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A New Conversation with Jack Welch

Burn out is theoretical, psychological, a fuzzy thing. Burn out is standing at a lathe for 10 hours doing the same thing. (In) an exciting job, you are turned on every minute and wanting more and more and more.... Jack Welch

Jack Welch has never been one to pussyfoot around when it comes to discussions of leadership, and he doesn’t break from form during a lively give-and-take with MIT Sloan Dean David Schmittlein and an audience of Sloan students.

Schmittlein starts with a series of questions involving the reasons why some top corporations lose their market leadership positions. “Complacency and arrogance,” Welch believes, clearly lie behind these drops in stature -- believing you “know it all” when in fact you always have to “know somebody’s doing it better than you.” Managers and their staff must understand “somebody’s always shooting at you,” and “you have to always find a better way of doing it.”




















When Schmittlein suggests a “worthwhile purpose” may help motivate people in any organization toward a goal, Welch says forget social responsibility as a mission: “Your obligation is to win, because it’s after you have resources and money that you can give back.” Management “fads” such as “thinking and dreaming time” (this means you, Google) don’t strengthen businesses long-term, believes Welch. Just innovate and produce better products that can beat the competition.

In tough times, such as the recent recession, a company’s challenge “is to come out stronger than when it came in,” and managers must acknowledge not only that “it’s awful,” but “what it will look like on the other side.” Some “jackass” CEOs like to launch major change during such periods, but fail to “explain to people what’s in it for them.” Key to setting a direction and maintaining it through the inevitable bumps of economic and political change, says Welch, is “the right team,” where everyone knows their roles, and how they are performing. This means committing to a process of “differentiation,” where top, middling and failing employees learn exactly where they stand in the eyes of top management, and get compensated (or terminated) on the basis of ability. It’s “cruel” not to be brutally honest with employees, believes Welch. People can make mistakes, of course, but concealment is an error, and admission of failures while risk-taking a kind of heroism. “Never punish someone for taking a swing,” Welch says. And he doesn’t buy the idea of “burn out,” because this simply doesn’t happen in exciting jobs where you’re “turned on every minute, and always want more.”

To a student who wonders if the right way to enter the job market involves “blending in and not rocking the boat,” Welch simply responds: “Yuck, yuck, yuck.” For tips and an in-depth education on managing and winning, Welch suggests visiting his new online MBA program, the Jack Welch Management Institute.

Source: http://mitworld.mit.edu/video/916
April 26, 2011
Running Time: 0:57:40

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