Effective leadership comes down to a lot of key factors.
The ability to: embrace change, lead without micromanaging, hire and develop the right people, see the facts for what they are, and stay focus amidst the day-to-day worries.
All are key to any leader’s success this year and in the years to follow.
Today we’re going to explore 5 lessons (with many sub-lessons) that legendary former CEO of General Electric, Jack Welch, has for the leaders of today and tomorrow:
1. Avoid the dormancy effect
You and your team are either growing or your dying. Business owners and managers don’t have the luxury of sitting back and waiting for the lottery to draw in their favor. Plain and simple, you must embrace change. As Welch puts it:
“Everything is constantly changing – market conditions, the business environment, consumer spending habits, advances in technology, new products, competitors who may be gaining on you.”
Welch is known for being among the most hard-nosed, adaptive leaders to ever manage a major corporation. He spent twenty years rising through the ranks of the company during the sixties and seventies before taking over leadership and really catapulting the conglomerate from a few measly billion in market value when he started, to a $280-billion empire upon his retirement in 2001.
Jack insists that everyone in the company including you, must be open to change. He didn’t take over the world sitting behind a desk and letting things come what may. This man took GE into new emerging markets at a time when the company had stilted growth due to doing the same old, same old it had for almost a century prior to his taking over.
2. Embrace leadership; don’t manage.
This advice from Welch sounds a little odd without hearing him out. The basic premise of leadership over management goes back to Welch’s early days working at GE and even before as he worked to earn his Masters and PhD in chemical engineering back in the fifties.
Jack tells us that there was a time when managers literally did nothing but sit at a desk — supervising and dishing out orders to those underneath them. They didn’t spend time talking to employees, they never sought to inspire them to climb bigger mountains, and they never encouraged them to think outside the box either.
Simply put, he calls this old approach management and not leadership:
“I want my top people to lead, not manage. Managers keep their feet on the brakes, rather than on the gas”
In order to break into successful leadership, you need to get out from behind the desk and immerse yourself in all aspects of the business. Leadership requires knowledge of all the fundamentals.
3. Hire and develop leaders with energy and brains.
Jack always said the only way to successfully grow a business is by hiring managers with unceasing energy, who both share your vision for the company and show an uncanny ability to impart that energy and vision onto other people in the company — including yourself, when and if you need it.
Simply put, your management staff has to be as good, or better than you are at creating a vision and running with it:
“The best managers also have the indispensable gift of creating, developing and refining a vision and putting it to work in a practical way.”
Jack acknowledges that the only way to do this is by giving managers say-so in important movements the company will make, and the power to make decisions on their own without always requiring your input first. Many strategically-placed leaders will always trump the lone wolf barking orders at the pack from afar.
4. Don’t be ignorant to the facts — exploit what works and eliminate that which does not
Jack tells us leaders need to be constantly updated on all the pertinent facts related to running and growing your business. If you ignore them, you’re doomed to fail:
“Acknowledge the facts and proceed to exploit them for advantage or eliminate their negative impact.”
As you already learned, Jack had a lot of market analysis and cleaning up to do when he took over the helm of GE back in 1981. He saw that times were changing and that while some of the company’s assets were still making plenty of profit, they weren’t good for the its long-term growth potential.
So Jack sold off several companies including the technologies they offered, and looked to new emerging markets and their potential. One such profit-producing-acquisition for the company came in the form of a little company called RCA who happened to own NBC television at the time. Jack saw that mass media was changing and that it held the secrets to huge profits in the years to come.
5. Be focused, be consistent and follow up on every detail.
Jack says focus, consistency and follow-up were the main factors that led to his legendary turn-around of the once smallish General Electric Company. One could make the argument they may not be around today had he not took over, considering the course they were on at the turn of the eighties.
Within these three values are several sub-values that need to be integrated:
- Always focus on changing when necessary.
- Be open to new ideas.
- Customer service should always be paramount.
- Quality over quantity.
- Simplicity over complex.
- Empowerment of managers and employees.
- Be on a constant quest for competitive advantages.
What a man and what a truly novel-worthy climb up the ladder of success. Raised by a railroad conductor and stay at home mom, he went from chemical engineer to a man that catapulted GE’s stock values over 4,000% during his twenty year tenure as CEO.
He’s also the recipient of the largest severance check from the company: a modest $417,000,000!
Not a bad man to take leadership advice from if you ask me.
Main Image Credit: NPR.org