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BOOK REVIEW

JACK: STRAIGHT FROM THE GUT

By Jack Welch and John Byrne
Warner Books, Inc. 2001, 479 pages

Reviewed by: Prashanth Nagendra Bharadwaj

This is an autobiography of Dr. Jack Welch, one of the most celebrated CEOs and business
leaders of the 20'entury. As Jack Welch acknowledges, this is neither a management
handbook nor a perfect business story. However, it is a personal story written in a

straightforward manner by a man with a great memory. The detailed way in which Jack

recounts his personal and professional lives provides excellent tips for anyone remotely

interested in business and management. Although he spent forty years in one of the world'

biggest corporations, his management style offers interesting and useful insights for

entrepreneurs and small business managers. The story of his life was a see-saw to a great
extent and while reading his book, you go from thinking that he is Machiavellian to realizing

that he is one of the most straightforward people; and when you think he is narcissistic, you
lind out that he is a highly self-effacing individual. He was involved in numerous mergers

that resulted in business closures and job losses while he attributes everything he has
accomplished to other people.

His recent highly publicized personal problems do not take anything away from his story or

his incomparable success in leading GE for two decades. If you have not already read this
book, I recommend that you read it. It is better to read the book sequentially since it is written

in the form of a story. If you are looking just for serious business tips, I recommend that you
skip to Sections IV and V of the book. Chapter 24 (in Section V) especially provides
interesting tips for business leaders. I will highlight some aspects of the book that may be of
specific interest to small business and entrepreneurship constituents.

"My objective was to put a small-company spirit in a big-company body, to build an

organization....that would be more high-spirited, more adaptable, and more agile than

companies that are one-fiftieth our size...where people dare to try new things —where people
feel assured in knowing that only the limits of their creativity and drive, their own standards
of personal excellence, will be the ceiling on how far and how fast they move" declares Jack
in the Prologue of the book. This can be an objective for companies of any size including
small businesses. Jack was obsessive about getting rid of the "damn" bureaucracy and
instilling a "small business" mentality at GE.

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Jack has several short stories and episodes from his life to drive home some important lessons.
He recounts how his mother, the most influential person in his life, walked into his high
school locker room right after he flung his hockey stick in I'rustration after losing a game. She
grabbed him by his uniform and shouted in his face in front of all his friends, "you punk! If
you don't know how to lose, you'l never know how to win. If you don't know this, you
shouldn't be playing." He attributes many of his basic management beliefs to her lessons—
setting stretch goals, competing hard to win, facing reality, motivating people by alternately
hugging and kicking them, etc.

ln another story, right after he became CEO of GE, he challenged the members of a highly
reputed internal management club, Elfun. The club was considered a "right of passage" into
management and had thousands of aspiring members who in Jack's words practiced
"superficial congeniality" when some one influential showed up at their meetings. It had
become an elitist group. In his first speech to thc club as the CEO, which the members
expected to be a congratulatory speech, he shocked everyone by saying that "I can't find any
value to what you'e doing. You'e a hierarchical social and political club. I'm not going to
tell you what you should do or be. It's your job to figure out a role that makes sense for you
and GE." Within a month the club self-engineered into a volunteer club getting involved in
inner-city schools, building parks, playgrounds and libraries, repairing tape players for the
blind to name a few activities.

Jack attributes GE's success to people. He does not have a recipe for identifying and hiring
the right kind of talent. He has stories of how one female V.P. impressed him with her
immense knowledge of baseball trivia during her job interview and how he hired a mechanic
off New Jersey Turnpike who impressed Jack with his gutsy determination. Of course, these
individuals had other business skills that made them successful. He was big on passion (with
rigor), intensity, energy, "fresh-thinking", 360-degree evaluations, performance, and
differentiating employees into A, B, and C players (and letting C players go). GE, under Jack,
did not assure lifetime employment for anyone but assured that they will make each employee
employable for life. To highlight that, two of the three unsuccessful contenders to succeed
him as CEO, were immediately picked up as the CEOs of 3M and Home Depot.

Jack was the evangelist of the term "boundarylessness" and what it stands for. He personally
wanted to break through the hierarchy and connect directly with all layers of the organization,
without his message being interpreted by layers of bosses. He created several opportunities
that promoted openness in the organizations among union workers in the manufacturing floor
to individuals in the boardroom. His idea of boundaryless went beyond breaking down the
barriers between suppliers, customers and internal departments. It included breaking down the
subtle barriers of race, gender and individual ego, the last one being an almost spiritual effort.
In one year, he let go of several managers who were autocrats —who forced performance out
of people, rather than inspiring it. It is important to note that these were high performing
managers who made their numbers. Boundaryless attitude helped many ordinary folks in the
organization to achieve extraordinary things.

In one of his annual speeches to the top executives, he said "we can't be talking about reality,
candor, globalization, boundaryless, speed, and empowerment and have people who don'
embrace these values. Every one of us must walk the talk." This is a great lesson for any
manager in any organization. He called major initiatives as game changers and four such
initiatives at GE under him were Globalization, Services, Six Sigma, and E-business. These
initiatives can be ideal for any small business also. As an example of his Globalization focus,
he identified a budding entrepreneur from India as GE's partner in 1989 who went on to
become one of the world's richest businessmen and the poster child of India's high-tech
revolution of the 1990s. He focused on the Services aspect of GE's business and grew it from

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$ 8 billion in 1995 to $ 19 billion in 2001. He championed the Six Sigma concept that not only
minimizes variation in manufacturing processes (and consequently improves product quality)
but also enables managers in all functional areas to reduce waste, improve decision making
and enhance productivity. For a man who had not used e-mail on his own until 1999, it was
commendable that he recognized and pushed e-business as the right tool to reinvent and

transform GE in the 21u century.

His effective management style and solid character was apparent during his CEO succession
process that spanned almost five years. All the contenders acknowledged it to be highly open
and devoid of any politics. He wanted the best person to lead GE into its future and not
necessarily his favorite lieutenant to succeed him. He got the entire board into confidence

during the process and their unanimous approval of his successor. He flew during
Thanksgiving holiday in turbulent weather to Cincinnati and Albany to personally
communicate his final decision to both the unsuccessful candidates before others came to
know about it. Jack says in the last page of his book that his successor Jeff Immelt's able
performance on his first big day as the CEO-elect with company big wigs triggered one of his
happiest memories —the birth of his first child 39 years prior to that. That is the mark of a true
mentor, a true steward, and a true leader.

For the reader interested in learning about Jack Welch, the CEO, and how he viewed his job, I
refer them to Chapter 24 "What This CEO Thing Is All About." There Jack shares the ideas
that worked for him that include concepts such as Integrity, People First/Strategy Second,
Maximizing Organization's Intellect (creating a learning organization), Informality (not

bureaucracy), Passion, Self-confidence (not arrogance), Stretching, Celebrations (to have fun
while being productive), Differentiation of people, Aligning Rewards with Measurements, etc.
He humbly says at the end that these are things that worked for him, along with luck. That
reminds me of a Dale Carnegie quote on luck, which I paraphrase —"luck is the meeting place
of opportunities passing by and a person's alertness." Jack was indeed lucky!

Even if you are not keen on learning about Jack's management approaches, this book is
recommended to any entrepreneur to read as an inspirational story of a kid born into a
working-class family of a railroad conductor, a college student who initially found math and
physics very hard, a man with speech impediment, who went on to earn a Ph.D. and become
one of the most respected CEOs of modem business.

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