Lead by Energizing Others (The Welch Way)

Manage by Authority
Lead by Energizing Others

When Welch became CEO, the system of management in place, commonly reffered to as "command and control," was the same system that large corporations had used for years. That system had evolved from the military, which relied on rank and title to determine authority.

When Welch became CEO, GE was full of managers who felt that "command and control" was the best way to run a large company.

After all, without all those managers barking orders to workers, how else could a large corporation get things done?

But Welch found a better way. He did not think that the best way to lead was by whet he called "the stripes on your shoulder." He had many words to describe his leadership ideal, including "Boundaryless," the word he created to describe an open organization free of bureaucracy and anything else that prevented the free flow of ideas, people, decisions, etc.

He felt that genuine leadership came from the quality of one's vision, and the ability to spark others to extraordinary performance.

The best managers do not lead by intimidation ("I am the boss and you will do what I say"), they lead by inspiring others to want to perform ("here's my vision for what we can become, and here's one way you can help make it a reality").

The Welch style of leadership is particularly important in today's complex organization. Whether you are a manager or not, chances are that you depend on others to help you perform in your job. The people who help you would be more motivated if they knew the bigger picture (hw their efforts help) and that you truly appreciate their efforts.

To spark performance in others, particularly those who do not call you "boss," adopt the following Welch behaviors:

Never lead by intimidation:
Welch had no use for those who barked orders, "the autocrat, the tyrant." That was the old way to run a business.

Let others know exactly how their efforts are helping the organization:
Most everyone wants to help, but they also want to know how their actions are helping the organization achieve its goals.

Send handwritten thank-you notes to colleagues and customers:
Welch is a master at sending handwritten notes to than people. Few take the time, so it almost always has an impact.

We now know where productivity --real and limitless productivity-- comes from. It comes from challenged, empowered, excited, rewarded teams of people.

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From: Jeffrey A. Krames. The Welch Way: 24 lessons from the world's greatest CEO. New York, McGraw-Hill, 2004.
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See Change as an Opportunity (The Welch Way)

See Change as a Threat
See Change as an Opportunity

To Welch, change was simply a part of life, and certainly a part of business. He loved change and said that at his company, change was "in the blood" of its employees. How Welch felt about change, and how he got others at GE to feel about it, made an enormous difference in making the company so successful.

Most people don't like change. Welch recognized this soon after taking over the company in the early 1980s. He said that change was happening "at a much faster pace than business was reacting to it." He knew that a great deal of change would be needed to make the company great. The problem was that most people at GE --and at other companies-- did not understand why things had to change. After all, the company seemed to be doing fine.

But Welch was one of the first business leaders to "face reality." To create the company he envisioned, Welch would have to change just about everything: the company's focus, its products, its attitudes, behaviors, etc. Almost nothing stayed as it was, and he created a far more flexible, far more competitive organization.

The key to making a better GE was for Welch and the rest of the company to embrace change, rather that fear it. He saw change as an opportunity, not a threat (that idea was so important to him that he made it a part of GE's shared values).

In order to help your organization, and yourself, see change as an opportunity. Remember that change is a necessary thread in the fabric of life, and can bring many good things as well. Change does not always have to upset things and make things worse. In business, change is often the spark that ignites a good idea or a new business, or a revolutionary new product.

Here are some things to help you put change to work in your own work life:

Know that change is here to stay:
Always know that change is with you and will never leave. If you accept that, and use it, you can gain an edge over those who do not know how to deal with change.

Expect the least expected, and move quickly to stay a step ahead:
Not even Welch saw most of the things that would confront GE (e.g., the Internet). Often the difference between success and failure is getting a jump on things while competitors are regrouping.

Prepare those around you for the inevitable change that will affect their lives:
Not only do you have to be prepared, so do the people around you. Talk about change in a positive light so people don't fear it. Speak of it as an opportunity, not a threat.

The game is going to change, and change drastically.

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From: Jeffrey A. Krames. The Welch Way: 24 lessons from the world's greatest CEO. New York, McGraw-Hill, 2004.
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Simplify (The Welch Way)

Make Things Complex
Simplify

Jack Welch did not think business had to be complicated. To him, keeping things simple was one of the keys to business. He said that his goal was to "de-complicate everything we do and make at GE."

He often said that as long as people had access to the same information, they would almost always come up with the same answer to any problem put before them. "This is not rocket scientist work," he declared more than once.

Welch felt that simplicity requires "enormous self-confidence." Welch felt that confidence is one of the other vital ingredients of any learning organization, and that like simplicity, it thrives in an informal arena. Many of his signature programs and initiatives were specifically designed to make GE a simpler organization.

The roots of Welch's desire for simplicity can be traced back to his early days at the company. When he started, he worked in a small plastics lab, in which he was one of a very small, yet nimble, team. In that setting, simplicity ruled, and bureaucracy was nowhere to be found.

Instead of battling bureaucracy, Welch and his colleagues focused on competing, building business, creating new products, and all of the other things that Welch loved about business. Those early days showed him that business could be exciting, yet simple, and did not have to be filled with jargon and complexity. He spent most of the next four decades instilling that brand of excitement and simplicity back into the "big body" of GE.

Anything that you can do to make your organization simpler would take it one step closer to the Welch ideal:

Simplify the workplace:
Most organizations have far too many complicated forms, processes and ways of doing things. Identify those that waste the most amount of time, and work with colleagues to eliminate or streamline them.

Make meetings simpler:
When Welch met with his business leaders, he made sure to have no complicated minute-by-minute agenda. Instead, he encouraged his managers to simply tell him the best ideas they have come up with n the last 90 days.

Eliminate complicated memos and letters:
Welch had no use for complicated memos, preferring simple, handwritten notes. He felt that communication should be filled with ideas and simplicity, not complexity and jargon.

You can't believe how hard it is for people to be simple, how much they fear being simple... Clear tough-minded people are the most simple.

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From: Jeffrey A. Krames. The Welch Way: 24 lessons from the world's greatest CEO. New York, McGraw-Hill, 2004.
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Face Reality (The Welch Way)

Assume Everything is Fine
Face Reality

Jack Welch said that business, like life, boils down to one thing: facing reality, and then making the right decisions based on that reality, and then making the right decisions based on that reality. To him, there was no more fundamental --or important-- concept than this one.

The roots of Welch's "face reality" edict can be traced back to his childhood. Welch's mother always urged her son Jack "not to kid himself," to see things as they are, and not as he wished them to be.

Welch never forgot that enduring lesson, and it played an invaluable role in his success.

When Welch became CEO, most people thought that GE was in great shape. Although it was voted top company in America, Welch saw a company in trouble: one that had lost much of its market value, and one that was sinking under the weight of its own bureaucracy.

Although most thought that he should respect the company and its history, Welch decided to "start a revolution" and reinvent the company from top to bottom.

At the heart of welch's revolution is his "face reality" decree. From his very first day as CEO, he made sure always to see things as they truly were. He never fooled himself into thinking that things would just get better on their own. Once he recognized the reality, he launched strategies and initiatives that helped make things better. When he determined that many of GE's businesses, and laid off more that 150,000 workers.

Facing reality often means saying and doing things that are not popular. After all, who wants to hear that business is bad, or that things won't get better? But Welch felt that only by coming to grips with reality would things begin to get better. So the next time a boss or colleague says, things just have to get better if we just stay the course, consider telling that person to face reality. That's how Jack Welch turned an aging bureaucracy into the world's most valuable corporation.

Here are some ways to make sure that you don't "kid yourself," which might help you to see things as they are:

Look at things with a fresh eye:
Sometimes people are too close to things to see the truth. To get perspective, look at your situation as an outsider might. Start with a blank piece of paper and jot down the realities of the situation you are assessing. This might help you to see things in a more detached manner.

Don't fall into the "false scenarios" trap:
Many people in business just assume things will get better. That could be a trap. Don't make up scenarios based on wishes. You must face the truth. What can we do if things don't get better?

Leave yourself with several options:
The best time to change is when you want to, not when you have to. In assessing situations, construct several scenarios based on different outcomes. Always have a "plan B" if things do not go as planned.

How do you bring people into the change process? Start with reality... When everybody gets the same facts, they'll generally come to the same conclusion.

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From: Jeffrey A. Krames. The Welch Way: 24 lessons from the world's greatest CEO. New York, McGraw-Hill, 2004.
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Blow Up Bureaucracy (The Welch Way)

Tolerate Bureaucracy
Blow Up Bureaucracy

Welch has always hated bureaucracy. To him, bureaucracy is the enemy. Bureaucracy means waste, slow decision making, unnecessary approvals, and all the other things that kill a company's competitive spirit. He spent many years battling bureaucracy, trying to rid GE of anything that would make it less competitive.

Welch felt that ridding the company of bureaucracy was everyone's job. He urged all of his employees to "fight it, kick it." That's why "disdaining bureaucracy" became such an important part of GE's shared values (the list of behaviors that were expected of all GE employees).

When a young college student asked Welch what he should do when he encounters bureaucracy in a large corporation, the GE chairman advised him to "get a hand grenade...and blow it up" (he meant that figuratively, of course). He felt that it is everyone's job to at least try to rid the organization of wasteful bureaucracy.

But isn't that easier said than done? Yes, even organizations that do a good job of eliminating this cancerous element can't kill it permanently.

That's why Welch called bureaucracy "the Dracula of institutional behavior," because it had a way of rising from the dead every few years.

Anything that you can do to simplify, remove complexity and formality, and make the oerganization more responsive and agile, will reduce bureaucracy:

Drop unnecessary work:
Most organizations have far too many rules, approvals, and forms. Work with colleagues to figure out which of these old ways of doing things can be either eliminated or improved.

Work with colleagues to streamline decision making:
If it takes a company a week to make a decision, the process needs to be simplified.

If no one can remember why your company does something a certain way, chances are that it is more complicated than it needs to be.

Make your workplace more informal:
Send handwritten notes instead of memos (Jack loves handwritten notes, and it is "Jack," not "Mr. Welch"), keep meetings conversational (rather than formal and rigid), and encourage dialogue up and down the corporate ladder.

The way to harness the power of these people is not to protect them... but to turn them loose, and get the management layers off their backs, the bureaucratic shackles off their feet and the functional barriers out of their way.

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From: Jeffrey A. Krames. The Welch Way: 24 lessons from the world's greatest CEO. New York, McGraw-Hill, 2004.
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Get Less Formal (The Welch Way)

Get More Formal
Get Less Formal

For many years, most companies were run like the army. There were "uniforms" (white shirts, blue suits), strict rules ("punch the clock by nine, never leave before five"), and a rigid chain of command that dictated who was in charge. Generals did not have to speak to the privates, even though it was the privates who did most of the work.

Welch thought that such formality got in the way of achieving great things. He said that th epart of the GE story that had yet to be told was the power of GE as "an informal place." No one called him "Mr. Welch," it was always "Jack." He left his tie at home more often than not, held informal meetings, and encouraged everyone to lighten up.

"Boundaryless" (i.e. Welch's open organization, free of walls) thrives in an informal arena. Without needless rules, titles, and approvals, people are not afraid to voice their ideas, even if they go against conventional company wisdom. Since new ideas are the lifeblood of business, keeping formality and rigidity out of the office was one of the keys to GEs success.

For example, when Welch found out that managers were not talking or listening to employees, he decided to do something about it.

That's when he created Work-Out, the process that in essence turned the company upside down, so that the workers told the bosses what to do. That was a revolutionary thought in the late 1980's, and forever changed the way people behaved at the company.

But that was Welch. He was the head of a huge corporation. How can the rest of us possibly have that kind of an impact on our company?

Here are a few ways to make your workplace more informal:

Brainstorm with colleagues and bosses:
Find simple ways to loosen things up (more relaxed dress code, flexible work hours, etc.)

Hold more informal meetings:
Lighten up meetings by asking your staff to "run" the meeting, and suggest "a no notes allowed" meeting as well.

Consider a once-in-a-while informal get together:
Suggest that whole departments get together for a pizza lunch or an after-work meal with spouses and significant others.

You must realize how important it is to maintain the kind of corporate informality that encourages a...training class to comfortably challenge the boss's pet ideas.

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From: Jeffrey A. Krames. The Welch Way: 24 lessons from the world's greatest CEO. New York, McGraw-Hill, 2004.
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Lead (The Welch Way)

Manage Lead

Jack Welch is all about leadership, not management. he doesn't even like the word "manage." To him, the word "management" conjures up all of the negative things that people associate with managing, such as "controlling, stifling people, keeping them in the dark." Welch loved to lead. He loved to create a vision and then get people so passionate about what they were doing that they couldn't wait to execute his plan. That's what a genuine leader is, said Welch. Someone who could express a vision and then get people to carry it out.

And Welch did not think that executives or CEOs had a monooly on leadership --or good ideas, for that matter. To him, anyone could be a leader, just so long as they contributed, and the most meaningful way for anyone to contributed, and the most meaningful way for anyone to contribute was to come up with good ideas. Welch once said, "th ehero is the person with a new idea." To him, there is simply nothing more important to an organization than expressing ideas and creating a vision.

At GE, he created an enterprise that made new ideas the lifeblood of the organization, the fuel that made the gigantic GE engine run. He said that if the company had to rely on him for all of its good ideas, "the place would sink in an hour." While many business leaders talk a good game on the subject of leadership, Welch lived it. He created a vison for his company ("world's most competitive enterprise") and spent more than two decades igniting the organization to make his vision a reality. He had great energy, competitive spirit, and the ability to spark excitement and achieve results, and searched for leaders who had those same qualities.

Here are things you can do to raise your Welch Leadership Quotient:

Articulate a vision, and spark others to execute it:
That was the essence of leadership, said Welch. Anyone who could express a vision and then get others passionate about making it happen could be a leader.

Don't manage every excruciating detail:
Leaders know that it is their job to see the big picture. Don't get caught up in managing minutiae. Surround yourself wih great people and trust them to do their jobs.

Involve everyone and welcome great ideas from everywhere:
Since business is all about getting the best ideas from everyone, be sure to leave no one out. It just might be the quietest person on your team who is sitting on the best idea.

What we are looking for... are leaders at every level who can energize, excite and inspire rather than enervate, depress, and control.

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From: Jeffrey A. Krames. The Welch Way: 24 lessons from the world's greatest CEO. New York, McGraw-Hill, 2004.
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