Staight From the Gut

“If you like business, you have to like GE,
If you like ideas, you have to like GE.”
Jack Welch


“Jack-Straight from the gut” is written by former chairman and CEO of GE, Jack Welch, who over a period of 20 years turned GE into a $450 bn colossus, earned himself a reputation envied by any CEO around the world. In this book he brings together his professional and personal life with the management philosophy that was fundamental to his success.

Throughout the book Jack has talked about his vivid experiences in family and GE that taught him a lot of things. He considers his mother his foremost teacher who taught him to stand up to failures with grit. It is this grit and determination that earned him admirers throughout the world, including his boss and ex-CEO of GE, Reginald H. Jones. So much so that he appointed Jack as his successor, despite the fact that he was young and not very experienced.

Jack became CEO of GE on April 1, 1981, when GE was a $25 bn company, employing 404,000 employees with yearly earnings of $ 1.5 bn with around 500,000 plus shareholders. This was the time when he was given the name “Neutron Jack.” Reason being he went on a high cost cutting spree, laying off more that 100,000 employees by 1985 and selling a lot of business like the house wares.

The book seems to be an explanation given by him as to why he did all this. And it seems that he has been successful in bringing the point home. What Jack saw when he joined GE in 1960, was that though GE was huge, it was walking on weak legs of bureaucracy and shortsighted goals. These were something that he felt would destroy GE. As soon as he became the CEO, he made sure that the functional structure of GE was boundary-less, where there was free flow of ideas. Jack believed in facing the reality. And the reality was that GE had to change. It had to look for long-term sustenance and work with more passion and rigor towards this objective.

For this he introduced the concept of 4Es (Energy, Energize, Edge and Execute). He wanted GE to be No. 1 or No. 2, which he clarified in his first rendezvous with The Wall Street in 1981 as the CEO. He then goes on to discuss the methods adopted to achieve his goals. For this he uses examples of the $6.3 bn RCA acquisition in 1985, the revival of GE Capital into a $370 bn (assets) company, Six Sigma, Globalization and a few bad patches like the acquisition of Kidder Peabody, which proved to be a mistake.

All in all, the entire book gives an insight into the brain of the “Manager of the Century” (Fortune Magazine, 1999). It shows how his passion and love for new ideas and concepts changed GE. He took GE from people with conventional thinking and laidback attitudes to a high energy environment place that only believed in excellence, in whatever it did and does. It makes you understand how a good manager results in a good company and why it is necessary to take tough and unpopular decisions in order to reach the top. If there were a subject called “Applied Management” then this is the book to refer. Anyone who manages anything has something for him to learn. However, one has to be a bit patient with the myriad number of names and details. But in the end, the book is worth a read.