Jack: American Badass

I'll forgive you if you thought this post was about Jack Bauer. I just hope Jack Bauer will forgive me for not writing about him this one time. I'd hate to be the one to disappoint Jack because bad things happen when you cross Jack... things far worse than if you cross Chuck Norris.

No, the Jack I'm talking about is none other than Jack Welch, the retired chairman and CEO of General Electric. My brother and I went to see him speak on Thursday in front of a full capacity crowd at the MIT Sloan School of Management.

To say that Jack Welch is a legendary figure in the business world would be like saying that Ron Burgundy is kind of a big deal. During Welch's tenure (1981-2001) at GE, the company's market value grew from $13 billion to $400 billion. His management innovations in those 20 years indisputably made him one of the most influential CEOs of his era.

So what was it like to sit in the presence of such an icon?

Amazingly instructive. At 72, Mr. Welch exuded the authority and charisma one would expect of someone of his stature. But what genuinely surprised me was his candour and passion before the audience, and how he just let loose when broaching several topics. During the Q&A session, for example, he'd focus his laser like eyes on the audience members who asked him a question and give them rapid-fire answers that were blunt, and straight from the gut. There was no grandstanding. Mr. Welch--in his unreservedness--addressed audience members in the auditorium just as he would have been addressing them in his own office or, more appropriately, at a sports bar in front of a couple of beers, watching the Sox.

Mr. Welch was asked to opine on many things during the session. I'll try and do justice to some of his answers by paraphrasing:

On leadership: According to Jack Welch, a good business leader is someone who can excite people, and motivate them while making expectations very clear. Candour rates very high. He rebuked the notion of hands-off approaches when grooming talent, and reiterated that good leadership distinguishes itself by letting people know where they stand, at all times. Famous for instituting a policy at GE of rewarding the top 20% and weeding out the bottom 10% performers--and perhaps more famous for having made more severe cutbacks during his tenure, earning him the name "Neutron Jack" in the process--Mr. Welch claimed that a leader "has no right to leave his people in the dark". So whether you reward someone or can them, it should come as no surprise.

On motivation and organizational change: Mr. Welch famously championed Six Sigma at GE, way before it became an industry standard. In passing such initiatives, or any future ones, he commented that you have to back them up with passion to achieve buy in, saying that if you wanted to "move the needle of your company's [gauge] a certain way, you have to be a raving lunatic on the far end" and constantly fight for it.

On private equity: According to Jack Welch, private equity is the new "brain drain" when it comes to business talent. Much like consulting was a decade or so ago, private equity seems to be offering exceptional rewards for those who are able to pierce the field. Citing an average figure of $289,000 for first year take-home pay (base + bonus) made by recent b-school grads in PE, Welch drew audible gasps from an audience comprised of financially starved students... at which point it seemed like very few would mind getting sucked into PE's Death Star-like tractor beam.

On work/life balance, telecommuting and lifestyle firms: Welch made no concessions as to where he came down on these general trends. To him, work/life "balance" is a misnomer, because it really comes down to work/life "choices". Telecommuting is well accepted in the modern business age, and well effective in terms of results, but you shouldn't kid yourself on the potential costs, he argues. In most organizations, your "promotability" will depend on face time, no matter what. In what was another astute observation, Mr. Welch reminded the audience that so-called lifestyle firms are often so during their monopolistic stage... and that can change with the wind.

On rumours that he is in talks of becoming the new dean of Sloan: Without missing a beat, Mr. Welch said he'd have a "hard time dealing inside an organization that offers tenure".

And there you have it.

After the talk, Jack and Suzy Welch were kind enough to stay back and conduct book signings. Yours truly got his copy of Jack: Straight from the Gut signed in due form. The autographed book now holds a place of choice on my bookshelf, dethroning my previously signed copy of N. Gregory Mankiw's "Macroeconomics".

Sorry N. Gregory, but you're no Jack.