We have leadership styles of yesterday, today, and tomorrow. While tomorrow’s leadership styles are still developing, they are undoubtedly influenced by the leadership styles of yesterday and today. As the world is rapidly changing, we can rely on history to determine what should work best and what we should avoid going forward.
Jack Welch is a perfect individual from whom we can learn. He had an exceptionally long and successful career at a specific time in history. He was named “manager of the century,” and under his leadership, GE grew revenues five-fold from $25 billion to $130 billion - a remarkable achievement.
Welch’s unique leadership style, a revolutionary style for the times one might say, became an example to many other leaders on how to operate a company if one wanted to achieve a similar level of success. Jack Welch was an embodiment of a high-performance CEO, except for one thing. Since Welch’s departure from GE and the 2008 financial crisis, GE has turned into a fraction of what it used to be. Some argue that Welch’s management approach was not sustainable, and it was partially responsible for what happened to the company after his exit.
While Welch’s legacy is more complicated than it might seem at first, he provided a tremendous amount of lessons, first as a CEO of GE, and then as a founder of the Jack Welch Management Institute. The lessons show an evolution in his thinking from someone who was “the father of the ‘shareholder value’ movement,” as the Financial Times described him, to someone who had much more modern views of leadership in his later years.
The two leadership practices that Welch is mostly known for from his GE days are firing the bottom 10% of performers every year and aspiring to be number 1 or number 2 in any business GE pursued. If they could not be either number 1 or number 2, then GE would get out of that business. Welch streamlined processes, downsized businesses, and disseminated the commitment to simplicity by having as few management levels as possible. In an interview in 1989, Welch said, “I firmly believe that an overburdened, overstretched executive is the best executive because he or she doesn’t have the time to meddle, to deal in trivia, to bother people.”
That certainly does not sound like a Human CEO we are striving to have in the future. However, over the years, Welch’s rhetoric started to change. By the time he became the Executive Chairman of the Jack Welch Management Institute, he was promoting a different style of leadership. While it still bore some resemblance to his GE style, it was updated for the more modern times. Some of the lessons that we can carry forward into the future are:
- Exhibit positive energy - Have an upbeat attitude when times are good and bad. As leaders are tackling the challenges of COVID-19 and the financial downturn, this advice serves as a great reminder not to get bogged down in the negativity of what is happening in the world today.
- Energize others - I recently heard the word “uplifter.” It is a rather uncommon word, and we do not typically use it. However, it is a good representation of the type of leader we need today - someone who releases positive energy to lift people up no matter the circumstances.
- Be honest - Speak with candor and create an environment of trust.
- Have an edge - It means having an ability to make tough calls and being decisive.
- Execute - As an extension to having an edge, make a decision and get things done.
- Establish shared values - The company’s values and employees’ personal values must be compatible.
- Prioritize continuous learning - Invest in employee development through classes, training programs, and off-site experiences. This policy will send a message to the employees that the organization cares about their personal growth.
- Reward for performance - Link pay and promotions to performance and make people aware of where they stand.
- Celebrate risk - Don’t penalize people who fail when they try something new. Employees need to feel safe to take risks, innovate, and be creative.
- Embrace diversity - Cultivate a work environment with both inherent and acquired diversity. Listening to different voices is good for the company and society.
When deciding what kind of leader one wants to be, Welch recommends asking yourself, “Would you want to work for … you?” This question can help to put things in perspective and create an image of a leader you want to become.