From 1981 to 2001 Jack Welch was the Chairman and CEO of General Electric.During those twenty years, GE’s company value soared by 4000%. Welch started at the bottom in 1960 and plotted his way through the ranks, eventually leading him to a vice president position in 1972. Nine years later he became GE’s youngest CEO and began to stir up GE. Welch began to dismantle much of the management put together by previous CEOs and led an aggressive simplification and consolidation initiative. In fact, during the early 80s he was nicknamed “Neutron Jack” due to his tactic of eliminating employees and leaving the building intact. He was renowned for his annual firing the bottom 10% of his managers and awarding the top 20% with bonuses and stock options. While his hard-nosed managerial style has been criticized throughout the years, Welch’s and GE’s overwhelming success consistently muffled the middle-class outcries to mere whimpers.
What’s his secret to managing employees OTHER than firing the weak and rewarding the strong? Well, Welch recently spoke about this at New York’s World Business Forum this past June. The main takeaway was this: “This whole game of business revolves around one thing. You build the best team, you win.”
Welch has a lot of advice surround how to build the best team, in fact, he recently founded the Jack Welch Management Institute, an online MBA program. Below we’ve tracked down a couple tips and cornerstones to building a successful team at your company. Take a look:
Hire generous leaders
Start by fine-tuning your leadership and eliminate the selfish and self-motivated. Great leaders want to see others succeed. They’re excited to give raises and praise for great work and they strive to see people win. They’re also tremendous coaches for their employees and supply tools and advice to help them grow.
Tell your employees where they stand
A famous quote from Welch seems apt here: “You have no right to be a leader if someone who works for you doesn’t know where they stand.” Welch instituted quarterly reviews in which managers would pick out areas their employees are excelling at, as well as a few items that could be improved upon. “People think they’re too busy for performance reviews,” Welch says. “That’s your number one job [as a manager].” Welch estimates he devoted about 60 percent of his time to human resources, viewing every meeting – even budget meetings – as talent evaluations.
Give employees a reason to choose you
It’s important to instill a sense of common purpose with your employees and “make that purpose come alive for them every day,” if you aim to inspire company loyalty. You’re essentially courting your employees. “You want your employees to feel like they are part of the company,” Welch says. “Tell them a story that makes them want to choose you.”