Jack Welch: 'Don't Be a Victim'

By Kathy Gurchiek Jun 28, 2009
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Welch_Sunday.jpgNEW ORLEANS—Don’t be a victim, longtime HR champion Jack Welch told attendees during keynote remarks here at the opening general session of SHRM’s 61st Annual Conference on June 28, 2009.

The legendary chairman and CEO of General Electric Co. for more than 20 years, and the man Fortune magazine dubbed “Manager of the Century” in 1999, is a well-known proponent of HR.

“You have to have the guts and the stuff to make sure you’re important in the organization,” he told HR professionals at the world’s largest HR conference. And while he was somewhat heartened to see the number of hands raised when he asked how many in the audience were valued by their CEO as much as the chief financial officer, the numbers are still too low, he believes.

“Damn it, it’s not enough. We’ve got to fix that,” Welch said in an interview-style format with Claire Shipman, senior national correspondent for ABC News’ “Good Morning America.” Questions for Welch included those from SHRM members sent via Twitter and conference video.

For HR professionals to be taken seriously by other CEOs and senior leaders, they have to deliver, he said.

“Get out of the picnics/birthdays/insurance form business,” and instead take action that makes a difference, he said to loud applause. “Nobody wants to see some crazy cheerleader in there while [the organization’s] leaking.”

The recession dominated Welch’s remarks.

“The one thing you have to do in a time like this [is] to communicate like hell … so your people know every move that’s going on” and understand the actions the organization is taking, “because everyone is scared.”

That includes measuring employee performance so employees know where they stand, he said, and he reiterated a point he made in the June 2009 issue of HR Magazine, in which he noted that HR is “responsible in many ways for ensuring that managers are candidly appraising people,” and called for applying the same seriousness to the performance management system as an organization would apply to complying with the Sarbanes-Oxley Act.

“You don’t go in and just slash [positions] and they don’t know why. HR defines a company in bad times,” he said.

HR professionals can help their organizations “get out of the small-term crisis box,” he said, by rewarding the right behavior.

“You get the behavior you measure and reward, so if you reward short-term … don’t be surprised if you don’t get long-term thinking,” he said. Organizations that reward sales volume, for example, shouldn’t be surprised when their profits don’t match their sales volume—they get what they reward.

He also emphasized the importance of communication in helping to build trust—of HR and the organization. The recession is leaving a bad taste in the mouths of employees working in corporate America, he said, and he urged HR professionals to make their companies more informal by stripping away bureaucracy if they want to keep star performers from leaving once the recession ends.

Welch urged HR “to come to work every day having a voice. Create an atmosphere in your place where you press all the time for workplace dignity and voice.”

Welch is the head of Jack Welch LLC, where he serves as a Special Partner with private equity firm Clayton, Dubilier & Rice. He also is a consultant to IAC (Interactive Corp.); teaches a leadership course at MIT’s Sloan School of Management; and co-writes the weekly BusinessWeek magazine column “The Welch Way” with his wife, Suzy.

He is an author of international best-selling business books. Winning: The Answers (HarperCollins, 2006), which he and his wife co-wrote, is a follow-up to Winning (HarperCollins, 2005).

His autobiography, Jack: Straight from the Gut (Grand Central Publishing, 2001) was an international and Wall Street Journal and New York Times best-seller. He donated the net proceeds from his $4 million book advance for his autobiography to the Connecticut-based John F. Welch Jr. Foundation Inc., which focuses on higher education, hospitals, children and youth.

Welch closed his appearance by exhorting attendees to “stand up—get voice.

“Please don’t be a victim,” he urged HR. “You [have] the most important jobs in America.”

Kathy Gurchiek is associate editor of HR News.

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