Jack Welch's 4E's + 1P

Jack Welch, former Chairman and CEO of General Electric, exercised an inspirational, innovative leadership style that can be seem in some of the top CEO's today. He embraced change and had an uncanny ability to hire the right people while giving them room to spread their wings under his "Lead more, manage less," philosophy.

"We are constantly amazed by how much people will do when they are not told what to do by management."

He was known to get rid of the bottom 10% of his managers and rewarded the top 20% with bonuses and stock options. Jack Welch took care of his employees by rolling out the stock option program to 1/3 his employees. For employees who did not perform or were not team players, he got rid of them.

So what did Jack Welch look for when he was hiring?

1. INTEGRITY: people with integrity tell the truth and they keep their word.
   
2. INTELLIGENCE: strong dose of intellectual curiosity with breadth knowledge to work with or lead intelligent people in today’s complex world.
   
3. MATURITY: handle stress and setbacks, and enjoy success with equal parts of joy and humility.

It then took years for Jack Welch to create 4E + 1P. A summary of 4E + 1P is below:

ENERGY (positive energy): ability to go, go go - to thrive in action and relish change. Starts the day with enthusiasm and ends the day with it also. Rarely gets tired. Doesn't complain about working hard, in fact, they love to work hard. Loves life in general.

ENERGIZE (ability to energize others): ability to get people revved up. Inspires the team to take on the impossible. People want to work with these people.

EDGE (courage to make the tough yes/no decisions): know when to make tough calls even when all the information is not present. A competitive edge and a will to win.

EXECUTE (ability to get the job done): putting decisions into action and pushing them forward to completion, through resistance, chaos, or unexpected obstacles. Winning is about results.

PASSION: heartfelt, deep, authentic excitement about work. Care about colleagues winning, Love to learn and grow, and love seeing people around them do the same. Tend to be passionate about everything in life.

"We have found that by reaching for what appears to be the impossible, we often actually do the impossible; and even when we don't quite make it, we inevitably wind up doing much better than we would have done."

The year before Jack Welch left, revenues increased to nearly $130B from $26.8B in 1980. General Electric's market value also grew from $14 billion to more than $410 billion at the end of 2004, making it the most valuable and largest company in the world. (Today, General Electric is a Fortune #5 company amassing $183B in sales with $17.4B in profit and market value of $633.48B.)

Comments

[David Chao]

I have heard many good things about SuccessFactors as well! Wish SFSF continued success.

[Mike Leflar]

Great post, Dave!! SuccessFactors, one of the hottest stocks lately (SFSF), is the global leader Business Execution software (BixX).

The product stack was built upon the ideas of Jack Welch and is changing the way people work. The company enables the same Meritocracy that Jack espoused.