He’s Baaack! The Keys to Great Leadership, According to Jack Welch

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May 8, 2015

“Neutron” Jack Welch is back in the news.

He’s been on a speaker circuit with his wife, Suzy, promoting their new book The Real-Life MBA: Your No-BS Guide to Winning the Game, Building a Team, and Growing Your Career.

In the last couple of weeks, I’ve read a few articles centered on him, his leadership style, and his wisdom for leaders today. 

“Be rich with your praise”

This article included a few nuggets well worth sharing:

To be a good leader for your employees, one needs to be rich with your praise, cheer them on, love to watch them grow and be excited about their success. You need to be happy to see them get promoted and pleased to give them raises. You need to love to give bonuses. Basically, you need what we call the generosity gene. It’s absolutely critical.”

I wonder if some are surprised to hear this from a business leader with a nickname related to people practices. I wasn’t. Welch is himself on record saying people have misunderstood and misapplied his people approach. In his book Winning, he wrote:

The middle 70 percent are enormously valuable to any company; you simply cannot function without their skills, energy, and commitment. And that’s the major challenge, and risk — keeping the “middle 70” engaged and motivated… Everyone in the middle 70 needs to be motivated, and made to feel as if they truly belong.”

I see a through-line in his leadership thinking between these two quotes, and that line pivots on the idea of a leadership “generosity gene.” Truly good leaders must be generous with others. Indeed, that’s the very definition of leadership – setting aside personal priorities and goals to help others achieve their best. And, in doing so, thereby achieve your own success.

The key elements to employee engagement

But more to the point, in the first quotation above, the retired General Electric CEO highlights nearly every important element for engaging employees:

  • Frequent, timely praise, and encouragement;
  • Opportunities to learn, grow and advance their careers;
  • Pay commiserate with role, opportunity, and results;
  • Above-and-beyond bonuses available to any level of employee.

As I’ve written several times in Compensation Café, it’s this blend of recognition, opportunity and pay, in appropriate balance, that helps employees want to give their best and helps managers elicit the best from everyone.

Neutron Jack’s 3 measurements of a business

Welch goes on in the article to point out these factors aren’t just a measurement of leadership, but of the business itself:

There are three measurements you need to understand at a business to know if you’re on the right track,” Welch said.

“First and foremost is employee engagement. How do your employees feel about their jobs, where they’re going and do they like the work? Are they proud of what they do?” he noted.

“Secondly is customer satisfaction. You don’t have a business without customers, but you’ve got to have employee engagement first,” Welch added.

“The third is cash flow. If you’ve got the first two right, you’ll get the cash flow. If you don’t, you won’t. It’s really that simple.”

Employee engagement is impossible to achieve fully without the four elements referenced in his first quote. Company success falls out from there.

What are the key elements to leadership for you?

This was originally published at the Compensation Café blog, where you can find a daily dose of caffeinated conversation on everything compensation.

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