The Jack Welch Lexicon of Leadership This page intentionally left blank The Jack Welch Lexicon of Leadership Jeffrey A. Krames McGraw-Hill New York • Chicago • San Francisco • Lisbon London • Madrid • Mexico City • Milan • New Delhi San Juan • Seoul • Singapore • Sydney • Toronto Copyright © 2002 by The McGraw-Hill Companies. All rights reserved. Manufactured in the United States of America. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher. Bookz 0-07-138938-5 The material in this eBook also appears in the print version of this title: 0-07-138140-6. All trademarks are trademarks of their respective owners. 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DOI: 10.1036/0071389385 To my parents, Barton and Trudy This page intentionally left blank Contents Prologue ix Acknowledgments xi PART ONE Evolution of a Leader: The Welch Years 1 PART TWO The Jack Welch Lexicon of Leadership 19 Sources 205 vii Copyright © 2002 by The McGraw-Hill Companies. Click here for terms of use. This page intentionally left blank Prologue In November of 2000, The Wall Street Journal asked me to write an opinion piece on Jack Welch’s choice of a successor. The essay, entitled Welch’s Successor is likely to Succeed, included the follow- ing proclamation: “Welch has done more to advance the body of knowledge than any of his contemporaries. He created a new busi- ness lexicon.” This statement planted the seed for this book that the very words, terms, and phrases used most often by Jack Welch, 250 in all, could become the basis for a management book. Of course, I have more than a passing interest in Jack Welch. Having spent a decade studying all things Welch and after editing four books on GE’s CEO and the learning culture he had nur- tured, I had begun, imperceptibly at first, to inculcate Welch’s tenets into the everyday fabric of my work life. At McGraw-Hill, the books on Jack Welch that I had acquired and edited had become something of a phenomenon. Each one out- sold the one that preceded it, and sales were not confined to North America. Hundreds of thousands of copies were sold and distributed throughout the world, and not only in English, but in close to a dozen languages. Thanks to Welch’s sweeping globaliza- tion initiative, GE had a strong presence in all 32 countries in which McGraw-Hill had an office. The vision for this book finally came three months after the Wall Street Journal piece ran, and the key was a childhood memory. I recalled that as a child I would leaf through the pages of The World Book Encyclopedia, always amazed at how much informa- ix Copyright © 2002 by The McGraw-Hill Companies. Click here for terms of use. [...]... articles, while other Copyright © 2002 by The McGraw-Hill Companies Click here for terms of use 3 4 THE JACK WELCH LEXICON OF LEADERSHIP concepts associated with the program, such as “high hards” and “rattlers,” have received far less attention Many of the entries in the Lexicon were indeed the brainchild of Jack Welch and GE However, it is worth noting that the book includes dozens of entries that... middle -of -the- night writing sessions To my family, I offer my gratitude for the love and the lessons, and for transforming a few small rooms and a shop on Kingsbridge Road into a learning organization of their own P A R T O N E Evolution of a Leader: The Welch Years This page intentionally left blank Why a Jack Welch Lexicon of Leadership? Lexicon (lek-si-kon): (1) A dictionary; (2) A stock of terms... particular profession, subject, or style; a vocabulary THE AMERICAN HERITAGE DICTIONARY n his two decades at the helm of GE, Jack Welch did more to add to the leadership literature than any other CEO of the modern era Not only did he give more thought to the business of leadership, Welch devised principles, strategies, and tenets to lead by I In creating one of the world’s most competitive corporations, Welch. .. result was the 19 92 publication of The New GE, which chronicled Jack Welch s first decade as CEO Three other books followed over the next nine years, including the national bestseller Jack Welch and the GE Way In creating these works, I worked side by side with Robert Slater, planning, molding, shaping, and editing Several of these conferences, such as the June 19 99 meeting at Lake George (for The GE Way... well as the role it played in crafting his vision for GE The goal of the Welch Lexicon is threefold: 1 To give readers a guided tour of the language and strategies of all things Welch Readers will gain valuable insights into the key management ideas that consumed Welch, while also learning the significance of these concepts and programs The most important terms are clearly designated (with the Six... stressed the importance of building an organization of trust, excitement, and informality Welch recognized the adverse effects of bureaucracy and knew that unless he rid the organization of the worst of it, GE would never become a legitimate global competitor THE JACK WELCH LEXICON OF LEADERSHIP 5 2 To impart additional insights into Welch s key companywide initiatives During his tenure, Welch launched... of the Welch legacy is the depth of his achievements While some executives gain their reputation for mastering one or two aspects of the CEO’s job, no other business leader has proved to be so adept at mastering all of the critical aspects of leadership: people, process, strategy, and structure The Welch playbook is replete with examples of how he excelled at each in transforming GE (the majority of. .. majority of the Lexicon listings demonstrate Welch s mastery of these four aspects of leadership) And Welch s contributions have been felt far beyond the halls of GE As the most fertile training ground of executive talent, GE has cultivated many top managers who have gone on to head other Fortune 500 firms (e.g., The Home Depot, 3M, AlliedSignal) By infusing the Welch philosophy into the fabric of those... Welch s two-decade crusade at GE’s helm The model includes not only an explanation of, say, Six Sigma (Welch s quality initiative), it also includes the origins of the program, the role of employees, the evolution of the program, etc The last piece involves adding lessons, so readers can apply what Welch had learned to their own organizations The final product puts all of Welch s key strategies and initiatives... the lessons he learned in a “scrappy place” called the “Pit” (the neighborhood gravel pit turned into a makeshift park) with forging his 6 THE JACK WELCH LEXICON OF LEADERSHIP leadership abilities He later attended the University of Massachusetts at Amherst, and then went on to the University of Illinois, where he received a Master’s degree and a doctorate in chemical engineering In October 19 60, Welch . things Welch. After reading the Lexicon, readers will understand how the son of a train conductor became one of the great business leaders of the modern day, or any day. x THE JACK WELCH LEXICON OF. ONE Evolution of a Leader: The Welch Years 1 PART TWO The Jack Welch Lexicon of Leadership 19 Sources 205 vii Copyright © 2002 by The McGraw-Hill Companies. Click here for terms of use. This. The Jack Welch Lexicon of Leadership This page intentionally left blank The Jack Welch Lexicon of Leadership Jeffrey A. Krames McGraw-Hill New York