We work up this past week to the sad news of the passing on of Jack Welch an American CEO of General Electric (GE) company for 20 years. For those who do not know Jack Welch, he is one guy who is renowned for changing the face of leadership and that of the 21st CEO.
Welch was a visionary and a role model who increased the market value of GE by a whopping 4000% in his 20 year tenure (US$12 billion to US$410 billion). He is a true legend in business and immediately after the announcement of his death United States President Donald Trump twitted:
“Jack Welch, former Chairman and CEO of GE, a business legend, has died. There was no corporate leader like “neutron” Jack.”
Upon completing his tenure of office as a CEO, Jack focused his attention on executive coaching, and it is in one of his coaching sessions to a group of CEOs that he made one of his famous remarks that; “The single most important attribute of leadership is generosity”.
The contemporary CEO must not only be an expert at addressing the commercial verities of products, markets, and competitors. Having friends you care about, younger people you mentor and individuals in need whom you help are all the whole mark of a business-in-society attributes the 21st century CEO must possess. The attendance by President Cyril Ramaphosa at a funeral of a young girl who was raped and murdered by a convict on parole is the only most recent example (closer home) of the pervasive, burgeoning importance to corporations of business-in-society gesture.
Ramaphosa seized the opportunity to even articulate issues of national importance. In virtually every country across the globe, a broad range of governmental and ethical issues directly and immediately shape what companies, institutions or organisations can and cannot do.
Today’s shifting business landscape; present an ever-changing, ever-expanding and often inconsistent array of rules and requests to promote economic growth and to protect workers, consumers, investors, communities and the public welfare. These factors may shift dramatically as the political pendulum swings back and forth in different directions. The challenges of business-in-society issues arise in many different settings and this calls for dynamism in those leading corporations business, and nations.
Influence and Power in Leadership
The concept of power and leadership has been and will continue to be interconnected. While an individual may exert power without being a leader, an individual cannot be a leader without having power. One might ask, what is power? Some authorities have described power as “the potential to influence others. Jack Welch was larger than life and the heart of GE for half a century. He reshaped the face of this company and the business world. Jack was a strong and constant influence to those he worked with in turning around the fortunes of General Electric Company.
Leaders must be able to influence their followers to achieve greater performance; their superiors and peers to make important decisions; and stakeholders to ensure the vitality of the organisation.
However in some instances the temptation to abuse power is prevalent and very often power has been excessively applied with very negative impact on the recipients and entire organisation.
Flexibility and Agility
Welch became the leading proponent of the business theory known as “Six Sigma,” the push to constantly improve the way business is conducted at a company.
Under his theory, any business unit that was not either the leader or No. 2 in its market should be fixed, sold or closed.
It also called for managers at the business to be ranked, and those at the bottom of the ranking to be cut loose. By following those rules, Welch became known as “Neutron Jack,” as he cut both divisions and individual managers whom he believed were not performing at a sufficient level.
When most people think about power, their minds go immediately to the control that high-level leaders exert from their positions atop the organisational hierarchy. But power extends far beyond the formal authority that comes from a title.
For Welch, exercise of power was beyond the formal authority that comes from a title. His style of leadership attracted critics while he was CEO, who accused GE of manipulating or managing its earnings to smooth out results, timing when certain gains or losses might be reported. Throughout Welch’s time as CEO, GE reported nothing but steady earnings growth that met or beat forecasts, even when external economic factors created much more uneven results at its competitors.
The 21st CEO may also want to set global ethical standards beyond what the law requires, in part to forestall additional regulation. Setting such standards involves nuanced balancing of the interests of the corporation and the rights of—and duties to—stakeholders. There is a lot today’s CEO can learn from Jack Welch’s style.
As Bill Taylor observes: “The true mark of a leader is the willingness to stick with a bold course of action — an unconventional business strategy, a unique product-development roadmap, a controversial marketing campaign — even as the rest of the world wonders why you’re not marching in step with the status quo.
“In other words, real leaders are happy to zig while others zag. They understand that in an era of hyper-competition and non-stop disruption, the only way to stand out from the crowd is to stand for something special.”. Rest in Peace Jack!
Mandeya is an executive leadership coach, trainer in human capital development and corporate education, a certified leadership and professional development practitioner and founder of LiRD. —firstname.lastname@example.org/www.lird.co.zw.