Jack Welch on How to Manage Employees

Jack Welch on How to Manage Employees
image credit: Poets and Quants

What would you say is your company's greatest asset? Your products? Your technology? Your brand? According to Jack Welch, the former CEO of GE, that answer is the same for every business: your team.

Welch is famous for his candid, talent-centric management style and has long preached that companies are only as strong as the people who keep them running. "This whole game of business revolves around one thing," he said at New York's World Business Forum on Wednesday. "You build the best team, you win."

Welch made a name for himself by building and leading his team at GE for over 20 years. He has written several bestselling books on management and recently founded the Jack Welch Management Institute, an online MBA program. At the conference, he shared some of his management tips. Here are our favorites:

1. Tell your employees where they stand. Welch advocates frequent, candid performance reviews. Or in his words, "You have no right to be a leader if someone who works for you doesn't know where they stand." 

Four times a year at GE, Welch gave each of his direct reports an honest appraisal. He told each of them what he liked about their work and what they could do to improve. "People think they're too busy (for performance reviews)," he says. "That's your number one job." He says he devoted more than 60 percent of his time to human resources, viewing every meeting -- even budget meetings -- as talent evaluations.

Related: How to Break Bad News to Employees

2. Hire generous leaders. When Welch assesses a leader, he looks for people who want to see others succeed. "Every good leader I know has a generosity gene," he says, meaning that they're excited to give a raise or suggest their best employee for a better opportunity on another team. "They like to see people win."

Welch adds that successful leaders also coach their employees, giving them tools and advice to help them grow. "A great leader is a generous coach," he says.

3. Explain the rationale for your decisions. If you want your employees or your board to stand behind your decisions, you need to explain your rationale. People who understand your reasons are more likely to support you even if they disagree.

When Welch wants buy-in, he explains who the competitors are, what they can do to hurt the company in the next two years, and how he plans to play offense. That context is key. "The benefits of change have to be explained," he says.

Related: 3 Secrets of Happy Employees

4. Critique yourself honestly. Leaders at the top of the food chain are rarely evaluated, so Welch says that critique has to come from within. "You've got to look in the mirror every morning and be totally self-effacing," he says. "Give yourself a critical review."

Welch says that he often lost his temper early in his career. When he was honest with himself, his leadership lapses were obvious. "I knew when I was a jerk," he says. "I came in the next day and apologized in front of everyone."

5. Give employees a reason to choose you. When you aim to inspire company loyalty, you are essentially courting your employees. You need to paint a picture of how their future will be better if they stay with you. "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."

As you tell that story, you're instilling a sense of common purpose, which gives employees a sense of excitement and opportunity. "Make that purpose come alive for them every day," he says.  

Related: 4 Ways to Get New Employees Off on the Right Foot

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