What I Learned from Jack Welch

Posted 03.04.2020

One of the most memorable moments of my professional life was the first time I got to present from the Pit. (The picture that accompanies this post is me in that moment from 2013.)

In case you’re not familiar with it, the Pit is the well at the bottom of an amphitheater style room that seats about a hundred people on GE’s Crotonville leadership development campus in the Hudson River Valley. Back in the day, GE’s CEO Jack Welch used to hold forth from the Pit for three or four hours at a stretch leading a spirited back and forth with the high potential leaders in the company’s flagship Management Development Course (MDC). As a young manager and executive, I (like millions of other corporate leaders back then) used to consume everything I could about Welch and how he led GE. A work friend of mine with connections to GE corporate arranged for Welch to sign and autograph his photo for me which I proudly displayed on the bulletin board behind my desk. I was a total Welch geek and must have read at least a dozen stories about Jack teaching, prodding and goading his proteges from the Pit.

Flash forward 15 years or so later and there I was standing in the Pit as a guest speaker to a roomful of high potential leaders in the MDC. With everything I had read about Jack over the years streaming through my brain, it felt like I was standing on hallowed ground.

You’ve probably read that Welch passed away this week at the age of 84. Since he retired almost 20 years ago, GE has been through some radically tough times and is in the process of bouncing back under the leadership of Larry Culp, the company’s third CEO since Welch. In retrospect, Welch’s legacy at GE looks mixed but that doesn’t change the fact that I indirectly learned a lot from him when I was developing as a corporate leader that served me, my teams and my companies’ well.  His death has prompted me to reflect on those lessons and I’ve concluded that many still hold up.

Here are three top of mind examples of what I learned from Jack Welch along with some reflections on how he shaped the way I lead and the way I now advise leaders:

CEOs Have Two Main Jobs: Welch used to regularly say that his role as CEO came down to two main jobs – resource allocation and developing people.  I learned in Econ 101 at Davidson College that economics is essentially about the division and allocation of scarce resources. That was how Welch saw his first job at GE – making the final calls on where the company would place its biggest bets. His second job was to make sure that the company was systematic and strategic in developing the people who could execute on those bets. Part of that development was through Crotonville programs like MDC but most of it was through developmental assignments that stretched people beyond what they initially thought they could do. By all accounts, Welch invested his personal time in alignment with those two jobs. That was a big takeaway for me. Senior executives vote with their time and attention. Where they spend it is predictive of what gets prioritized and done by the organization.

Use Your Calendar as a Strategic Lever: In 1998, Business Week ran a cover story by John Byrne titled How Jack Welch Runs GE. I practically committed that article to memory back then and for years shared it with colleagues and clients. Looking back on it today, I smiled to see that it begins with a scene of Welch in the Pit speaking to an MDC class. What really grabbed me about the piece when it first ran, though, was a high-level summary of how Welch structured his annual leadership calendar to focus on his two biggest jobs of resource allocation and people development. There was a rhythm that Welch and his top leaders followed to make sure that their time and attention was leveraged to allocate the available resources and develop the people to achieve the strategic objectives. The calendar used key meetings throughout the year as a forcing function to focus top leadership’s attention and drive strategic decisions. It’s long been said that time is money. The way Welch used his leadership calendar showed me that time is also outcomes.

Make Change Systematic: In 1993, Noel Tichy and Strat Sherman wrote a book about Jack Welch and GE called Control Your Destiny or Someone Else Will. I devoured that thing multiple times and constantly went back to it for ideas on how to do my job as a new executive charged with leading change.  Welch was constantly driving change at GE through big and revolutionary strategic initiatives. The book made the point that Welch noted that successful revolutionaries in history quickly moved to control three things: the police, the media and the schools. For Welch, the police at GE were the corporate audit staff. Historically, the GE audit staff were the rules enforcers that everyone else tried to avoid. Welch turned them into a group of internal consultants charged with spreading best practices throughout the enterprise. Welch’s media was GE’s internal communications function. He was masterful at coming up with brief and memorable strategic themes that drove multi-year agendas for the company. The comms team drove and reinforced those themes on a granular basis day after day. And, the schools at GE converged around Crotonville and the leadership development programs and systems that emanated from the campus. Put your versions of those three – police, media and schools – together and you’ve got a good handle on the tools you’ll need to drive change in a systematic way.

Was Jack Welch a perfect leader and perfect person? No, none of us are. He was a product of his era and did and said things that would never stand up today. He made his share of mistakes that proved out both during and after his time as CEO. None of that means, though, that Jack Welch didn’t make a difference and develop a whole lot of people who went on to lead great things. Even though I never met the man, I learned a lot from him and am grateful for that and to have had the opportunity to stand where he stood. Rest in peace, Jack.

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