I was saddened to hear of the recent passing of one of the business greats. Jack Welch was the former chairman and CEO of General Electric. Under his leadership, GE became the world’s biggest company by market cap in 1999. Many management students — myself included — learned the importance of managing a business using data from how Jack ran GE.
The death of Jack Welch prompts a question: What kind of legacy did he leave behind?
Much has been written about Jack Welch and his success leading GE. Many of Jack’s senior lieutenants went on to run some of America’s biggest firms. And yet, not long after he retired in 2001, questions arose about his accounting methods. And then, during the ’08/’09 financial crisis, the once mighty GE Capital threatened to bring down the entire company.
Jack Welch was also focused on winnowing out poor-performing businesses and employees. Some notable Jack quotes include: “You got to be rigorous in your appraisal system. The biggest cowards are managers who don’t let people know where they stand.” and “My main job was developing talent. I was a gardener providing water and other nourishment to our top 750 people. Of course, I had to pull out some weeds, too.”
As we’ve entered a faster-paced, more digital era, there have been challenges at GE. But my own research on digital transformation suggests that many of the lessons Jack preached remain valid, such as hiring great talent and empowering them to lead. Indeed, many of the most successful companies today are running extremely flat management structures and empowering employees to innovate and learn quickly.
It seems to me that applying many of Jack’s lessons, especially with regards to being customer-obsessed, will stand firms in good stead for future growth in the digital age. Here are some of my favorite quotes of his that still resonate today:
- In order to lead a country or a company, you’ve got to get everybody on the same page, and you’ve got to be able to have a vision of where you’re going.
- It goes without saying that no company, small or large, can win over the long run without energized employees who believe in the mission and understand how to achieve it.
- Trust happens when leaders are transparent.
- Too often, we measure everything and understand nothing. The three most important things you need to measure in a business are customer satisfaction, employee satisfaction, and cash flow. If you’re growing customer satisfaction, your global market share is sure to grow, too. Employee satisfaction gets you productivity, quality, pride, and creativity. And cash flow is the pulse — the key vital sign of a company.
- Our behavior is driven by a fundamental core belief: 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.
- There are only two sources of competitive advantage: the ability to learn more about our customers faster than the competition and the ability to turn that learning into action faster than the competition.
- Strategy is simply resource allocation. When you strip away all the noise, that’s what it comes down to. Strategy means making clear-cut choices about how to compete. You cannot be everything to everybody, no matter what the size of your business or how deep its pockets.
- Business is a game, and as with all games, the team that puts the best people on the field and gets them playing together wins. It’s that simple.
- The most important job you have is growing your people, giving them a chance to reach their dreams.
- Any company trying to compete . . . must figure out a way to engage the mind of every employee.
- A leader’s role is not to control people or stay on top of things but rather to guide, energize, and excite.
- Companies don’t give job security. Only satisfied customers do.