A few days ago, I was visiting with my friend Kelly at work and noticed a quote on the whiteboard in her office.
“If you pick the right people, give them the opportunity to spread their wings and put compensation as a carrier behind it, you almost don’t have to manage them.” — Jack Welch
Jack Welch, former Chairman and CEO of GE for 20 years, had an innovative management style during his tenure and remains an inspirational business figure today. His willingness to embrace change, hire the best people, give them room to operate, and provide them with what they need to be successful helped him take GE from a market value of $14 billion to more than $410 billion.
Reinvent and create a culture of learning
Jack’s goal was to make GE “the most competitive enterprise”. When he took the reigns of GE, he knew it would take a revolution to transform his dream into reality. The Corporate America business model in 1980 hadn’t changed in decades. Workers worked, managers managed, and everyone knew their place. Outdated processes, forms, paperwork, and bureaucracy ruled. Jack revolutionized the way GE functioned, got rid of the old way of doing things and reinvented the company from top to bottom. He coined countless famous quotes and put several new ideas into practice – including creating a culture of learning and what he called a boundaryless organization.
Pick the right people
Jack had no problem in this arena. He was known to fire the bottom 10% of his managers every year and reward the top 20% with bonuses and stock options. He expanded the stock options program to include nearly one third of all employees as opposed to just executives. He took care of the employees he had, and if they didn’t perform or they weren’t team players, he got rid of them. Jack was even known as “Neutron Jack” in the 1980s, referring to his reputation of eliminating employees in entire buildings like a neutron bomb.
Give them the opportunity to spread their wings
A boundaryless organization is one in which all bureaucracy is removed – anything that prohibits the free flow of ideas, people, and decisions. Jack believed that boundaries within a company stifled the flow of information and ideas among employees. Boundaryless organizations seek to overcome these limitations, and have an increased ability to respond quickly, creatively, flexibly, and in an integrated fashion to market demands. Jack believed that close supervision, control and bureaucracy killed the competitive spirit of the company. He was once quoted as saying, “We are constantly amazed by how much people will do when they are not told what to do by management.” He believed in managing less and leading more – creating vision and empowering people to make their own decisions.
Jack was successful at getting his employees to embrace these ideas. Under his tenure, GE become the most valuable and largest company in the world. His leadership style has been regarded as the most innovative of his time, and fortune magazine named him “Manager of the Century” in 1999. Jack hired rock star employees, empowered them to make decisions, gave them the room to spread their wings, and compensated them for their success.
