Welch on People Management

Jack Welch, former CEO of General Electric said “ Look, in a time of drastic cutbacks, spending money on anything can set off a deafening sound and fury. But don’t let the noise overwhelm you. In fact, try to break through it to get your people to listen as you talk about down-the-road ideas.

The future you describe will need to be exciting and promising to overcome organizational fear and cynicism. You just have to help people understand that someday the organization will be different—and better—with everyone’s determination and buy-in” . Welch understood that in both small and large companies, who is “on the bus” is as important as thinking of a more propsperous future. Being on the bus meant aligning your personal goals and objectives with those of the new venture.
Welch was famous for instituting a system at GE where senior managers ranked their employees 1, 2, or 3’s. If you were a 1, you were considered a top preformer. The rating of 2 meant you were considered more of a marginal employee in some ways, but a solid contributor overall. The “3” rating meant you were out of a job at GE. This system kept people contributing at a rate that produced some of the best productivity in the history of GE.
Many people were highly critical of Welch and his management style, calling it “draconian”. However, his philosophy of keeping a rewarding the 1’s has been duplicated by many successful companies.

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About Don Capener

Dr. Capener joined the Monmouth College business faculty in 2001. He is best known as the co-founder of Above The Rim Basketball that sold to Reebok in 1993. Capener recently accepted the Deanship at Jacksonville University’s Davis School of Business in Florida. As an Emmy award winning advertising professional in the Southern CA region, Don was the CMO and marketing architect for Above The Rim and ClickRewards.com. He directed national efforts for Visa’s promotional campaigns such as Visa Rewards at Frankel & Company in Chicago and San Francisco. He rose to Managing Director of Frankel’s San Francisco office. He is now a Professor of Strategic Management and Entrepreneurship and consults for start-up and mid-sized companies