"Business is a sport. It's like any sport. The team that has the best players wins." But if 65 percent of the team isn't engaged, how is it supposed to win? "Getting engagement is critical," Jack Welch said.
CLEVELAND, Ohio -- Jack and Suzy Welch, the man Fortune magazine dubbed "Manager of the Century," and the Harvard-educated business journalist who married him, say that creating a workplace culture where workers are both engaged and inspired starts with trusting them enough to tell the truth.
During a recent Cleveland appearance with Dr. Toby Cosgrove, chief executive and president of The Cleveland Clinic, the Welches shared some of the life lessons from their latest book, "The Real-Life MBA: Your No-BS Guide to Winning the Game, Building A Team and Growing Your Career."
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Jack Welch, left, and his wife, Suzy Welch, visited Dr. Toby Cosgrove of The Cleveland Clinic, standing behind them, to tout their latest book, "The Real-Life MBA." "Business is the ultimate team sport," they write in the book's opening chapter. "Doesn't make any difference what size your company is: five people, or 5,000, or 150,000, for that matter. Doesn't matter if it's in Gary, Indiana, churning out steel, or in Palo Alto cooking up code. ... Business is not a 'me' thing. It's a 'we' thing. It's an 'I'll take all the advice and ideas and help I can get' thing."
Your employees need to know where you're going, how you're going to get there, and what's in it for them, Jack Welch said. "You've got to be the chief meaning officer all the time."
Suzy Welch said: "Establish an environment that is characterized by truth and trust, where everyone speaks the truth; no agendas. People are more engaged when they think they're in a truth-and-trust environment."
Her husband agreed: "Every conference room should have neon lights flashing, 'Only truth in this room,' [instead of] spin this way and spin that way. We call it relentlessly flexing the trust muscle.
"Since the 2009 recession, business has been really pretty crappy," he told hundreds of Clinic employees and their guests last week. "Gallup does a poll every quarter asking 10,000 people about employee engagement, and 65 percent of employees said they are not engaged. Business is a sport. It's like any sport. The team that has the best players wins." But if 65 percent of the team isn't engaged, how is it supposed to win? "Getting engagement is critical," he said.
At previous presentations, when they have asked the audience: "'How many of you know where you stand in your organization?' on a good day, it's 15 percent," Jack Welch said. "Fifteen percent. It's criminal."
Welch should know. He joined General Electric Co. as a chemical engineer and during the next 40 years, rose through the ranks to become the company's youngest chairman and CEO in 1991. Nicknamed the "toughest boss in America," when Welch held the top job, from 1981 to 2001, GE's value skyrocketed 5,000 percent, and its market capitalization soared from $13 billion to $400 billion.
After leaving General Electric, he wrote the book "Winning: The Ultimate Business How -To Book," with third wife Suzy Welch, and launched the online MBA program at the Jack Welch Management Institution in Herndon, Virginia.
The school has enrolled 1,000 students over the past four years. "The average age is 38, the faculty are employed based on how well students like them, and no one is tenured," Welch said. "The student is the center in our school," he said.
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Jack and Suzy Welch sign copies of their book, "The Real-Life MBA," after their recent appearance at The Cleveland Clinic with Dr. Toby Cosgrove. The former Suzy Wetlaufer, a graduate of Harvard College and Harvard Business School who worked at The Miami Herald and at the Associated Press, is the author of "10-10-10: A Fast and Powerful Way to Get Unstuck in Love, at Work, and with Your Family." The two married in 2004.
When Cosgrove asked them why they wrote "Real-Life MBA," Suzy Welch explained that so much had changed in the 10 years since they wrote "Winning."
"Business is faster, it's more global, it's more digital, and social media has changed a lot of things," Jack Welch added. He cited one example from 2008, when the recession was crushing profits, and companies were aggressively slashing their workforces. One manager fired an employee who had been there for decades.
"Why me? Why me? I've been here 31 years," she protested. When he told her that she hadn't been doing a good job, she asked: "Why didn't you ever tell me?" Far worse than her performance was the fact that her boss had never told her she wasn't measuring up, Welch said. If any employee is ever surprised to hear he is being fired, "the only person responsible is you."
Among the other topics they touched on that night:
On how they write their books:
"We talk about the ideas until we can't talk about them anymore, and then I create a first draft," Suzy Welch said. "After he reads it, he gives me my performance evaluation," she joked. If Jack Welch says "good job," that means there will be about 15 more drafts. "But if he says, 'Oh, we have work to do,' that can mean 68 more drafts."
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Dr. Toby Cosgrove, left, chats with Suzy and Jack Welch at The Cleveland Clinic's Ideas for Tomorrow event.On hiring the best people:
Cosgrove asked them for advice on creating the "wow team," confessing that "when I hire people, I get it right about 50 percent of the time."
Jack Welch nodded, saying, "Hiring is the hardest thing everyone does, and people have to remember that. By the time I retired, I'd get it right three-fourths of the time. Building a team is tough.
"You have to create that cool kids' basement feeling" that makes everyone want to come over and hang out at your place. "This is what you want your group to feel like," he said.
On ranking employees into tiers:
Jack Welch said ranking employees, which could change from time to time, increases transparency. He compared it a coach opening The Plain Dealer the morning of the big game and checking out the other team's ERA and other statistics to get a better sense of how the game will go.
The top 20 percent of employees are the ones you love and want to keep, and the middle 70 percent are the ones who are working to get to the top, he said. And the bottom 10 percent?
"You tell the bottom 10 [percent] where they stand, and if they don't improve, you tell them to go," Welch said. "You want to field the best team, the only way you're going to do it is by having the best players ... You can't give 2 percent raises to the bottom 10 percent, because that sends the wrong signal."
On work-life balance:
Jack and Suzy Welch each brought four children into their marriage. "We don't call it work-life balance; we call it 'work-life choice,'" she said. There are 10 to 15 years, from about ages 25 to 40, when your work needs you 200 percent, and 10 to 15 years when your kids need you 200 percent, and "just because of biology, those are the same years," Suzy Welch said. "Which had consequences, which means I missed a lot."
She recalled the time she was struggling to help her son carry a heavy couch up to his third-floor apartment. When he asked why she was helping him lug around his couch, she told him: "Sweetheart, I'm still making up for all those wrestling meets I didn't make it to," he replied: "Oh, OK."
On leadership advice for the next U.S. president:
When Cosgrove asked what are the qualifications needed to lead us in the next four years or the next eight years, Jack Welch said: "I think we need somebody who focuses on the middle 70 [percent]. The top 1 to 5 percent has done very, very well for themselves. This administration has done everything they can to take care of the bottom group. The people who are getting screwed are in the middle. We can't have the two ends doing well, and the people in the middle not doing well."
On inspiring employees:
When someone in the audience asked how to motivate employees, Jack Welch said: "You give people more rope, you encourage risk-taking, you promote your people, and then you support the hell out of them."
Suzy Welch said: "The playing field is not level. The playing field tilts toward the really smart people."
Jack Welch said not everyone has to be a Steve Jobs or a Thomas Edison, but "every mind in the organization needs to find a better way every day.
"Bring in 100 people and have them talk about their jobs, all the things they'd like to do differently if they had the boss' job," he said. "The people closest to the work know the work best. You just have to give those people a voice, and celebrate their better ideas."
Cosgrove agreed, saying the Clinic recently asked employees for ideas on how to cut costs, and received more than 900 suggestions that have collectively saved about $3 million.
"What happened to the people who made those suggestions?" Jack Welch asked.
"We celebrated them," Cosgrove replied.