By Dean Tsouvalas

Jack Welch, former Chairman and CEO of General Electric, made an indelible mark on corporate America through his unique management style and business acumen. Nicknamed “Neutron Jack,” he took GE from a market value of $13 billion to more than $400 billion while at the helm. When we had the pleasure of interviewing him and his wife, Suzy, at the recent New England Xpo for Business, we found them both charming and encouragingly optimistic about the economy’s future. In the interview with Jack, we sought out his thoughts on the economy, President Obama’s policies, and the future of business. With Suzy, our focus was more on her New York Times bestseller 10-10-10: A Life-Transforming Idea.

Jack Welch

Jack is, in the estimation of many, one of the great CEOs of the last half century; in 2000, he was named “Manager of the Century” by Fortune magazine. Most of our readers know his background, so we’ll say only that his is a true Horatio Alger story of rags to riches - well, perhaps not rags (his father was a conductor on the Boston and Maine Railway), but certainly riches given his estimated net worth of more than $700 million. And he did it the old-fashioned way: by starting out at GE in 1960 as a junior engineer for a yearly salary of $10,500 and rising in little more than 20 years to become Chairman and CEO. Since leaving GE, Jack has been writing the weekly column “The Welch Way” with Suzy and is published in BusinessWeek magazine as well as more than 45 papers globally.

Jack appreciates successful organizations, so it was with great interest that we explored today’s economic issues with him.

Of Federal Reserve Chairman Ben Bernanke’s actions regarding the current economic crisis, Welch says, “Bernanke seems to be a guy operating on a clear intellectual framework and he’s done a hell of a good job. I think he saved the system, I think he’s an American hero.” In short, because of Bernanke’s actions, as well as other indicators, Jack is optimistic about an economic recovery and feels it presents a special challenge to corporate executives. When asked what advice he would give to CEOs today, he says, “You’ve got to be sure your company is stable, so you have to focus on getting cash. That is the number one priority: be sure you’ve got cash and that you aren’t depending on somebody else to finance you.” He goes on to say that, “… you’ve got to communicate like never before. Employees are frightened, people are paralyzed. Your people have got to know why you’re doing things, where you’re going, and what’s in it for them to go there.” Referring to his famous 20-70-10 rule (reward the top 20 percent of your employees; nurture the 70 percent who have potential; and then manage the remaining 10 percent “up or out”), Jack says, “It’s never been more important, because if you treat your best badly now, there will be a recovery and they’ll be gone in a minute. So never lose sight of this in a recession … your best have got to know they are your best.”

As for the employees a corporation must let go, he adds, it’s important that you treat them fairly and with dignity. And lastly, you go and “buy or bury your competition.”

As much as he praises Ben Bernanke (and Henry Paulson, for that matter), Welch has serious criticisms for President Obama and the team of economic advisers he’s assembled. In his talk at the Boston conference Jack said, “[All the advisors] are smart, creative … and they’ve never worked a day in their lives in business.” This echoed his comments on MSNBC’s “Morning Joe” show in March when he said, “This guy [Obama] is locked in another world and he’s throwing all these initiatives into the game in the middle of a crisis … You couldn’t run a company of 300,000 if you had five initiatives going at once. The employees would throw up their hands.” He called it a flavor-of-the-month approach in which people don’t know what they’re doing and where they’re going. “Focus on the economy!” he said with fiery passion. (He is, by the way, equally critical of the Bush administration, saying that they became too focused on the Iraq war, let the economy fall by the wayside, and “… spent like drunks.”)

It’s this imperative focusing on key issues that he would also emphasize to corporate CEOs as they navigate their companies through today’s economic shoals. For him, focus means, “Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion.”

Of leadership itself, and whether a leader is born or made, Jack says, “A little bit of both. Good leadership [involves] a lot of pattern recognition, so you have to have some experience with pattern recognition. It starts pretty early, that gene of affecting people around you.” He adds that a leader can work on developing skills that are not innate, however, making oneself a better leader. He used to be a nervous wreck when he had to give a speech, he points out, because he stuttered. Yet today, “…I can go in front of 10,000 people at Radio City and not give it a second thought. And I don’t even have a script! That is truly made; that wasn’t born.”

A shared philosophy

Welch’s message of focus and deliberation dovetails nicely with his wife’s ideas as expressed in her new book 10-10-10 (10 minutes, 10 months and 10 years). Suzy and Jack Welch met in late 2001 when she was editor of the Harvard Business Review and traveled to New York to interview him. As Suzy said in a CBS interview with Dan Rather, “The first time we met and [at] that first, very exciting, wonderful interview, it’s fair to say sparks flew.” Apparently Jack was equally smitten, for in the same interview with Rather he said, simply, “I fell in love.” Not long after, they got married and since then, they have collaborated on a number of things including Winning, a number one Wall Street Journal and international bestseller, and its companion volume, Winning: The Answers; a reality TV Web series for Microsoft in which they help companies work out critical business issues. And, just last month, they announced the launch of the Jack Welch Management Institute about which Jack says, “I can’t remember the last time I was as excited as I am today, as we launch a new online MBA at Chancellor University which will bring together the best of the traditional MBA with the ideas and practices in Winning. We’re doing something really new and different, with a terrific team – creating a global, integrated, relevant MBA for people at all levels of their careers. Suzy and I are thrilled to be entering the educational space of the future.”

10-10-10

Jack and Suzy Welch are doing a lot these days in collaboration, but it was Suzy’s book 10-10-10 we wanted to talk about when we caught up them a few days after the New England Xpo for Business. The book’s numeric title refers to three time frames: the immediacy of now (the next 10 minutes), the foreseeable, near-term future (the next 10 months), and the long-term future (the next 10 years.) Suzy’s argument is that too many people are steered by impulsive responses to the pressures of today’s accelerating world, with its clashing priorities and confusing options, and, “We make decisions based on guilt and gut.”

Consequently, many of us find we’re not living the life we’d wanted. Instead, against our best intentions and impulsive decision by impulsive decision, we find ourselves channeled into a different kind of life. In short, we passively let life happen to us rather than making deliberative, thoughtful choices to actively shape our lives. The temporal benchmarks of 10-10-10 provide a framework for transforming your life from one that is force-molded by circumstance to one that is consciously shaped. Her answer, both simple and profound, is to ask, “What will the consequences of my options be in 10 minutes, 10 months and 10 years?” It sounds simple on the page and it’s honest and straightforward. However, it’s also profound because it demands answers not only for simple, but for complicated decisions as well. It also implies you need to know a lot about yourself to answer these seemingly simple questions things such as your deepest values and beliefs and your fondest hopes and dreams. As Suzy tells us, it’s a way of saying to yourself, “Okay, what do I really want? Who am I, really? What are my values?”

The most important question here is the middle one: “Who am I, really?” The answer to the other two questions helps define this. But who can answer that essential, ontological question without long, soul-searching thought? And therein is the power of 10-10-10: it provides an approach for excavating a compelling, choice-influencing definition about your fundamental being. It’s nothing short of the meaning of life question. And there is a specific application for business executives because it can be a management tool that, “Everyone can speak instantly because it keeps bringing you back to the organizations values,” Suzy says.

When we asked what are some of her most asked questions, either on Twitter or while on her book tour, she felt there is a great deal of “uneasiness and anxiety about the future of business.” Suzy and Jack firmly believe that, “Business is a force of good in the world, that business creates jobs and therefore creates hope so it creates the future.” Suzy continues, “We are gigantic advocates and supporters of free market capitalism because we think, like Winston Churchill said, capitalism is the worst system, except for all the others that have been tried.”

Thus, there is a common theme to the thinking of both Jack and Suzy Welch, and that is one of focus. Jack expresses it by suggesting that President Obama needs to sharpen his focus on the economy rather than introducing a suite of initiatives that touches nearly every aspect of our society. Suzy stresses the disciplined personal focus required to sort through the inundation of options that present themselves in our daily lives so that our choices are grounded in the few things that are of utmost importance to us. It is easy to see that their thinking has influenced each other and that, together, they do indeed represent thought raised to the power of two.

Additional reporting by Norman G. Gautreau.