Another Lesson From Jack Welch: Culture Is as Critical as Results

Former GE CEO Jack Welch, a man who appreciated HR. From the HR blog at TLNT.
Former GE CEO Jack Welch, a man who appreciated HR. From the HR blog at TLNT.

When you hear the name “Jack Welch,” what do you think of first?

“Neutron Jack,” famous for an (often misunderstood) employee differentiation method that resulted in the bottom 10 percent of performers being let go annually? A powerhouse industry captain who helmed GE for decades?

How about a vastly experienced CEO who puts company culture ahead of results?

Most don’t equate “Neutron Jack” with what many think of as the “soft” side of business. But Jack understands the fundamental power of strong company culture to drive business results, an insight that was also the core tenet of our book, Winning with a Culture of Recognition.

Why culture matters

Case in point,  a recent article in Fortune by Jack and Suzy Welch in which they say:

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“Soft culture matters as much as hard numbers. And if your company’s culture is to mean anything, you have to hang — publicly — those in your midst who would destroy it. It’s a grim image, we know. But the fact is, creating a healthy, high-integrity organizational culture is not puppies and rainbows. And yet, for some reason, too many leaders think a company’s values can be relegated to a five-minute conversation between HR and a new employee. Or they think culture is about picking which words — do we “honor” our customers or “respect” them? — to engrave on a plaque in the lobby. What nonsense.

“An organization’s culture is not about words at all. It’s about behavior — and consequences. It’s about every single individual who manages people knowing that his or her key role is that of chief values officer, with Sarbanes-Oxley-like enforcement powers to match. It’s about knowing that at every performance review, employees are evaluated for both their numbers and their values.”

Requirements for building a culture of recognition

Jack and Suzy go on to argue why you must get rid of the person that brings in the numbers while behaving in ways completely opposite the company values. This article in Inc. magazine walks through the four most common excuses for not getting rid of your worst employees and why you must overcome them.

The Fortune article points to several foundational requirements for building a winning culture of recognition that is proven to drive bottom-line business results through increased employee engagement, retention, productivity and performance. Not least of these are:

  1. Making culture an ongoing topic of conversation, training and reinforcement instead of a one-time event
  2. Taking the values off the plaque on the wall and deeply integrating them into the daily work of employees
  3. Clear rewards – and consequences – for how employees reflect the values in their work.

You can find more from Derek Irvine on his Recognize This! blog.

Derek Irvine is senior vice president of client strategy and consulting at Workhuman, where he leads the company’s consulting and analytics divisions. His writing is regularly featured across major HR publications, including HR Magazine, Human Resource Executive, HR Zone, and Workspan.