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| A Conversation with Jack Welch and Alex D’Arbeloff |
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SPEAKER:
Jack Welch
Former Chairman and CEO
General Electric Corporation
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ABOUT THE LECTURE:
You won’t catch Jack Welch changing his tune on the basics of business success, at least not in this conversation with Alex D’Arbeloff. He dismisses criticism in the business press that his ideas need revision, and repeatedly hammers home his central themes.
“Your job in a business environment is no different than managing a sports team: you want to field the best players,” says Welch. “Weed out the weak, encourage the average to bet better and show them how and let the top people know how much your love them and care about them…That is the game.”
There’s too much concern about eliminating poor performers, says Welch. “Why focus on the losers? It’s society’s little guilt trip.”
The key is getting the top tier of employees excited, giving them the self-confidence to reach and do more. “If you’re a boss and a bore, slap yourself,” he continues. Leaders of organizations must structure rigorous appraisal and training regimens, so employees know where they stand. “Candor is the biggest thing we build,” notes Welch.
He offers additional observations and insights in response to questions from D’Arbeloff and the audience. Welch is concerned by the current brain drain of the nation’s best and brightest MBAs, who head to six-figure starting salaries at hedge funds and private equity firms rather than building careers in companies. He scoffs at the notion of “work-life balance,” insisting on the word “choice” instead, since he believes that flush companies try to buy off employees with flex time “and massages at 3 o’clock,” rather than offering appropriate compensation and intrinsic job value. Also, telecommuting “is another fad that will die of no success,” since without face time, employees aren’t entitled to move up the ladder. Welch declares there will be “no new age employees in my start up. I want players who are sweating, animals, people who don’t take no for an answer, who are there 24/7.”
Welch spies a “massive opportunity” in the green movement, and says CEOs today have no option but to believe in global warming, and drive their organizations and products in that direction. “That’s what your job is. Sense it early and move before the trend, and have your products out there.” He’s also betting that the U.S. will ultimately outrun China in economic growth. “The ability to have hungry, innovative people matched up with liquidity allows us to have an entrepreneur class unmatched anywhere,” concludes Welch.
ABOUT THE SPEAKER:
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).
Welch's bio on the GE website
MIT Sloan School article on Jack Welch
NOTES ON THE VIDEO (Time Index):
Video length is 0:58:24.
Dave Weber, Head of Corporate Relations, MIT Sloan, introduces Jack Welch and Alex D’Arbeloff, Professor of Practice, MIT Sloan School of Management; Honorary Chair of the MIT Corporation; and Co-founder and former CEO, Teradyne, Inc.
At 3:19, D’Arbeloff begins his conversation with Welch.
At 25:46, D’Arbeloff reads the first question from the audience.
Note: Several times, Welch calls on the audience for questions, but the audio is quite low.
The information on this page was accurate as of the day the video was added to MIT World. This video was added to MIT World on 2007-07-17.
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