The adversity of knowledge
I’m years late getting to Jack Welch’s Jack: Straight from the Gut. I had to read it for a project I was working on recently, and I’m glad I did, but not so much for what he says. His story of his tenure as General Electric’s CEO is interesting, but the subtext is positively fascinating.
There’s no arguing with Welch’s success, except perhaps by arguing with his definition of success. GE was a big, profitable business when Welch got there. When he left, it was much bigger and much more profitable because Welch redefined success as winning. It was not enough to be profitable. Instead, the company had to shed every area of business where it could not be #1 or #2. Where global competitors were arising that would drive GE out of the business, that was a shrewd, preemptive move. But as a strategy applied across the board, it seems from Welch’s book to have had another motive as well.
Welch’s story is that of overcoming adversity. His family was comfortably working class. They did not have it easy, but they got by. That’s not the adversity I’m referring to. And while Welch obviously had to struggle and compete to make it all the way to the top, the story, as he tells it (of course), is of an honest process that rewarded his skills, drive and personal qualities.
The most important adversity in his story is that which Welch created. On the one hand, he is exceptionally modest throughout his book. He takes every opportunity to tell us of his mistakes, and to remind us that he didn’t know as much about any of the areas of the business as those who were running them. He claims to have been a poor—or at least nervous—public speaker. So, how does he account for his rise and subsequent success? In part, it was his passion and hard work. But lots of people work hard. More important, he says, was his integrity, by which he means his insistence on being who he is and not pretending to be something else.
Integrity is so important to Welch that he stressed it as GE’s #1 value. But, by insisting on his integrity, Welch implicitly defined his circumstances as corrupt: Welch succeeded because his integrity was a rare virtue at GE. Welch doesn’t state it this baldly or generally, but that is how his story reads. Time and again, Welch stands out because he’s the one willing to speak the hard truths, face "reality" and rise above the "butt-kissers," all because he was the one with the integrity to stay true to who he is.
Welch, in fact, realigned GE so that it was in perpetual struggle. The requirement to be #1 or #2 in the market meant that everyone at GE—after Welch’s mass layoffs—was in constant struggle to gain or maintain marketshare. And Welch instituted an internal system of "differentiation"—ranking—that required managers not only to rate their employees as As, Bs or Cs but to always assign 10 percent to the Cs. Then the Cs had to be improved or fired. That ensured that GE internally became a system of constant struggle and adversity. Or, so it seems from Welch’s book.
A system of adversity enables strong leaders to emerge. In fact, adverse times demand strong leaders. One’s left wondering if that is in fact what drove Welch to build adversity into the fabric of GE, creating an environment that needed a strong leader like Welch—one with the "integrity" to be who he is.
There are obvious advantages to having a tightly controlled and well-led enterprise. But as we look at the Internet and some of the most remarkable achievements on it—Linux, Wikipedia, the blogosphere, the Internet itself—we now have proof that there are also advantages to collaborative networks that spurn leadership. In fact, those networks are where you’ll find the true, untrammeled passion that is Welch’s other main value.
Knowledge itself often does better in a collaborative environment than in a competitive one. Debates with a winner and loser are usually not very productive or conducive to genuine learning. Collaborative environments that embrace many points of view, especially where those views are in perpetual conversation with one another, overall are richer in what they know and what they understand. Within them, knowledge can be what it is and not what the dominant side would like it to be. Knowledge finds its integrity in the perpetual conversation where it is in play. That play is not Welch’s idea of adversity because in it, there are winners but no losers.