John Francis Welch Jr departed the world 1 March 2020 leaving in his wake many lessons in business and management and practical tools for running successful enterprises. A leader associated with great success in revitalising a giant conglomerate, Jack Welch’s great legacy is his strategic understanding that emphasises the centrality of human capital in business management. Welch was the strategist of people.
Jack Welch died at 84 with many success stories to his name. His emphasis on people and teamwork delivered profits. He knew about winning.
The headlines emphasise the transformation of General Electric under Welch, growing market value over 20 years from $12 billion to $410 billion. Others speak to the many acquisitions and the expansion of the business scope of General Electric.
The most important contribution of Jack, however, was in recognising and promoting the primacy of people or the human capital in driving organisational success. The Jack Welch Matrix that he contributed to the toolbox of HR management spoke to fundamentals such as the attestation of educational institutions that state that they have found successful candidates “worthy in character and learning”. It spoke to values and positivity.
Jack Welch taught the world to assess managers primarily on two poles of contribution and value alignment. The results a manager or employer delivers are primary. The other leg of assessment is the behaviour that he displays at work, including relationships with all stakeholders in a 360 degrees loop. Business is about people and how a manager interacts with and manages relationships with people affects his ability to deliver on the primary area of results.
The Jack Welch Management Assessment Evaluator developed four quadrants. Managers in Box 1 were Plus-Plus: they delivered results in line with the values of the organisation. Their results motivated others. Box 2 managers were Plus-Minus, with results that show possibility for improvement. Managers who scored Minus-Plus were borderline as their score on behaviour did not meet the mark. Slight deviations could mean possible improvement. Box 4 referred to those who scored Minus-Minus. Managers in this quadrant delivered poor results and bad behaviour, a combination that called for dismissal.
A chemical engineer, Jack Welch excelled as a business executive, writer and educator. He was the organisation man in the old tradition, serving General Electric for 40 years. He was also an epitome of the jet age executive who became rich on the profitability they generated for their companies. Welch had a valuation of $750m net worth in 2018.
As author, Welch left the world with eight books chronicling various aspects of business management, executive decision making, goal setting and people management. He left pithy sayings such as “An organisation’s ability to learn and translate that learning into action rapidly is the ultimate competitive advantage”. He also noted, “If you pick the right people and give them the opportunity to spread their wings and put compensation as a carrier behind it you almost don’t have to manage them.”
Welch lived a rich and variegated life. He married three women in his lifetime, divorcing the first two, and living with Suzy Welch, journalist and companion with whom he wrote some of his books, for his last 20 years. In later years, he ran the Jack Welch Management Institute that offered an exclusively online MBA programme based on his teachings and principles.
The business world will remember Jack Welch for many positives. His successes owed to effective management of the most important resource of the organisation now recognised as its human capital. Adieu, Mr Welch.
