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Former GE CEO Jack Welch offers ‘winning’ advice on how to succeed in business

4/22/2005 - He’s been called everything from “Neutron Jack,” because of his relentless approach to downsizing, to “Manager of the Century,” for his ability to drive profitability at General Electric during his 20-year tenure as that company’s chairman and CEO. But to the estimated 700 Kellogg School students, faculty and staff who packed Owen L. Coon Forum April 22 to hear Jack Welch speak, giving him a standing ovation after an hour-long discussion of his new book, Winning, he clearly represented something of a hero.

Speaking in his trademark frank, occasionally pointed style, Welch, 69, shared business expertise culled from his 20 years as GE’s top executive and a 40-year career at the company. In particular, he spoke about the insights gained from talking to workers at all levels whom he met during his recent three-year trip around the world following publication of his 2001 autobiography, Jack: Straight from the Gut. His presentation addressed questions submitted by Kellogg students and asked onstage by Nathan Lucht ’06, president of the Kellogg Student Association.

“The people I met when traveling asked me what it takes to be a good boss and about promotions, strategies and budgets,” Welch said. “My last book was about me. This book is about them.”

Jack Welch, Former Chief Executive Officer of General Electric Co 04/22/05
In Winning, co-authored with his wife and former Harvard Business Review editor Suzy, Welch explains his business and management philosophy, including how to hire and fire people and how to use strategy, budgeting and Six Sigma — the heralded quality improvement program instituted by Motorola and adapted by GE. The book also offers career advice, something especially relevant for the mostly student audience that greeted Welch at the Kellogg School.

"Be yourself,” Welch said, calling this the best advice he ever received. “If you’re a nerd, hang around with nerds.”

He also offered his recipe for career advancement, telling the audience several times to “over-deliver” on assignments without “moaning” about the task and to think broadly about business challenges. “Don’t just fill in the boxes,” said Welch. But he cautioned against trying to advance too quickly. “Don’t wear your ambition on your forehead.” He advised MBA students to seek employment with a strong branded company, pursue an entrepreneurial venture or gain initial experience as a consultant.

“Consulting is a great place to learn, just be sure you don’t stay there too long,” he stated, noting the importance of getting “sticky” with customers and saying that “one project must lead to another.”

Defining the subject and title of his new book, Welch explained that winning is ultimately as much about others as it is about any individual. “Winning is about finding the ‘aha!’ and then getting everyone engaged about it.” Managers should “create opportunities … and an atmosphere of excitement” for other employees, he said.

Welch told the Kellogg students that getting hired by a good company should be easy for them because “you’ve gone to a great school and got a great degree.”

“You’re prepared for the workplace,” said Welch. “You should be confident in your abilities, so the last thing you want to be is cautious. Take swings like crazy and don’t let yourself become a victim.”

“Fantastic advice,” said Russell Baker ’05, outgoing vice president of speakers and workshops for the Business Leadership Club, which coordinated the event. “It’s tough for a lot of us to be willing to take risks, but Jack puts it into perspective.”

Welch said a key part of winning is hiring the right people — those who are good at what they do and therefore make the boss look good. The right people sometimes outgrow their job and move on. But “that’s fabulous,” Welch said. “Some of my former employees are running big companies and have made way for other ‘greats’ to take their place at GE.”

It’s also important to know when to let people or business lines go. This principle — Welch calls it “differentiation” in his new book — is based on his well-known “20/70/10” framework that seeks to move the top 20 percent of employees up, nurture the majority in the middle, and downsize the bottom 10 percent. In Winning, Welch cites the example of GE’s “marginally profitable” air-conditioning business that eventually was sold because it could not meet the company’s stated goal of being No. 1 or No. 2 in its market. But this sell-off, writes Welch, actually resulted in happier employees in that unit, since they now became part of a much more important team in a smaller company.

When it comes to a choice between micromanaging and delegating tasks, “err on the side of delegation,” Welch recommended. “The bigger the company, the more delegation you need to do. It makes your employees love being at the company and helps them flourish. And it gives managers a feel for who needs more attention.”

Although Welch has dispensed his advice many times before, his Kellogg presentation was as invigorating as his raspberry-hued tie. In fact, he demonstrated that he practices what he preaches: He spoke passionately about his subject, was constantly upbeat and “over-delivered” by spending 60 minutes answering questions, then logged nearly three hours chatting with students as he signed their copies of Winning, the proceeds of which will be donated to charitable causes related to inner-city education.

Demonstrating candor, another of the attributes he fervently favors, Welch related his painful decision to relinquish the apartment and plane promised to him upon his retirement from GE four years ago, because keeping them looked bad from the public’s point of view, and he “wanted to get GE out of the papers.” But he made it clear that he believed he was entitled to the perks.

He also talked about divorcing his wife for Suzy Wetlaufer (now Welch), 46. The two fell in love after she interviewed him for the Harvard Business Review; they married a year ago. Welch and his wife, who was sitting up front at the event, beamed at each other during his talk.

The man whom Fortune named “Manager of the Century” in 1999 said he now spends much of his time helping others achieve success. In addition to his speaking engagements, Welch counsels school principals at the NYC Leadership Academy, where he is also on the board of advisers.

By teaching, one also learns, said Welch. And what, he asked, could be more exciting than viewing life as an ongoing learning process?

He concluded his remarks with encouragement for the MBA graduates who would soon enter the market — and countered any complaints about the contemporary employment outlook by citing how bad things were circa 1980. The Prime Rate was 23 percent, he recalled, and unemployment figures were in the double-digits.

“If you want to talk about tough times, try that on for size,” Welch said. “This country [today] has never been in better shape … You’ve got the world by the tail — go enjoy it!”