Ring Side Seat for Hands On Management

by Mike Gange

by Jack Welch and John A. Byrne

Warner Business Books, $42.95, 479 pages

Household appliances, jet engines and light bulbs. Plastics, television, turbines and X-ray machines. The list of what corporate General Electric makes, owns or touches almost goes from A to Z. And Jack Welch, CEO of the global conglomerate, has seen that corporation grow for 20 years, mostly as a result his vision to shape the corporate culture and increase profitability.

In Jack: Straight from the Gut, Jack Welch and business writer John A. Byrne tell what goes on inside the boardrooms and productivity meetings of one of the world's biggest corporations. In fact, Jack has so many details it is like two books in one.

Early in the first half of the book, Welch talks candidly and humourously about himself: growing up in Lynn, Mass., how he developed his distinctive competitive edge, what led him to pursue a PhD in Chemical Engineering at Illinois (a chance encounter on an air plane made him realize that Dr. Welch sounded better than Mr. Welch) and his early laboratory work with G.E. to find the next generation of Lexan plastic. As an engineer in charge of a fabrication facility he wore blue jeans and sweaters to work and insisted that business writers call him Jack.

In his early days with G.E., Welch recounts, he received a performance bonus equal to what everyone else in his engineering group received and not based on achievements. Welch was so incensed that he nearly left the company. He may have dressed casually but he was never satisfied with mediocre.

Welch’s industrious efforts did come to the attention of the division managers and he was "invited" to work in corporate headquarters, exchanging blue jeans for business suits.

The narrative in the second half of the book recounts in rich detail how Welch helped shape the corporate culture from inside H.Q. For a long while, inspired by Welch, G.E.’'s internal motto was "fix, sell or close" each division. Under Welch, accountability moved from the top of the organization down the ladder, while feedback was encouraged to flow from the bottom to the top.

Mergers, acquisitions and increased productivity –– not just from human resources but from capital investment -- helped G.E. finish the year 2000 with record earnings of $12.7 billion and record revenues of $130 billion. Under Welch, anyone showing leadership potential in G.E. was to be given the opportunity to participate in company sponsored training. And Welch eventually changed the company system of bonuses, rewarding those who met or exceeded outcomes. Even accountants or plant workers who could see a way to reduce costs and increase efficiency were rewarded according to their contributions. Allowing all employees to participate in G.E. stock options made company effectiveness everyone’'s concern.

Jack is a fascinating, fast paced and complex book. Although disguised as an autobiography, it’’s really a case book on how to survive office politics, keep ahead of the competition, lead by example, and get the best out of people. For example, Welch would often use the corporate jet to drop in on plants and office locations across the U.S. like they were next door. He writes: "We had the resources of a big company, but with the same family atmosphere of my earlier years in the plastics business. Trying to oversee these diverse businesses in remote locations, I realized –– more than ever before –– how much my success would depend on the people I hired. From my first days in plastics, I understood the importance of getting the right people. It was clear that when I found someone great, it made all the difference in the world."

Jack is almost too good to be true. The reader can’t help wondering if Welch really deserves all the credit he heaps on himself and his corporate vice presidents. And it is hard for the reader to keep straight all the names of the parties mentioned in every negotiation.

As a hands-on leader, Welch knew all the details of the numerous negotiations involving G.E. He is not afraid to tell-all here, both the good and the bad. To his credit, he is candid about his failures and defeats. Happily for G.E., Welch and the reader, this is really a book about amazing successes, told by the man who had the best seat in the house for 20 years.

Mike Gange teaches media studies and journalism at Fredericton High