By: Jack Welch



This entire book is about getting stuff done. And with things the way they are these days there probably isn’t a better time to be focusing on that.

Some people will say that Jack Welch is a relic from the 1980’s and the world has made his leadership style irrelevant and in some ways that might be true.

I’ve read this book three times now, first when it came out, again during the 2008 economic crisis, and again just this past week.

And I have to say that much of his advice couldn’t be more appropriate or more timely for the times we are living through right now. As we all bunker down for what appears to be very a uncertain year, his 8 rules for leaders is a great primer on what made Jack Welch such a successful leader.

Rule #1: Leaders relentlessly upgrade their team, using every encounter as an opportunity to evaluate, coach and build self confidence.

Jack was particularly known for his controversial 70-20-10 rule - you may have heard of it. This is where 70% of your employees are considered the life blood of your organisation, 20% are considered your stars, and 10% just shouldn’t be at your company.

Every year, each leader in the company was required to rank their employees in order of value, and then fire the bottom 10%, replacing them with people who have the runway to become stars.

Talent has always been critical to business success. If you are in the service business it’s literally all you have. So whether or not you want to be as ruthless as Jack Welch was, make sure you’re not treating everybody the same.

Remember fair does not equal the same. Most importantly, if you take anything out of this rule, it’s that you should be using every encounter as an opportunity to evaluate and coach your employees. I am sure if you ask them - and if you haven’t asked them in the past, please do - they will tell you that they crave it more than anything. They want to know where they stand.

So, what are you going to this year to upgrade your team?

Rule #2: Leaders make sure people not only see the vision, that they live and breathe it.

The world as you know it right now is changing. Newspaper and mainstream media are fearing for their lives. Permanent jobs are being replaced by freelancers, artificial intelligence and robots. Everybody is looking towards the future and wondering where their place in it is.

I’m certain that your employees see this happening and are wondering what the future holds for them.

So your job this year is to tell them. If you don’t a have vision for what the future holds you better get one, and then you better speak about it every chance you get.

Jack always said that “when you are sick of talking about it and when you’re pretty sure your employees are sick of hearing it, you know that you are on the right track.”

So, what’s your vision for the future and in particular what’s your vision for this coming year?

Rule #3: Leaders get into everyone’s skin exuding positive energy and optimism.

Jack used to walk around the halls of GE chomping on multiple pieces of gum and displaying one thing more than anything else, passion. Not that he always felt that way of course. There were times when he felt like he had just been hit by ton of bricks and really didn’t feel like putting on a happy face.

But he realised something critical. He was on a stage everyday and, like it or not, his employees were watching his every move. Not just listening to what he said but also to how he said it, and how he carried himself.

Like it or not your employees are watching your every move. It is easy to get fired up when things are going your way. When sales are coming in, when operations are getting everything out smoothly, and there are no huge people issues, being positive is easy. But that's not always the way things are.

It’s not easy when you feel like there’s light at the end of the tunnel, and you know that it’s not daylight coming in, but a steaming locomotive barrelling down the track. That’s when your positive energy and optimism are needed most. That’s where they separate the wheat from the chaff, and that’s where they separate the leaders from the managers.

Whatever cliché you want to throw at it, those are the situations where leaders are made.

Rule #4: Leaders establish trust with candour, transparency and credit.

Trust is such a huge issue now. So here are 3 things you need to do to get it according to Jack.

The first is candour. Jack likes to say that candour is a 4 letter word in business. But he single handedly changed the culture of GE during his time there by doing one thing - speaking his mind.

The second is transparency, which is kind of an extension of candour because what do you speak your mind about? Everything. Remember, transparency and candour are not all sunshine and rainbows. People know when you are giving them a line of BS.

So, if things are going to be tough for a while, let them know. If you have to freeze salaries for the next year, let them know. When finally things start turning around, let them know that, too.

The third and the last thing you need to pay attention to in gaining people’s trust is giving credit where credit is due. I’m hoping that one doesn’t need any explanation.

Rule #5: Leaders have the courage to make unpopular decisions and gut calls.

Leadership is not a popularity contest. Maybe sometime this year you’re going to have to cut back on free coffee or maybe take a drastic measure like letting go half of your staff. Whatever it is sometime this year you’re going to have to make a decision that your staff will second guess. Maybe they’ll even hate you for it. But if they trust you, they will know that it was the decision that had to be made.

Jack always used data and analysis to inform his decisions but he never had perfect information. That’s where the gut call has to kick in.

When was the last time you made a decision that you knew everybody would hate and you knew that it was the right thing to do?

Rule #6: Leaders probe and push with a curiosity that borders on skepticism, making sure their questions are answered with action.

Jack used to say that he wasn’t afraid of being the dumbest guy in the room. If he didn’t understand something he would ask about it rather than trying to look like he knew everything.

For instance, much of the 2008 economic crisis could have been avoided if more leaders had asked the dumb questions. So don’t be afraid to look stupid, it might end up saving your company one day, literally.

Also, when you ask a question make sure it is followed up by action. If they can’t come back to you with a better answer then put the kibosh on whatever it is they insist on doing because if you can’t understand it, it’s not worth doing.

When was the last time you acted like the dumbest guy in the room?

Rule #7: Leaders inspire risk by setting the example.

Jack knew that risk was the only way to innovate and move ahead. Doing things that are surefire winners is just business as usual. But, these days there aren’t that many surefire winners.

There is giant opportunity lurking out there for the truly brave.

You’re going to have to rethink your future anyways, it’s only a matter if you’re going to act now or going to act later. So as a leader, if you decide to act now and control your future as proactively as possible, your people are going to follow suit.

So stick your head out and take a risk. Just make sure that it is one you understand.

Rule #8: Leaders celebrate.

Jack celebrated like it was his job, literally. He did everything from keg parties to getaways to the tropics.

But celebrations don’t always have to cost a lot of money or be a big elaborate production. The reason we celebrate is to let our employees know that we care about them and that we value their contributions to the company.

There’s something fundamentally human about this. Even if things aren’t going as well as you’d like them to, it doesn’t mean that your employees don’t need to feel valued. They do.

So find smaller ways to celebrate. Maybe it’s a hand written letter to one of your staff, or maybe it’s a gift certificate for dinner somewhere. But there is something today worth celebrating at your business. Find it.