What makes jack welch a great leader

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Spencer Stuart uses cookies that are essential for this site to function well. Learn about our use of cookies and collaboration with trusted partners in our Cookie Policy. This week marked the passing of one of the most iconic CEOs of the modern business era. I was blessed with the opportunity to spend more than half of my two-decade GE career working in the Jack Welch-led GE. I, like many GE alumni, were exceptionally fortunate to be part of that team.

We all learned a lot from Jack, and while I suspect many of my fellow alumni have their own take on what they learned from him, here are six of the most valuable lessons that have stayed with me throughout my career. Lesson 1: The value of a meritocracy In every type of organization, there are a small percentage of exceptional performers. These exceptional performers must be rewarded differentially to ensure that they continue to push the envelope of high performance. Similarly, while not easy, leaders must aggressively manage poor performers as well.

Rare is it that a CEO today regrets moving too quickly on poorly performing subordinates. This differentiation both at the top and bottom is the fuel for talent engagement and motivation, not to mention better business results. Top Stocks. Your Privacy Rights. To change or withdraw your consent choices for Investopedia. At any time, you can update your settings through the "EU Privacy" link at the bottom of any page. These choices will be signaled globally to our partners and will not affect browsing data.

We and our partners process data to: Actively scan device characteristics for identification. I Accept Show Purposes. Your Money. Personal Finance. Your Practice. Popular Courses. Business Leaders CEOs. Article Sources. Investopedia requires writers to use primary sources to support their work. Our corporate staff no longer just challenges and questions; it assists. This is a mind-set change; staff essentially reports to the field rather than the other way around.

People are not lousy, period. Staff people, whom I prefer to call individual contributors, can be tremendous sources of added value in an organization.

But each staff person has to ask, How do I add value? How do I help make people on the line more effective and more competitive? In the past, many staff functions were driven by control rather than adding value. Staffs with that focus have to be eliminated. They sap emotional energy in the organization.

As for middle managers, they can be the stronghold of the organization. But their jobs have to be redefined. They have to see their roles as a combination of teacher, cheerleader, and liberator, not controller. That certainly makes the organization chart more simple—you now have 14 separate businesses reporting directly to you or your two vice chairmen. How does the new structure simplify how GE operates on a day-to-day basis? Cutting the groups and sectors eliminated communications filters. Today there is direct communication between the CEO and the leaders of the 14 businesses.

We have very short cycle times for decisions and little interference by corporate staff. A major investment decision that used to take a year can now be made in a matter of days. For two days every quarter, we meet with the leaders of the 14 businesses and our top staff people. We share ideas and information candidly and openly, including programs that have failed. The important thing is that at the end of those two days everyone in the CEC has seen and discussed the same information.

The CEC creates a sense of trust, a sense of personal familiarity and mutual obligation at the top of the company. We consider the CEC a piece of organizational technology that is very important for our future success. People always overestimate how complex business is. Most global businesses have three or four critical competitors, and you know who they are. You mentioned review systems. We had them each prepare one-page answers to five questions: What are your market dynamics globally today, and where are they going over the next several years?

What actions have your competitors taken in the last three years to upset those global dynamics? What have you done in the last three years to affect those dynamics? What are the most dangerous things your competitor could do in the next three years to upset those dynamics? What are the most effective things you could do to bring your desired impact on those dynamics? Five simple charts. After those initial reviews, which we update regularly, we could assume that everyone at the top knew the plays and had the same playbook.

Fourteen businesses each with a playbook of five charts. That means we should be able to act with speed. Probably the most important thing we promise our business leaders is fast action. Their job is to create and grow new global businesses. Our job in the executive office is to facilitate, to go out and negotiate a deal, to make the acquisition, or get our businesses the partners they need.

Take the deal with Thomson, where we swapped our consumer electronics business for their medical equipment business. We were presented with an opportunity, a great solution to a serious strategic problem, and we were able to act quickly. Conceptually, it took us about 30 minutes to decide that the deal made sense and then a meeting of maybe two hours with the Thomson people to work out the basic terms.

We signed a letter of intent in five days. We had to close it with the usual legal details, of course, so from beginning to end it took five months. Thomson had the same clear view of where it wanted to go—so it worked perfectly for both sides. Another of our jobs is to transfer best practices across all the businesses, with lightning speed. Staff often put people all over the place to do this.

Business leaders do. But we want to know what the details are so we can see which programs are working and immediately alert the other businesses to the successful ones. When you take out layers, you change the exposure of the managers who remain. They sit right in the sun. We now have leaders in each of the businesses who own those businesses.

Eight years ago, we had to sell the idea of ownership. Today the challenge is to move that sense of ownership, that commitment to relentless personal interaction and immediate sharing of information, down through the organization.

From an organizational point of view, how are the 14 businesses changing? Are they going through a delayering process? Are their top people communicating as the CEC does? The CEC concept is flowing down as well.

For example, each of the businesses has created its own executive committee to meet on policy questions. These committees meet weekly or monthly and include the top staff and line people from the businesses.

Everyone in the same room, everyone with the same information, everyone buying into the targets. Each business also has an operations committee. This is a bigger group of maybe 30 people for each business: 5 staffers, 7 people from manufacturing, 6 from engineering, 8 from marketing, and so on. They get together every quarter for a day and a half to thrash out problems, to get people talking across functions, to communicate with each other about their prospects and programs.

You see, I operate on a very simple belief about business. If there are six of us in a room, and we all get the same facts, in most cases, the six of us will reach roughly the same conclusion. And once we all accept that conclusion, we can force our energy into it and put it into action.

We each get different pieces. She has no experience of running a retailer — can she listen as well as preach? The news for regional jobs in Britain was not good last week. The collapse of Flybe will have severe consequences for economic prosperity in smaller communities, with about 2, jobs at risk at the regional airline.

Barclays announced last week it would close a major office in Leeds, with the outright loss of more than jobs. Both of these developments over the past week are instructive of a wider trend in Britain, the most unequal country for regional prosperity among large wealthy nations. The news adds to a disappointing trend since the financial crisis, as the bank has effectively halved the size of its workforce to about 70, Thousands of regional roles have vanished.

Banks and other big firms have offshored regional British jobs to eastern Europe, India and elsewhere, under pressure from shareholders to boost their profits at the expense of local communities. Virgin Money — which has merged with the soon-to-be rebranded Clydesdale and Yorkshire Bank — is in the process of sacrificing roles and 52 branches on the altar of shareholder value.