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Jack Welch – Straight From the Gut
A really good story for an autobiography. In Straight from the Gut the emphasis is mostly on Welch’s career and less of his private life.
General Electrics is one of the biggest companies in the world. The fact that over the last 30 years it developed and bought a lot of other small companies and ended up in businesses from aircraft engines and power generators to plastics, medical, and financial services, is due in great part to Jack Welch and his vision.
CEO’s SELF-CONFIDENCE / STRAIGHT FROM THE GUT
Creating a big company with a heart and a soul.
He realized that he could do anything and transform every business into success, as long as he had by his side the right people.
Becoming a CEO was not on Jack’s agenda from the start. But after working a few years with General Electrics, he realized that he really enjoyed his work and he wanted to climb the ladder as high as possible.
Even though he was not one of the top favorites for the position, the fact that he had a vision and he had good instincts helped him get the job. He was not always right about his decisions. Some deals were not profitable at all.
You may say it was like a game of trial and error until he developed a strategy. That he could see a good deal from the beginning of the negotiations.
Jack Welch understood that being a CEO is more about having a vision and being a leader for the thousands of people that work for you. Having such a large company, it was difficult to create a culture that helped everyone feel like a part of the team and feel connected.
This is why Jack invested a lot in training, creating facilities for conferences and meetings. Even if he had to let go some of the employees, he continued to invest in things that on the long term made all the difference. Jack understood from the beginning that it’s all about the people:
“It is a job that’s close to 75 percent about people and 25 percent about other stuff. I worked with some of the smartest, most creative, and competitive people in the world— many a lot smarter than I was.”
So he created and entire culture around these people.
He wanted to work only with the best and make them feel appreciated and welcomed in GE.
In order to do this, he had to be very drastic about the differentiation system:
“I learned the importance of people, supporting the best and removing the weakest.”
He implemented an evaluation system that the managers had to apply in every company that was part of General Electrics.
Based on the evaluation, all the people that scored in the bottom 10% had to be removed from the company. It was hard, especially because at first the managers refused to cooperate and were offering misleading results. But in the end everyone understood that on long term, this is the only way that General Electrics could stay on top.
Another thing that Welch did not like in General Electrics and that he struggled a lot to change, was the high level of bureaucracy:
“A package of paper would arrive on my desk for a signature to buy something like a $50 million mainframe computer. In some cases, 16 other people had already signed it, and my signature was the last one required. What value was I adding?”
His vision was not always supported by his colleagues. And many times there were stories in media about his controversial decisions.
After 20 years as the head of GE, he took the company to a whole new level.
He was not afraid to invest in new things and to change the status quo of the company:
“People would always say to me, “How can you own NBC? You don’t know anything about dramas or comedies.” That’s true, but I can’t build a jet engine or a turbine, either. My job at GE was to deal with resources—people and dollars. I offered as much (or as little) help to our aircraft engine design engineers as I offered to the people picking shows in Hollywood.”
Jack’s vision was to create a big company with a heart and a soul. A company that had the best people and really cared about them.
The prerequisite? Even if at some point you stopped working for GE for whatever reason, you would be equipped with the right skills in order to find another job fast:
“We’d do everything to give them the skills to have “lifetime employability,” even if we couldn’t guarantee them “lifetime employment.”
Jack Welch is considered a guru when it comes to building a great culture for such a large company.
If you are entrepreneur, a leader or you may just aspiring to be any of these – you’ll find Jack Welch’s book really inspiring. You can benefit from reading this book because is teaching you how to stick to your vision even if you are the only one that believes in it. And it also teaches you the importance of having a great team and motivating it.
Being a CEO is not about dealing with a lot of administrative stuff and sitting in an office all day long. It’s about connecting with people, listening their ideas and finding ways of giving your employees a voice.
Maybe someone has a brilliant idea, but because of the bureaucracy and the multilevel system you implemented, that idea can never reach you:
“For 25 years,” he said, “you’ve paid for my hands when you could have had my brain as well—for nothing.”
The book may seem very detailed and sometimes you may find the amount of information about different deals and acquisitions overwhelming. But this remains a very important reading for all those that work with people and are in top positions in big companies.
Jack’s vision can inspire you and guide you in this world where most of businesses think only about profit. You have to think about the people and the quality of your products and services, and the profits won’t be unpredictable
One of the most interesting chapters for me was towards the end of the book, where the author describes the selection process for the new CEO.
It’s not like any ordinary job interview. It takes years to find the best candidates and to analyze them as they go through different challenges. You send them to supervise new divisions, you take them out of their comfort zone and eventually, you have to pick only one. And sometimes you don’t pick the right person. You’ll choose the person that your gut tells you that would fit best in this position.
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