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Chapter 16: Professor Welch Takes a Class
It is at Crotonville that Jack Welch comes alive. He feels more at home at Crotonville than at any other locale of GE, even more than at Fairfield headquarters. Crotonville is perfect for Welch, the ideal vehicle for him to get through to GE executives, and to find out what's going on in his company. Walter Wriston, a former member of GE's board, once said that the chairman and CEO would always be the last to know when something was going on in the company. Welch has always thought of Crotonville as providing him with a chance to show Wriston that he was wrong.
Jack Welch visits Crotonville twice a month, lecturing to GE executives, and mingling at receptions for more informal, oneon-one conversation. He speaks to some 1,000 GE executives a year through his teaching.
While journalists and authors have had access to many parts of GE, Welch has kept Crotonville largely out of bounds, in the belief that the presence of writers would discourage GE personnel from speaking openly and honestly to him. Welch, however, has permitted me to attend his Crotonville sessions in 1991, 1997, and in 1999. The first two times Welch asked me not to use a tape recorder, but to rely on notes alone. He clearly wanted me to be as unobtrusive as possible. Assuming that the same rules applied when I attended class with Welch in 1999, 1 quietly took a seat in the back row of the lecture hall, notebook in hand. I was onceagain prepared to be as inconspicuous as the proverbial fly on the wall. To my utter surprise, Welch began his remarks by introducing me to the audience. He was obviously getting comfortable with the notion of visitors attendingCrotonville sessions.
A visit to Crotonville with Welch begins at GE headquarters in Fairfield, Connecticut. Beth Comstock, the vice president for public relations, and I wait for Welch in the lobby of the main building. When Welch appears, he is carrying a small briefcase that he's been using since 1977. Inside are the charts he plans to use for his Crotonville lecture. He prepares for the lectures carefully, pulling together charts he has used at a recent talk to financial analysts or the board of directors, thinking about what he wants to say. He will use no notes. It's all in his head.
The three of us get into a car waiting outside the front lobby and drive a few minutes to a nearby helipad where we board a helicopter. Welch takes this 15-minute chopper ride to Crotonville often. He uses the ride to take one last look at his charts. Though sometimes the scenery is breathtaking, he barely looks out the window. Because of the noise of the helicopter's engine, conversation is nearly impossible. When we land, a van takes us on a 2-minute drive to a building where the classroom is located. Welch heads straight for the classroom-he can't wait to get started. The audience consists of mid-level GE executives who have been with the company for roughly 8 to 10 years, less for those from firms more recently acquired. They have been attending the 3-week manager development course, where they learned skills that would enable them to run one of GE's businesses. According to the syllabus, "participants develop executive skills in relation to key business issues, such as developing business strategy, competing globally, diversity and globalization, leading teams and change, and advancing customer satisfaction." It is the third week of the course and, while other senior GE executives have addressed the students, Welch is clearly the highlight, and a celebrity in his own right, so the audience is hushed in anticipation of this big moment.
Welch has budgeted 3 hours for his talk, but he will only stand up in front of the class for part of that time. One of his objectives during this visit is to get to know the people in the class. There are sixty or seventy in attendance, and getting to know them all would be out of the question. Still, he wants to make the effort. The room he walks into is known as the Pit. GE likes to refer to it as one of the most famous business classrooms in the world. The cavernous lecture hall contains five horseshoeshaped elevated rows of seats that force the lecturer to look up to the audience. Therefore, the lecturer feels as if he or she was at the bottom of a pit.
It is a spare room. There are no photographs of Jack Welch. No photographs of GE founder Tom Edison. No GE logos either. The American map and clock on the wall are the only adornment to the room. In front of each member of the audience is the obligatory name card. Jack Welch enters the room and to make a point, rather than head right for stage center, he grabs a second-row seat, making sure to face everyone. He takes off his suit jacket, looks around the room, as if trying to get a quick first impression of the group. He hopes to have some interaction with everyone there. So he begins each visit asking each person to introduce himself or herself and to mention the GE business for which each works. For almost everyone making an introduction, Welch has some comment or question. He will listen to the person mention a certain GE business and that will trigger a thought:
"How's the labor environment?"
"Congratulations on last year's performance."
"Your business is coming back?"
"Nice pitch you gave the other day."
"How much business are you doing?"
"How's that unit doing? Are the~ broke yet?"
To a member of an NBC television station, Welch quips, "You guys own the market up there. What does the sales manager do there?"
After certain Welch comments or questions, the audience laughs self-consciously, a nervous kind of laugh, and no wonder. Some of the boss's observations are hard to read. Is he praising me or making fun of me? He seems to be praising me, but does h have something else in mind? Meeting with the chairman and CEO in this setting, the audience has every reason to be nervous.
But they have been trained-during their work experience and here at Crotonville-to be confrontational, not to be afraid to take the speaker on. When they meet Welch or any other senior GE executive at Crotonville, they are supposed to practice-in a favorite GE phrase-"pushback." As GE defines it, pushback is not merely obeying a directive or carrying out an assignment that you regard as inefficient, pointless, or counterproductive; but rather, stating to your boss why you think there's a better way. GE wants executives who can display self-confidence, who can be assertive. And so, even in this, the chairman's ice-breaking segment, there is a surprising amount of candor coming from the group.
Welch has by now spoken to each member of the audience. The chairman has been neither patronizing nor antagonistic. He shows much patience. As for the audience, few seem really intimidated. He gets their respect, but not their adulation. Welch has created an informal feeling among the group. They pick up on that. No one calls him Mr. Welch. It's always Jack.
Welch rises from his seat in the audience, moves quickly to the front, and stands near an overhead projector. He begins his presentation, but quickly gets into a conversation with members of the audience. He seems genuinely interested in what they have to say, and they respond positively to that. But they understand that he has not come to listen to them give lectures. Their comments are brief, to the point.
After a few moments, one member of the audience comes to the front of the room and runs through a series of questions that the group has prepared for Welch to answer. It is "pushbacle' time. The questions have to do with personal development and job satisfaction and how those things can be improved. Welch has thought long and hard about the proper ingredients of business leadership during his 18 years as General Electric's chairman and CEO. But today, as in recent weeks and months, he bears down on one theme over and over again: the importance of a manager, including those in the audience, rewarding performance. "Rewarding your employees-that's what it's all about, 11 he tells the audience. "The most important thing I do as a leader is align the kind of rewards I give out with the kind of behavior I...
