Management Secrets From Inside GE

Here's what it really takes to thrive at one of America's most demanding—and profitable—companies.


Former GE CEO Jack Welch.

By + More

Few companies can boast the performance of General Electric, one of the world's most consistently profitable enterprises. One of the top reasons is talent. GE recruits the brightest minds it can find and relentlessly cultivates its leaders, training them at its legendary in-house management school, known as Crotonville (for its location north of New York City). In addition to world-class CEOs like Jeff Immelt and his predecessor, Jack Welch, the GE system has produced numerous executives who have left to run other well-known companies. Jim McNerny of Boeing, Chrysler's Bob Nardelli, and Dave Calhoun of the Nielsen Co., for instance, are three GE alumni.

In 20 years at GE, where I was Welch's speechwriter, I learned a lot of key lessons—the kind they don't necessarily teach at business school. GE is notorious for demanding performance from its managers, weeding out those who don't deliver—and handsomely rewarding those who do. If I were to give a 10-minute management course, here's what I'd emphasize:

High energy = high hopes. There are some reasonably successful companies that don't require high amperage to do reasonably well. If you're comfortable in that kind of environment, fine. But I wouldn't want to work at such a company—or buy its stock. At a high-energy company like GE, the people who succeed cultivate a Type A personality, even if their shrinks or cardiologists object. Low energy, by contrast, equals low expectations. Welch once said this about a senior manager: "Yeah, he's good and he's smart, but he's low energy. I have to call him up and get him started on everything, or nothing ever happens." At GE, that's a wave goodbye.

Patience is a liability. There's continual tension in many companies between the demand for short-term results and the need for a long-term strategy. Feel you can't do both? The answer at GE: Yes, you can do both, and if you can't, we'll get somebody who can. Conversation over—along with your career, if you don't deliver. The top management at GE has no patience for either-ors. Anybody who asks management which is the higher priority—results today or performance tomorrow—gets "loser" stamped all over him.

Micromanage, meddle, and smell the latrines. It's essential to leave your management perch every day and mingle with the minions who ultimately determine the fortunes of your company. If a customer has a complaint—no matter how small (or how arrogant the complainer)—take the heat yourself over the phone or in person, to understand why you're failing him and losing business. Got a quality problem with one of your product lines? Hang out on the factory floor and listen to sweaty, angry people in overalls explain what they think the problem is. Part of your operation is losing customers? Spend an afternoon listening to the "grunts" who hate losing as much as you do and often have invaluable insights about why it is happening.

Substitute action for clichés. Don't call it a "deep dive" if all you do is get a tour from a plant manager and walk around in your suit wearing a hard hat and goggles. You'll look ridiculous—and never find out what's really going on Do you "delegate" for real, expending the effort to fully understand what your subordinates are doing? Or simply tick off bullet points assembled by staff? If your "leadership" consists of narrating PowerPoint slides points you only vaguely grasp, people will know it—both up and down the chain. Some of the more horrific career catastrophes I observed at GE involved unfortunates who walked into a conference room to brief senior leadership, with a flimsy feel for the substance of the briefings they thought would get them by. Instead, it was goodbye.

Change just to change. Stay on the edge, and never let yourself get too comfortable, no matter how well you're doing. There may come a day when you hear your colleagues in engineering, finance, or some other division having an animated conversation that you don't really understand. Queasiness and alarm should strike. You need to get back into the conversation quickly, no matter how much work it takes. The epitaph "unable to change" hangs over more career graves than any other.