Welch's Life Lessons

Former GE CEO Jack Welch recently addressed an enthusiastic crowd of solution providers at the close of ScanSource's Impact Now Orlando, Fla., conference, taking questions from VARs in the audience and opining on everything from performance reviews to what makes a good manager.

"In a room like this you've got to say something important," Welch joked.

Welch told the audience that the key to effective management is defining the behaviors managers want in their company--and communicating those behaviors again and again.

"You have to get in the skin of every person in the organization, and you can't get bored with your message," Welch said. "You can't just say it once and expect it to happen. You have to repeat yourself until you almost want to gag."

Welch said he believes there are four types of managers: those who have values and make the quarterly numbers (with whom you have no problem, he notes), those who have the values but can't make the numbers, those with no values who make the numbers and those who fall short in both categories.

Welch said the last scenario provides an easy solution. "You shoot him," he joked, drawing laughter from the audience. The managers who don't make the numbers, but have the values, you give a second chance, Welch said. The inverse, he said, will kill a corporation. "The problem comes when companies talk about values and forget about

practicing them," he said. "You manage your company by holding values and numerical standards equal in importance."

Welch decried the mistreatment of HR departments and the application of management layers, which he said are nothing but filters that slow things down. "We fought layers. I hate layers," he said, recalling his tenure at GE. "Fight every layer that exists. You want the clearest communication as rapidly as possible to as many people as you can get."

At the open of the question-and-answer session, Welch kept the mood light after the first question, which suggested GE's channel position had been less than trustworthy in the past. "I believe we sold that part of the company," he said, laughing. He also used the opportunity to laud ScanSource's strong relationship with vendors and resellers.

"We didn't develop the relationships that ScanSource had developed," he admitted. "I've never seen a company that had relationships on both sides of the equation that had better things to say about this company."

Welch repeatedly stressed the importance of using the management position to encourage growth, candor and innovation. "You want to find ways to excite and have people innovate, and reward innovation," he said.

He asked the audience members who felt they celebrated enough to raise their hands. Few hands raised, many tentatively. "You better be thinking hard about why you're not celebrating more,' he responded. "The whole game is to excite that talent out of the people around you and see them be rewarded--that's the joy of managing."

When asked by Scottsdale, Ariz.-based JDA Software's Ted Ave-Lallement if he had any pointers for publishing a successful book, Welch was ready with another deadpan answer. "Here's my suggestion to get a great book," he said. "Get interviewed by the editor of the Harvard Business Review, fall in love with her, marry her," he began, before being interrupted by the laughing audience. Welch was referring to the way he met his third wife, Suzy Wetlaufer, who was in attendance.

He also offered some pointed criticism of Citicorp and Merrill Lynch for throwing out their CEOs without having backups in place. He called the decisions "criminal" and "ridiculous." When asked what presidential candidate he would support, the crowd grew tense. He discounted Democratic front-runners Hillary Clinton and Barack Obama, saying he didn't agree with higher taxes or protectionism. "I'm not in love with [Rudy] Giuliani or [Mitt] Romney," he said. "But if I had to choose now, I'd pick one of them."

Welch dismissed the idea of a mentor when answering a question about his personal influences, saying he preferred to get a little bit from everybody he admires. "Great leaders fight like hell to get people talking," he said. "You look everywhere. Every day is a learning experience."

In closing, Welch implored the audience to ask themselves what makes an effective manager. "Does exciting my employees turn me on?" he asked. "The reflected glory from how well your people do is without question the greatest kick you can get as a leader. I hope you get that joy from it."

Bart Collins, vice president of sales at Greensboro, N.C.-based Marco Integration, said he felt the speech was motivational and found Welch captivating. "He made me think about how you treat your employees," Collins said. Welch's remarks on the value of the human resources element also resonated. "When he said the team with the best players wins, that really hit home with me."

Ave-Lallement, group vice president of the hardware and services reseller business unit with JDA Software, said he felt Welch did a "phenomenal" job. "I was amazed at his off-the-cuff quick wit and deep knowledge on a vast array of subjects--with no preparation," he said. "He makes real lessons out of his experiences, which are told in a simple way for each of us to use in our daily business life."