Jack Welch worked for me
by Orrin Klopper
As the managing director of a developing IT support company with a strong entrepreneurial and high energy culture, I found Jack Welch’s book, “From the Gut”, an awesome inspiration.
Personally I find management books rather boring, but Jack Welch’s book is filled with personality, passion and fire, and it is through this medium that any manager or CEO can pick up many useful tips, no matter the size of their organisation.
There are three particular learnings from the book that I have implemented in my company and the results have been phenomenal.
The first, and probably the most profound tip Jack Welch gives, is firing your bottom 10%. Our management team sat down and went through all our staff and isolated what we called dead wood and non-performers (I in turn did the exercise on our management team). We tried to add an element of attitude and various other subjective measures to make the rankings fair.
After the exercise, approximately 8 out of 40 staff members either resigned or were dismissed. It had an enormous impact on the business. One of our regional branches did a full 180 degrees turn in two months. We replaced most of the staff using a new recruitment procedure that was not in place when the original staff were hired. It also sent a very serious message through the organisation: that we were very serious about our performance culture and that we would not carry anyone.
The second learning that I have implemented is a typical “Jack Welch” measurement criterion that is now included in all our line management meetings. When reading the book it is very clear that one of the key success factors in Jack Welch’s career was the fact that, in his career at GE, from his first day to his last, he was anti-bureaucracy, impatient and entrepreneurial. He instilled small business fire and passion into one of the largest companies in the world. He measured this in what he called the the 4 Es:
* Energy – does the manager have high energy levels?
* Energise – does the manager energise those around him/her?
* Execute – does the manager deliver?
* Edge – can the manager make tough yes-no decisions?
We ran this exercise during an internal strategy session where each member of our management team had to rate all the other members out of 10 according to each criterion. The results were very enlightening.
Finally, in the chapter, “What this CEO thing is all about”, Welch gives an excellent list of tips that I found very useful.
One specific tip he gives is to encourage staff and the company as a whole to ask themselves, “Are you celebrating enough?” Far too many people go through their entire lives never really celebrating their achievement and victories at work. This relates to advice from another book I read, Gung-ho, by Ken Blanchard and Sheldon Bowles. I think it is an awesome concept. Use every achievement and victory as an opportunity to celebrate – from birthdays to closed deals.
We do, and it works for us.
Orrin Klopper is managing director of netsurit. He can be contacted on mailto:firstname.lastname@example.org
Other responses from Jack Welch’s readers:
Alan Tamaris, Dartex (Pty) Ltd
I only wish I had read Welch’s book 20 years ago. I fully believe in his philosophy. And I am a director of one firm with such excellence of (executive) employee that it is truly a stimulating experience to attend a Board Meeting and debate with them. Their philosophy is that in the event an executive should leave (rare) this represents an opportunity to replace him with someone even more proficient.
Unfortunately, especially in this country where we have such a drastic shortage of talent, it often the case that one deals with an executive who has risen to the level where he has become incompetent. And in the smaller business where excessive salaries are unavailable, it may be difficult to attract and retain excellence.
Gary Bryant, Unilever
I would imagine that the majority of people who join GE, actually want to work there and are made aware of the policy on performance. If they don’t agree with it, then they wouldn’t join the business. With regard to waste on human resource: They have to train everyone to see if they have the potential, given the tools, to succeed at GE. Yes 10% of the people they train are fired, but again what would the natural attrition rate be and how many would be lost in this manner? They are also making sure that the very best talent rises to the top of the ladder and that they are retained in most cases. As they say a fish always rots from the head. GE seems to have a fantastic management team and the results speak for themselves.