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A Conversation with Jack Welch

Jack Welch: April 12, 2005; Running Time: 56:39

About the Lecture

About the Lecture

When Jack Welch was a young manager, he blew the roof off one of General Electric’s factories in a chemical accident. Summoned to a company VP, Welch received comfort rather than harsh words and a pink slip. This episode proved seminal to Welch’s philosophy and subsequent corporate career, and serves as one of many pithy lessons he offers in a lively conversation at MIT Sloan. “From that day forward, I never berated anybody when they were down,” says Welch. Other lessons learned from his life at GE: Never hire people (or acquire other companies) whose corporate culture doesn’t match your own. “No matter how good the numbers look, culture matters as much as financial profile.” He advocates frequent employee evaluations -- he gave his own division heads four reviews a year. “Never give anyone a raise (or stock option or bonus) without a small sheet of paper on how well they did or how they can improve,” says Welch. He admits some of his personnel ideas make people uncomfortable: in particular, his notion that 10% of employees will never succeed, and should be shown the door as expeditiously as possible. “You’ve got to believe that the team that fields the best players wins. If you tell the bottom ten where they stand, that it’s time to look for something else, that’s considered cruel management.” But, says Welch, it’s far crueler to let people hang on and then get cut later in their careers when they’re less likely to find other work. His ultimate advice to wanna-be managers: “Err on the side of the bold. … Take swings, have fun.”

Lecture Details

Location: Wong Auditorium

“What ingredients do you have that will take you beyond being smartest in the classroom, and getting the best grades? We’ll want to see how much energy you have, how you can energize others, how much edge you have. Can you say yes or no or are you one of those people who always need more data? I hate those people. Can you execute, deliver? ”

Jack Welch

About the Speaker

Jack Welch

Former Chairman and CEO
General Electric Corporation
Founder, Jack Welch Management Institute

Jack Welch received a B.S. in chemical engineering from the University of Massachusetts in 1957, and his M.S. and Ph.D. in chemical engineering from the University of Illinois. He joined General Electric in 1960 as a junior engineer.

He became a vice-president of GE in 1972, senior vice-president in 1977, vice-chairman in 1979 and became the corporation's youngest Chairman and CEO in 1981. During his 20-year tenure, the company's market value grew from $12 billion to $280 billion. He was known for eliminating red tape and bureaucracy.

Welch has written two books, including Jack: Straight from the Gut (2001), and his most recent, with wife Suzy Welch, Winning (2005).

Jack Welch

The Jack Welch Management Institute

MIT Sloan School article on Jack Welch

About the Host

About the Host

MIT Sloan School of Management

The MIT Sloan School of Management, based in Cambridge, Massachusetts, is one of the world’s leading business schools — conducting cutting-edge research and providing management education to top students from more than 60 countries. The School is part of MIT’s rich intellectual tradition of education and research.

MIT Sloan began in 1914 as engineering administration curriculum in the MIT Department of Economics and Statistics. The scope and depth of this educational focus have grown steadily in response to advances in the theory and practice of management to today’s broad-based management school.

A program offering a master’s degree in management was established in 1925. The world’s first university-based executive education program — the MIT Sloan Fellows — was created in 1931 under the sponsorship of Alfred P. Sloan, Jr., an 1895 MIT graduate who was then chairman of General Motors. A MIT Sloan Foundation grant established the MIT School of Industrial Management in 1952 with a charge of educating the “ideal manager.”