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Jack Welch and the 4 E's of Leadership

How to live a better life, develop sustaining relationships and lead others.

Jack Welch was an American business executive, chemical engineer, and writer. He was Chairman and CEO of General Electric between 1981 and 2001. When Welch retired from GE, he received a severance payment of $417 million, the largest such payment in business history up to that point. He had a radioactive personality and a reputation for grooming top corporate leaders.

Welch’s "4E’s" of leadership were the key to his success. “The 4E Leader is the complete package. He or she has great energy, can articulate a vision and inspire others to perform, is a fierce competitor, and consistently meets his or her financial goals.”

Based on this formula, everything starts with energy, which kicks other vital leadership characteristics into motion. In addition, strong leaders follow the "Authentic Leadership Model," which incorporates, and expands on, 4E characteristics. Its 12 essential traits are:

  1. "Character/Integrity" - The strongest leaders are the ones you can trust.

  2. "Competence/Acumen" - Excellent leaders understand business and demonstrate an instinctive intelligence about what to do.

  3. "Think global" - The best leaders know about the worldwide marketplace.

  4. "Customercentric" - These leaders understand that business begins with customers.

  5. "Welcome change and disdain bureaucracy" - Leaders embrace positive changes and foster flat hierarchies.

  6. "Strong communicators" - Having "empathy" puts you in a better position to motivate people. Have a heart; don’t bark your commands.

  7. "Build effective teams" - Leaders enlist the best people so they can build good teams.

  8. "Focus on achieving the objectives" - Pursue goals that best serve the organization.

  9. "Great energy and spark others" - Leaders demonstrate vision and motivate others.

  10. "Infectious enthusiasm" - This is a "force multiplier" for the organization.

  11. "Achieve and deliver" - Leaders meet or exceed their objectives.

  12. "Love what they do" - Leaders relish plunging into the job every day.

Change is the only constant

  1. "Explain the new rules of engagement" - The author continually repeated his goal that each unit within GE should be the best performer in its market segment.

  2. "Deal with change head-on" - Don’t waffle or apologize about the fact that change is needed. Welch made the need for change a continual refrain within GE.

  3. "Paint a vivid picture of the finish line" - Help others visualize the objective. People are naturally motivated to set goals they can see. As a leader, articulate a shared vision of the future so employees have a clear target.

  4. "Candor first, foremost and always" - Be frank and open. Welch liked transparent organizations without boundaries or silos.

  5. "Overcommunicate" - Develop a mantra or statement that describes what you’re trying to accomplish, and repeat it at every turn, even after you get sick of saying it. This provides a defined sense of direction.

  6. "Exploit the opportunities that change brings" - Whether starting new initiatives or acquiring new companies, find ways to use change to improve your position.

  7. "Reiterate that change never ends" - Accustom people to the notion that they’d better learn to live with change because it isn’t going away.

Gearing up

Having energy is great, but how do you energize others? How do you transfer your passion to them? Here are a few suggestions:

  1. Establish a few obvious objectives to focus attention in the right direction.

  2. Encourage and share new ideas. Fresh ideas are inherently motivational and exciting.

  3. Institutionalize learning by becoming a learning-based organization. This will open people’s minds to new ideas and give them a sense of fulfillment.

  4. Encourage informality. Now and then, forget the tie or the high heels.

  5. recognize changes on the horizon. Determine what the "next big thing" is going to be and position your company to capitalize on it.

  6. Set bodacious goals. Stretch. If you think bigger, you’ll accomplish more.

  7. Bolster your incentive plan. Let others know that excellence will be fully rewarded.

Feeling Edgy

Welch ordered all GE managers to identify the 20% of top performers among their employees, the 70% who were in the middle and the 10% at the bottom. He awarded stock options to those at the top and ordered managers to fire the bottom 10%. Managers who couldn’t bring themselves to fire the Cs soon found themselves with C ratings.

Ready! Aim! Execute!

avoid the 11 pitfalls that lead to poor execution. These are:

  1. Bad managers - Do not hire or retain managers whose values are inconsistent with the company’s ideals. They’ve got to go, and the sooner the better.

  2. Flawed structural systems - Poorly designed organizations have too many layers, silos and chiefs. Simplify the organizational chart.

  3. Poor choices - You’ve promoted the wrong person or made a bad personnel move. Admit it and correct it, either by termination or by transfer to a more suitable role.

  4. The anti-hero - If you’ve hired or promoted otherwise capable managers who fail to inspire others, see if coaching and training can teach them to motivate their teams.

  5. Slow performers - Some managers start off weak. Try to fix their problems. If you can’t, see item three above.

  6. Inflexibility - A manager who cannot adjust when circumstances change presents a problem. Conduct a frank discussion about his or her specific shortcomings. If the manager doesn’t accept the warning gracefully, don’t anticipate a positive change.

  7. Nonperformance - Managers who have been trained to avoid "the big mistake" often are unable to make difficult decisions. Assure them that nobody is right 100% of the time, and that you will correct honest errors, not punish them.

  8. Lack of focus - These managers may be awash in information overload and unable to discern the pivotal factors in their decisions. Coaching is a good cure.

  9. A "tin gut" - Managers who lack good decision-making instincts can set back an entire organization. Monitor them carefully and give them candid reviews.

  10. Egomaniacs - Weed out these morale killers.

  11. Malaise - The Welch leadership system requires a sense of urgency. Low-energy, slow motion managers need close coaching to see the problems their sluggishness causes.

Welch’s Impressive Protégés

One way to measure your personal success is to count how many future leaders you groom. The strength of Welch’s protégés extended his impact on American business. They included:

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