: Don't focus too much on the numbers. "Numbers aren't the vision; numbers are the products." Focus more on the softer values of building a team, sharing, exciting others.
4. Cultivate Leaders: Cultivate leaders who have the four E’s of leadership: Energy, Energize, Edge, and Execution; leader who share values of your company and deliver on commitments.
5. Create a Learning Culture: Turn your company into a learning organization to spark free flow of communication and exchange of ideas. "The desire, and the ability, of an organization to continuously learn from any source, anywhere - and to rapidly convert this learning into action - is its ultimate competitive advantage."

 Harness your people for competitive advantage

1. Involve Everyone: Business is all about capturing intellect from every person. The way to engender enthusiasm is to allow employees far more freedom and far more responsibility.
2. Make Everybody a Team Player: Managers should learn to become team players. Middle managers have to be team members and coaches. Take steps against those managers who wouldn't learn to become team players.
3. Stretch: Stretch targets energize. "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."
4. Instill Confidence: Create a truly confident workforce. Confidence is a vital ingredient of any learning organization. The prescription for winning is speed, simplicity, and self-confidence. Self-confident people are open to good ideas regardless of their source and are willing to share them. "Just as surely as speed flows from simplicity, simplicity is grounded in self-confidence."
5. Have Fun: Fun must a big element in your business strategy. No one should have a job they don't enjoy. If you don't wake up energized and excited about tackling a new set of challenges, then you might be in the wrong job.

 Build a Market-Leading Company

1. Be Number 1 or Number 2: "When you're number four or five in a market, when number one sneezes, you get pneumonia. When you're number one, you control your destiny. The number fours keep merging; they have difficult times. That's not the same if you're number four, and that's your only businesses. Then you have to find strategic ways to get stronger. But GE had a lot of number one.
2. Live Quality: "We want to change the competitive landscape by being not just better than our competitors, but by taking quality to a whole new level. We want to make our quality so special, so valuable to our customers, so important to their success that our products become the only real value choice."
3. Constantly Focus on Innovation:   "You have just got to constantly focus on innovation. And more competitors. You've got to constantly produce more for less through intellectual capital. Shun the incremental, and look for the quantum leap." Now the fundamentals have got to be more education. More information knowledge, faster speeds, more technology across the board.
4. Live Speed: "Speed is everything. It is the indispensable ingredient of competitiveness." Speed, simplicity and self-confidence are closely intertwined. By simplifying the organization and instilling confidence, you create the foundation for an organization that incorporates speed into the fabric of the company.
5. Behave Like a Small Company: Small companies have huge competitive advantage. They "are uncluttered, simple, and informal. They thrive on passion and ridicule bureaucracy. Small companies grow on good ideas - regardless of their source. They need everyone, involve everyone, and reward or remove people based on their contribution to winning. Small companies dream big dreams and set the bar high - increments and fractions don't interest them."