Elliott Masie’s Learning TRENDS - March 4, 2020
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Jack Welch Learning Interview by Elliott Masie in 2001
One of the most memorable interviews I have ever conducted was with Jack Welch, the former CEO of General Electric. I interviewed Jack right after he retired from GE, a few weeks after 9/11 at my annual learning and technology event.
Jack Welch was one the first CEOs to really embrace and implement a learning culture. He hired Steve Kerr, one of the first CLOs. He built and often presented at Crotonville, the GE Corporate University site. And, he instilled in his team leaders the importance of learning every day at GE.
Here is a transcript of my one hour interview with Jack Welch. He died this weekend and I remember his energy and his commitment to workplace learning:
Interview of Jack Welch, CEO of General Electric by Elliott Masie in October 2001:
Elliott Masie: Jack, you are in a room full of people who teach and develop training. What is your main message for this group?
Jack Welch: This is not a premeditated speech, but I have been preaching this idea for 25 years. The only sustainable and competitive value of a company is the ability to learn, to share knowledge, and to act on this knowledge. “Discovering a better way every day” is not a GE slogan, even if the company has followed this principle a lot. And it applies to any company in any market, and it must be practical in any part of the company. The idea is always to look for an innovative alternative that improves some characteristic of the company. So, we always manage to increase the company’s intellectual level. And this must be the challenge for all of you. It is part of the heart of the company. The thirst for learning and sharing knowledge in an organization is absolutely critical.
Elliott Masie: Jack, you started out as an engineer, so how did you come to this belief?
Jack Welch: Well, as I grew up inside GE, I realized - and I got very close to the top - that it is absolutely absurd for anyone to think that a single person leads GE. It is impossible to dominate all the activities of a company with so many sectors, and to know all the details that characterize its business. So, we had to find out what our role was.
When we were younger, a number of people could, in fact, manage GE. But at this point, we had to worry a lot more about the intellectual capacity of the organization, and how to distribute the knowledge internally. This was the only value we actually added: developing people, sharing ideas, and allocating resources. This was our job, because otherwise we would have no use. This is literally not about product review. In companies with a single product, and I don’t intend to offend anyone in the automotive industry or any other industry, but in these companies most people just don’t know. When people are promoted, they continue to do their old work, because they started as designers, and then became supervisors, and then design managers, until they became responsible for the department. Well, in this company you don’t have to know everything to have an opinion on everything. You can get to know a small part of the company very well. That’s why I say that learning needs to be part of the heart of the company.
Elliott Masie: What happens when a CEO makes a blunder?
Jack Welch: First of all, I made one of the biggest blunders in the company’s history when I bought Kidder Peabody, an investment bank. A typical case of almost no cultural alignment. I used this case constantly to learn. If the CEO can make a company’s biggest mistake for a decade, no one should be afraid to make minor mistakes.
We had several values in the company. Our number one value - assuming integrity as a fundamental part - is the ability to behave without resisting borders. This makes you look for a new idea anywhere. We all carry a card anywhere. This is the main value of the company today. So, there are 4 types of leaders:
* The person who has the values, customer focus, integrity, etc. except the behavior of not resisting the borders, and that manages to reach the objectives.
* The second type is the person who does not have the values and does not achieve the goals.
* The third type is the person who has the values and makes some mistakes. Give him a second or third chance and try to keep him on that line.
* What kills an organization is the fourth type. You consider yourself to be a leader in the learning process in companies that classify themselves as learning organizations. They do not have a behavior that promotes the emergence of new ideas or do not cultivate the breaking of barriers or borders. They do not believe in the need to cross these borders. So, I say, Elliott, without a doubt, you have to give up people who do not believe in the fundamental values of the company.
If you believe what I believe - that learning is indeed a competitive advantage that the company can have - and there are people who do not practice these ideas on a daily basis, it is better not to waste your time anymore. You have to give up people who don’t believe in the company’s core values.
Elliott Masie: Let me pose a series of objections that an executive could make about why not to invest in training. Tell me what you would answer. “If we train employees and make them very good, they end up leaving the company.”
Jack Welch: Absurd, madness. I mean, your role as a manager is to develop the organization’s performance. Second, your job is to create an atmosphere where everyone can achieve their dreams: an exciting place. If people leave, it’s the boss’s fault. Not because of people. You did not create an atmosphere, you did not arouse excitement, you did not create all the action. A person spends most of his life at work. Why then shouldn’t the job be fun or at least enjoyable? Find reasons to celebrate everything, every little victory. Create a place where people love to work or invest their career time.
Elliott Masie: “We would love to invest in the training of our professionals, but everyone is so busy. We cannot distract them. Their mission is too critical.”
Jack Welch: You know, this is probably the most difficult barrier to break. To break it we told everyone that the employees belong to the company and that we were lending them to the departments. We make this a principle. I hate organizations that say they invest in the development of their professionals, but that their professionals hear from their bosses, “Go to training because the CEO thinks this is important”.
Elliott Masie: “We cannot offer training. Our company is shrinking, our revenues are low, and we are cutting expenses in all sectors.”
Jack Welch: See, let’s consider the scenario we are in today. All present themselves as professionals who are prepared and ready for challenges. Differentiation is critical today. If you don’t water the garden it won’t stay in flower, and worse than that it will die. This year there won’t even be a canceled course in Crotonville, which is where GE’s education center is located. I cannot say that an organization will not make cuts, but if it has learning as a fundamental principle, surely its CEO will not approve cuts in training.
Elliott Masie: A broad question about technology: how do you see the impact of technology on corporations, on our society?
Jack Welch: Total. Take for example the Internet. This is in fact - and forget the bubbles created from dot-com companies and the problems generated by them - the most important revolution that I have seen in my entire life. It is not just transforming relationships. It is bringing transparency between customers and companies. We no longer have a salesperson having to answer a customer where the goods are. What used to take days to answer now takes a few minutes. People can now track information in a simple and transparent way. Information is available to everyone in the organization, so knowledge is not only shared by the top of the organization: everyone has access to it.
Technology allows us to safely and consistently monitor various processes, in addition to allowing us to train our engineers from the plants they work in. Today we have information that we did not have in the past. We no longer evaluate only the hours of training, but the benefits acquired by each plant.
I believe that feedback is essential for things to always improve…for me, the biggest question about training concerns feedback. My training, I think it worked and as a whole has worked as planned in the organization. We currently have 25 CEOs among the Fortune 500 largest companies, which we have trained. Someone thought they were good, and in less than 10 days, 2 of them were hired by companies like Home Depot and 3M. So, you need to know how to measure knowledge. Not only measure training, but its impact on the organization, on people, and on achieving goals.
Elliott Masie: Who inspired you? Who was one of your most powerful teachers?
Jack Welch: Without a doubt, it was Peter Drucker. There is no one, among many, like him. There are two issues that I found in my readings in the 1970s that changed the way I look at business. He takes the complex and makes it simple. The first question was if you were not already in a certain business, would you go into it today? If not, what would you do? That came as an “enlightener” for me. The other question was, always make someone’s room behind you be that person’s front room: make everyone feel important. Find people who get up every morning and care about doing this.
Elliott Masie: What about learning style and mentoring?
Jack Welch: I feel like I’m being immersed. I mean, let’s dive into e-business. As you all know, you as an expert in technological learning should know more than anyone that knowledge of the Internet is inversely proportional to the age of the organization. So, I was in London, and this is an example of learning, it is a transfer of learning. I was in London having a meeting with the head of a European financial company. We were arguing. He was about 38 years old and during the discussion he said, “I met with my mentor for two hours this morning”. I looked at him and said - the phrase came to my head at the moment - I said, “Your mentor? I thought you were the boss. Who is your mentor?” He said she was a young woman, 23 years old. She came every day for an hour or two in the morning to teach him how to surf the web and make him feel adapted. I thought this was a great idea.
I went to Budapest the next day and gave a lecture, which I thought would please the audience and related to the idea that I just got from this young man in London. People came after me with their usual lines, so one person said, “You have a great idea!” It really was the best. It was this idea, this person…on the following Friday, about 10 days later, the top thousand people at GE, counting on me, had a mentor. We had, in general, someone under 25 in our office for two to five hours a week teaching us how to navigate. We learned two lessons from this. We learned to use the Internet and we also managed to gather all the corridor gossip at once. So, the top-down organization has intellect and gossip in one package.
Question from Audience: My question has to do with the role of organizations in the world today. Many people are saying that terrorism has to do with the poor distribution of wealth in the world and since corporations generate wealth, I would love your comments on whether the role of these organizations may have led to this problem.
Jack Welch: Globalization has become the newest issue on the agenda. Everyone wants to give their opinion on it. I don’t usually think about 9/11. Although the World Trade Center was the target, the goal was to reach business. The Pentagon, unfortunately, has been hit. The Eiffel Tower was the target two years ago. I think it was an attack on our way of life. Let me think about globalization again.
Globalization…how many people here are from Ireland? I think three or four. Ireland is probably the best example of globalization, of what it can do for a country. It totally changed Ireland. In 20 years, Ireland has gone from a poor country to a very rich one. Ireland really is, and I was there a few weeks ago, concerned about Gateway, which announced that it is moving from India to Ireland. The press was furious. We know, what’s going on? Ireland took jobs from the USA for years, took jobs from Europe for years, and this started from the moment they raised the standard of living. Go to Prague, Budapest, go to India, go to China. Go to places where there was a touch of globalization. They ended poverty. There are now other statistics established. The “I don’t have” versus the “I have”. The hole widened.
Globalization has not cured everything. It didn’t cure cancer. It did nothing to Afghanistan. It did not touch any of these places. But the facts show that she did her best to try to end the “I don’t have”. Mexico benefited. Ireland and Europe greatly benefited. So, many of these places are better because of globalization. Things are much better in all countries where globalization has occurred. New factories are built to global standards. I think corporations are the best bet, but not the only one. Although it is the United Nations, the United States will have enormous challenges in rebuilding the nation. It will be something great. How does Pakistan handle this? Like Iraq? Like Afghanistan? How will everyone walk together? It will not be globalization that will solve it. It will be organizations and corporations that will solve the problem and that need to solve the problem, because they depend on it to expand. Corporations are responsible for trying to globalize the world and consequently end poverty.
Elliott Masie: Jack, this is my last question for you. So, if you tried to measure everything, inspire and send these people back with a basic message about the intersection of business, the organization that learns and what you see as the power of technology, what they could take, what they can bring to a COO or a CEO, what can they say? “Jack Welch said that we should…”. What are the impact phrases that you can transmit to them, to provide them with on the way home?
Jack Welch: Just what someone would like to hear, right? Jack Welch told them. No, this whole business is about what you do. It’s about growing the fundamental intellect of the organization every day. This makes organizations win. It is inspiring people to learn through excitement and energy that can make them learn great things from this learning, and it is how you energize an organization. Making them curious, making them say “wow!”, creating new learning. This is what makes an organization win. It doesn’t matter if it’s an Anheuser Busch or a GE or whatever. It is raising the capacity of a team. It is to make the team better. It’s all about winning. It’s putting the best team on the field.
You have the tools that can grow your organization’s intellect. You have to challenge that organization where the acronym NIH (Not Invented Here) is the most hated word in corporate vocabulary. Everyone has to wake up in the morning excited to learn. “Finding a better way every day” is not a slogan but a way of life. Reaching and dreaming can make people around you feel the energy. You can excite them in order to keep them always stimulated, recalling that the success they obtain through these attempts are learning experiences and a foundation to keep going forward.
So, your job is to be a real facilitator, the real engine that makes you share, learn, search, be curious about the blood that runs in the company’s veins. And if not, I challenge you to try and do it this way in your company and if you can’t, go somewhere where you can fill it yourself, as there are thousands of organizations today that see learning as one of the most important competitive advantages.
Our Conversation About EveryDay Learning:
After our time on the stage, I spent some additional time chatting with Jack about “learning every day”. Here is a sense of what he shared:
“Each morning, I want every person at GE to know that 2 things will happen that day:
* Today, I will learn something from another GE employee, supplier or customer that will help me do my job better.
* Today, I will teach, support, mentor, advise and support the learning of a fellow GE employee.
To be competitive, we must have learning EveryDay!”
RIP Jack Welch and thanks for your support of Learning!
Send comments or thoughts to Elliott at emasie@masie.com
Yours in learning,
Elliott Masie
Email: emasie@masie.com
Twitter: @emasie
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May 15, 2020 
