Jack Welch and the Ten Commitments of Leadership: A True Human Resource Leader

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Jack Welch and the Ten Commitments of Leadership A True Human Resource Leader


One of the greatest and most effective Human Resource and Business leaders of all time was Jack Welch, CEO of General Electric. Over his 0 years as CEO, he has 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 boundaryless and sharing ideas with all workers, he had an intense focus on people, and he had passion and integrity for GE. The Ten Commitments of Leadership, laid out by Kouzes and Poszner in the book, “The Leadership Challenge”, serve as a guide on how leaders get extraordinary things done in an organization. The strengths and style of such a remarkable leader like Jack Welch can be compared 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 Ten Commitments and the qualities of a leader such as Jack Welch, we are able to better 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 your voice is to clarify your values and express yourself. Jack Welch did both of these starting his first day at GE. “In just one year, GE’s bureaucracy would nearly drive me out of the company” (Welch, p. 0) Jack stated in his book. 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 he offered Jack an extra $,000 to stay, a promise of increase in responsibility, and cover from the bureaucracy. This made a powerful impression on a young Jack Welch. His values from this point on were for “rewarding the best and weeding out the ineffective” (Welch, p. 5). 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. As stated in his book “Rigorous differentiation delivers real stars, and stars build great business” (Welch, p. 5). 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. Jack’s values of dealing with his people were shared by all his executives at GE, and eventually his managers too. Everyone was “always fighting to raise the bar” (Welch, p. 5) and focusing on Jack’s need to build great people. In a company with over 00,000 employees and 4,000 senior managers, Jack knew that there needed to be some structure so that standards are 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 what he said and “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 are let go. These sessions got many employees involved in the decision making process, which gained their buy in of his values. Jack leads by example and follows his values in every action he takes.





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, 181, 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 will insist upon being the number one or number two producers of every product GE makes. The businesses where they are not in this position will be sold or closed. This was his central idea for the future success of the Company, along with three dominant soft values of reality, quality/excellence, and the human element (Welch, App. A). Jack lived by this No. 1 or No. vision for the future his entire career. “Like every goal or initiative we’ve ever launched, I repeated the No. 1 or No. message over and over again until I nearly gagged on the words. The organization had to see every management action aligned with the vision” (Welch, p. 10). ) 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 cares passionately about where GE stands today, but, above all else, he wants 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. “My whole job is people. I can’t design an engine. I have to bet on people” (Slater, p.14). 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 (Slater, p. 146). Jack Welch was striving to create a boundaryless culture that encouraged workers to share ideas and learn from one another. He created Work-Out sessions, where his visions and goals were communicated to all the GE employees. These were workshops that taught workers about the Company, about getting along with others, and working as a team with their bosses (Slater, 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 always spoke from the heart. “Whenever I had an idea or message I wanted to drive into the organization, I could never say it enough. I repeated it over and over and over, at every meeting and review, for years, until I could almost gag on the words” (Welch, p. ). The 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 has made all GE employees carry a small, wallet-sized card that is a list of GE’s core values. “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” (Slater, p. 5).


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. The way to search for opportunities is by “seeking innovative ways to change, grow, and improve” (Kouzes & Posner, p. 04). A leader needs to treat every job as an adventure and always seek out challenges for themselves and for others. Jack Welch believes in doing the best possible, and then reaching beyond. He calls this business strategy “stretching”, which means exceeding goals. Jack explains 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”(Slater, 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 is one to break out of the norm and improve the way things are. The next of the Ten Commitments is “Experiment and Take Risks” and Jack fully embodies this characteristic. Jack’s revolutionary strategies have made GE the benchmark for today’s global corporation. He took risks with his No. 1 and No. strategy, by selling off businesses and buying new ones; he took a risk when acquiring RCA (NBC) and getting into a business GE knew little about; he took a risk when putting millions of dollars into Crotonville for developing people, he took a risk when creating Session C’s and laying off the worst performers, and he took risks many other times through-out his career at GE (Welch, pp. 100 � 157). Jack Welch experimented and created new initiatives that helped build a stronger GE. He implemented Globalization, Six Sigma, and E-business. Jack made a comment when asked about the risks he has taken; “I would have liked to have done things a lot faster. I’ve been here for seventeen years. Imagine if I’d taken four, three, or even one year too long in making my decisions. I would have had a rude awakening” (Slater, p. 4). Being a risk taker such as Jack Welch is an important part of being a successful leader and accomplishing the 6th of the Ten Commitments


The next of the Ten Commitments is to “Foster Collaboration.” Leadership is not a solo act, it is a team effort. A good leader knows how to collaborate their people and get them to work as teams towards a common goal. They must promote cooperative goals and build trust in their people. Jack Welch believed in a boundaryless organization, where everyone worked together and shared ideas to make the company more successful. He held many team building exercises and classes at Crotonville, he taught his managers to “Act like a leader, not a manager”, and he trusted in his people and gave them decision making power (Slater, p.15). Jack 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.” (Slater, p. 5). 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. “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” Jack said (Slater, p. 144). Jack believed in involving every worker in the decision making process. He believed that they had great ideas and by not taping into this resource, the company is missing out on future success. Jack believed in empowering people to make decisions, and empowering them to take responsibility for failures. In 181, when Jack first became CEO of GE, he took on a large project of remaking Crotonville, with the idea that it was going to “remake GE” (Welch, p. 171). Crotonville is a large training facility in Ossining, New York, which is used to give classes on many topics to potential and existing GE leaders all over the Company. 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. “When all is said and done, teaching is what I try to do for a living. Truth is, I’ve always liked teaching” (Welch, p. 176). Jack also focused on the importance of training by requiring the leadership of the company to be black-belt certified. On January 1st of 18, 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 1st of 1, all of GE’s “professional” employees must have begun green belt or black belt training. Jack’s message was clear “If you don’t have a belt, you won’t be promoted” (Slater, p. 1). This verifies that training, development, and “strengthening others” were extremely important to Jack Welch, which is yet another commitment that made him a phenomenal leader.


The next of the Ten Commitments is to “Recognize Contributions” which Jack Welch did in numerous different ways throughout his career at GE. Only when constituents feel appreciated by their leaders do they put forth extraordinary effort. Those employees who do not feel that their work is appreciated will harness a feeling of anger and therefore not perform to the best of their capabilities. Jack Welch knew this, and he took care of his people for a job well done. Again, this goes back to Jack’s view of “rewarding the best and weeding out the ineffective.” (Welch, p. 5). To Jack, rewarding the best meant giving them promotions to better positions, stock options, salary raises, and other substantial gifts as a thank you’s for good performance and as insurance that they will perform that well again. He would never hesitate to tell an employee they were doing a great job, or thank them for their hard work. All of the executives that worked closely with Jack throughout his career have been given hand written thank you letters from Jack when they did something spectacular. An excerpt from an article mentioned a letter that Jack wrote to an employee; ‘‘Bill, wrote Welch, we like you for a lot of reasons--one of them is that you are a very special person. You proved it again this morning. Good for you and your lucky family. Make Diamonds a great business and keep your priorities straight. To Bill Woodburn, the note was an important gesture. It showed me he cared about me not as a manager but as a person, he says. That means a lot (Abbott). Employees even sometimes received an expensive surprise at their front door, for example, William J. Conaty, one manager who had to make a presentation before Welch was so jittery he was shaking. It was the first time he had met Welch in his career. Im so nervous, the manager confessed to Welch. And my wife has told me shell throw me out of the house if I cant get through this presentation. At days end, when Welch was back on the corporate plane, he immediately arranged for a dozen roses and a bottle of Dom Perignon to be delivered to the mans home. He then penned a note to the wife Your husband did a fantastic job today. Were sorry we put him and you through this for a couple of weeks (Abbott). Jack Welch was not afraid to give recognition when it was due, and he made everyone aware of the accomplishments of others, so people could learn from each other’s successes


The last of the Ten Commitments is to “Celebrate the Values and Victories.” Celebrations are one of the most significant ways to proclaim respect and gratitude, to renew a sense of community, and to remind people of the values and history that bind the organization together. Jack Welch believed in celebrating and having fun at work. At Crotonville, Jack would typically ask his students “Are you celebrating enough?” The students typically told him no. Jack would push back at them and encourage them to begin celebrating within their teams “You have to consider yourself the manager of celebrations. It can be a keg of beer or a dinner for two” (Welch, p. 87). Jack Welch always said that business has to be fun. He believed that celebrations are a great way to energize an organization. GE continues to have many events and celebrations for all employees and sometimes their families to participate in. “GE Days” happens once every two years, where all employees and their families can come onto GE property and tour the manufacturing plants and see the offices where their family member works. Each department within GE is encouraged to have picnics and parties to celebrate victories. Jack allowed money in the budget for these kinds of celebrations, and made sure that the departments were using the money to do so. Jack purchased parks and golf courses to be used by GE employees, and he encouraged and allowed employees to have golf outings during what should have been a normal business day (Welch, p. 67). Jack Welch thoroughly believed in creating a fun work environment, and allowing everyone to celebrate when they were successful.


Jack Welch embodies all of the Ten Commitments necessary for a strong leader to be successful. But no one is perfect, and Jack Welch did have his faults. 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. (Slater, 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 7,000 employees in businesses that were sold. What upset people even more was that Jack was 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. This legendary chairman of GE was known to have a “take-no-prisoners” tough guy persona and gets results at any cost. He does this through sheer force of personality, passion for winning, and a sharp attention to details many leaders would simply overlook. Jack says he does it because, above all else, hes a fierce believer in the power of his people (Abbott). But 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. So there were some faults in Jack Welch’s leadership skills, although they had little effect on his ability to make General Electric successful.


From reading several books on Jack Welch and having several friends that work at GE, I became intrigued with his integrity, intelligence, and passion for the people within the GE organization. He 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 you can have the number one company. “We build great people, who then build great products and services” (Welch, 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. “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” (Welch, p. 156). Jack got involved with teaching and facilitating classes for managers and executives at Crotonville every year of his tenure with GE. I think this is so important for a successful leader to get in front of their people and 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 “rewarding the best and weeding out the ineffective” (Welch, p.5). Differentiation was a very interesting concept for me, and I think this idea is a large reason that GE has been so successful and remained highly competitive in its industries. Jack divides people into A, B, and C players, and C players are the ones that will be 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, this is the way all businesses should be run. Being employed is a privilege, not a right, so if someone is not performing, they lose the privilege of earning money at that company. It just makes sense, and Jack Welch is one of the few leaders that 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. There is so much more to say about Jack Welch and his success at GE, but I will end it with a comment straight from the horse’s mouth. This place runs by its great people, says Welch. The biggest accomplishment Ive had is to find great people. An army of them. They are all better than most CEOs. They are big hitters, and they seem to thrive here (Abbott).


References


J. Abbott, “How Jack Welch Runs GE,” Business Week Online Archives, May 8, 18.


J. Kouzes and B. Posner, The Leadership Challenge, Jossey-bass, 00 (Third Edition).


R. Slater, Jack Welch and the GE Way, McGraw-Hill, 1.


J. Welch and J. Byrne, Jack Straight from the Gut, Warner Books, 001.


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