Wisdom of Jack Welch

Today, Jack Welsh is speaking here at MIT. I'm live blogging some of the nuggets of wisdom:

* The trend in environmentalism is a HUGE opportunity for capitalism. If I were a CEO today, I wouldn't even have a choice about embracing this trend. Regardless of whether it's true or not, the perception is driving consumers and must be capitalized on.

* China is a huge market, growing at 8%. The US is an enormous market growing at 3%. I'd bet on the US keeping up that growth trend. We have an incredible entrepreneurial environment driven by a free market and a powerful educational system. We need, though, to keep letting the smart people that come here to MIT in with the Visas that they need.

* The worst manager is a kind manager. "I'm too kind to tell them what I think about them." That's not good enough.

* The nice thing about a baseball team is that the statistics are up there all day. Everyone has an opinion about how everyone is doing. In the business world, the stats are less obvious but the objective is the same. Your goal is to build the best team and you need to identify the best and eliminate the worst. They have to know where they stand at all times so that when you have to let them go, they know exactly why.

* The problem of firing is this. When you fire someone, there are 2 cycles. When you release someone you're relieved, but they are pissed! They linger around the office during their severance period and become a leper. Its your obligation to treat them as well as possible AFTER you fire them, because they are going out there and will become customers or whistle blowers. You would rather have customers.

* The secret to management is this: rigorous appraisal systems and loads of training. Constantly reinforce their education with successful leaders. Candor is the most important thing we develop. Its the only way to let everyone where they stand.

* Giving rewards with intrinsic value but not great pay is a losing proposition. This is what private equity has going for it right now. Its interesting non-bureaucratic work that has great pay straight away. The compensation is outrageous, a starting Harvard MBA going into Private Equity last year made $289k. That's unbelievable money. Its causing a brain-drain for the modern American corporation.

Would you consider an offer to join us as Dean here at MIT Sloan?
* My ability to be the dean of a school where tenure exists is non-existent. My 20-30-10 just wouldn't work here.

If you were CEO of GM from 1981 till now, how would the American Auto Industry be different?
* In hindsight, its easy. Letting the UAW run your business is not good business. The job banks are outrageous, people literally show up to do nothing. This is killing the business. Would I have been smart enough to take on labor and change this? I don't know, it would be pompous to say I would but I'd like to think I would have taken them on.

* You can guarantee a 100% correlation between a union election and a horses ass.

You believe in a lot of the skills that are gained through military leadership. Do you believe that America would benefit from some type of military service requirement?
* The question started out so well, but I'm not going to tough the last part. I think doing something like that would tear this country apart. I was at West Point yesterday, though, and its an incredible environment. Applications are at the highest point ever and the students are amazing.

How would you influence people who don't like you and don't want to work for you?
* I suggest that generally spend as little time with them as possible. Why would you want to spend time with someone who doesn't like you. With these people you have a talk with them and if they don't buy onto the program and move forward with the business, shoot them. You will not have everyone liking you, so long as they are buying into the program and moving forward its okay. If they are a resistor, you can't have that -- you need to have people on the same page buying in and moving forward.

What is your take on work-life balance? Is there such a thing?
* The problem with that work is "balance." The word is choices, and you make them. You in the end make choices, and you live with them. Its not a company's job to make your choice or to make the choice easy for you. I respect all the choices you make, but no company is working to make your balance; they're dealing with your choices. If firms can't attract people with intrinsic value and pay packages, then they have other problems.

* Without face time, you're dead. If your not in the trenches, if your not there when they need you, when it comes time for the promotion, you're not going to get it. You're looking for the people who are going to be there with the team, because they get results. You think a manager is going to promote the telecommuter who they haven't seen in 12 years? Come on, quit kidding yourself with this crap.

Labels: business, Jack Welch, MITSloan