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A ''gutsy'' book
Jun 24, 2003 04:09 AM 6132 Views
(Updated Jun 30, 2003 09:13 PM)



Jack : Straight from the gut is a “gutsy” book. I started reading this at 35,000 feet and that sums up what the book is about – a view from the top of the corporate ladder.

Jack describes in detail his forty years at General Electric (GE) – the last twenty of them as Chairman and CEO. GE is one of the largest and best run American Corporations. I often like to compare it to the Tata’s – they are into everything – right from Appliances, Bulbs to Aircraft Engines and Medical Equipment including a Broadcasting Station – NBC. The sheer depth and breadth of GE amazed me and I often wondered of what makes GE tick. This book does help in answering some of the workings of GE from Jack’s perspective.

Being a management student (I still consider myself a student – the day I stop learning, is the day I cease to exist) – there are several lessons one can learn from this book which can be useful in either your job or life in general.

Fore Gut:

His formative years were shaped by his mother – Grace Welch, who imbibed in him the spirit of competition and also how to be a sporting loser – an important lesson which were to help Jack in his later years.

Jack is a Chemical Engineer by profession and after completing his PhD joins GE Plastics and finds himself being given an opportunity to lead the division. With no formal Management training, he resorts to common sense - a sense which is not so common. Right from the beginning he dislikes the bureaucracy of GE and tries to foster an environment of informality.

The performance of GE Plastics gives him high visibility and he finds himself in the race for the top slot. What follows is a description of the selection process and the politics that makes him eventually the Chairman and CEO.

Mid Gut:

Jack starts of his CEO tenure by challenging business units to either “Fix Sell or Close” – a strategy to weed out the poor performing business units. In the process Jack was also able to eliminate Business Units which had a poor strategic fit.

He got tagged with the title of “Neutron Jack” – as there were massive layoffs. At the same time he believed in creating a world class organization and retaining the best resources for which he created the Crotonville Management center for training.

The acquisition of RCA (Radio Corporation of America) was a major feather in his cap.

He describes some simple processes for performance appraisals of the staff and established the “Vitality Curve” which is a unique concept - every manager was responsible to identify the bottom 10% of least performers on an annual basis and fire them. This was a tough call but helped GE businesses remain profitable.

His concept of “Work Out” – listening to the people in the field without the presence of their managers helped to identify the real issues.

He introduced concepts like “Boundaryless” organization, “Six Sigma” quality control process and “Deep Dives” where he used to pick any topic and peel back the layers - this was his way of keeping pulse on the business.

Hind Gut:

His final years were spent in trying to find a successor. He used a similar process (minus the politics) which was used for him by Reg Jones – his predecessor. The process is explained in detail and makes for a very good read and becomes emotional at times when out of the three finalist – he had to break the bad news to two of them and finally ends up selecting Jeff Immelt from GE Medical Systems.

Also his final years were pre-occupied with the Honeywell merger which did not pass the European Commission.

Take Aways:

Some of his messages and descriptions which I would recommend:

# His comment on the GE bureaucracy or layers. The bigger the organization, the more the layers. “I used the analogy of putting on too many sweaters. Sweaters are like layers. They are insulators. When you go outside and you wear four sweaters, it is difficult to know how cold it is”. Jack believed in few levels of reporting and helped flatten the organization.

# His vision was to be either No.1 or No.2 in each of the business units. With a careful strategy he weeded out the non-profitable business units which paved for GE’s growth.

# “We didn’t fire the people, we fired the positions, and the people had to go”.

# I liked the description on NBC – it gives a good insight into the working of the TV media.

# His visit to India and how he was treated royally.

# His passion for golf.

# His loss of the Honeywell Deal. “Just imagine if you bought this beautiful golf course and in order to close the purchase, the city officials demanded that holes two, three, four, five and eight - the best holes along the water – must be given up to another golf course in the area. And then they ask you to give up part of your own house.”

# His final speech before he handed over his reins to Jeff – “Forget what we have achieved. Forget about yesterday”. Today’s clipping wrap yesterday’s fish.


The language is lucid and simple – almost conversational. The book is well supported with pictures – from his personal album and GE official photographs. It is enhanced by copies of handwritten notes – mostly written on paper napkins from bars / restaurants.

Jack Welch retired in Sept’2001. This book was written along with John Byrne from Business Week , costs $29.95 and has 480 pages.

I was given a copy as a token of appreciation by my company – for climbing one more step in the ladder. From where I stand, I can see the summit. Hopefully some day, I get to scale it.

This book is a must read for the management student and anybody aspiring to climb the management ladder.

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Straight from the Gut - Jack Welch