Straight from the gut I have chosen this book because my director is very impressed with Jack Welch style of management and actually trying to practice his ideas and suggestions. He also encourage his team to read his books and for this purpose provide books freely from his library. I have also read his book “WINNING. !traight from the Gut is written in a casual" flowing style that is part autobiographical and part leadership advice. Welch goes from discussing his family origins" through to his beginnings at G# when he started as an engineer in the $%&'s" and to the implementation of his various leadership philosophies like !i( !igma. )long the way Jack Welch discusses numerous business stories from his time at the top of G#" mentioning both his successes *like his e+business strategy, and his failures *like his purchase of the -idder eabody /ompany,. Jack Welch0s !traight from the Gut is a book that both business leaders and those interested in the General #lectric story will get something from. Welch keeps the reader entertained with interesting business stories" while also sharing many of his business philosophies that have worked for him over the years" which is the trade mark style of Welch".
Chapter 1, Building Self Confidence
Jack begins his story as a senior at !alem High !chool" north of 1oston. His hockey team loses to their rivals for the seventh consecutive time. Jack angrily pitches his stick down the ice and goes into the locker room. 2oments later" his h is mother appears in the locker room and an d scolds Jack" telling him that he has no business playing if he does not know how to lose as well as how to win. !he teaches him the value of competition. Jack0s mother is his primary influence. !he shows him how to lead through toughness" aggressiveness" generosity" and warmth. !he instills management beliefs in Jack that include competing to win and facing reality. !he teaches him diligence" and he learns that people are motivated through reward and discipline.
Chapter 2, Getting Out of the Pile
)fter one year with G#" Jack gets a 3$"''' raise" but so do the other three men he h e shares his office with. Jack believes he deserves more for his e(panded efforts. He is frustrated and resentful at being lumped in with the group. g roup. 4he red carpet treatment Jack e(periences when G# initially woos him 5uickly rolls up after he he is hired. Jack also finds it difficult to ad6ust to the company 0s penny+wise behavior. He en6oys traveling to the 789 lab to sell his pro6ects and ideas to the plastics *:, inventors" but they
are funded completely by corporate" and trying to get them e(cited about any innovation is difficult. 4hese scientists like research" not commerciali;ation or business.
Chapter 3, Blowing the Roof Off
4hree years into his G# career" Jack blows up one of the factories. 4he incident is terrifying" but Jack0s $''+mile drive to e(plain it to /harlie 7eed" a corporate group e(ecutive and Gutoff0s boss" is worse. 4o Jack0s surprise" 7eed is more concerned that no one is hurt and that product problems are learned now" rather than later. How 7eed handles the incident makes a lasting impression on Jack. 7eed asks only three 5uestions about the incident< =What have you learned from the e(plosion>= =/an you fi( the reactor process>= and =!hould we continue the pro6ect>= He tells Jack" =When people make mistakes" the last thing they need is discipline.= Chapter 4, Fling Below the Radar
Jack has a great career and an d family as he enters a transition phase. It begins with the passing of his mother and then his father shortly thereafter. He also moves from being =9r. Welch"= the engineer" to =2r. Welch"= the businessman. Jack becomes less humble and more of a braggart" feels he inherited gold when he h e got the entire plastics operations" and" as he says" =... was so completely full of myself.= His only redemption is that he remains insulated from the G# bureaucracy and flies far enough under the radar to still operate as he chooses to do. lastics grows fast in the $%?'s. Jack adds marketing people and hires celebrities for 4@ ads and radio spots in prime time.
Chapter !, Getting Clo"er to the Big #eague"
)t A&" Jack is a G# vice president. 1y June $%?A Jack is promoted to head of strategic planning for the entire company. He still remains responsible for the chemical and metallurgical division. )s group e(ecutive" Jack adds more diverse portfolio and global operations. Jack becomes highly visible to the corporation and is very much on the radar screen. He is e(pected to move to New Bork corporate head5uarters. In typical Jack Welch fashion" he convinces Herm Weiss to allow him to remain in ittsfield. He rationali;es that he has built solid relationships during his more than $A years there" and that his new position will re5uire him to be in the field with businesses most of the time.
Chapter $, Swimming in a Bigger Pond
2oving up means moving to Cairfield. Jack0s move is a big promotion to a newly created layer of management. Jack is one of five sector e(ecutives and two corporate co rporate staffers publicly identified as candidates for 7eg Jones0s 6ob. #ach candidate is put in charge of a group of businesses to see who is best at managing multibillion+dollar multibillion+dollar portfolios. Jack is responsible for the consumer products and services sector. Dnfortunately for him" h im" his boss" @ice /hairman
Walter =9ave= 9ance" favors another candidate. Jack proceeds on his own because of a lack of support from 9ance and creates his team. 7egardless of the process" Jack knows what he wants" and" he says" it won0t take long to find out whether he is going to get it.
Chapter %, &ealing with Realit and 'Superficial Congenialit'
Jack finally has the 6ob. :utside" he is cocky" self+assured" decisive" 5uick" and tough. tough . Inside" he is not as self+confident as he appears. He reali;es he does not have many of the e(ternal /#: skills necessary to deal with government and the media. :ver the years" government has become more involved in business" but Jack rarely deals with anyone from Washington" 9/" and his only media e(perience has been his introduction by 7eg Jones at the scripted press conference. 4he only thing Jack is sure of" is what he wants G# to be. He wants to change the image from strong and steady" to fast" agile" and 5uickly adaptable to e(ternal changes. change s. His vision is spontaneity and creativity.
Chapter (, )he *eutron +ear"
2any do not understand Jack0s philosophy to downsi;e on one hand" while spending millions to build fitness and conference centers on the other. He must e(plain his investments. Jack contends the critics0 focus is not on the invisible 3$E billion spent on new plants and e5uipment" but rather on the 3?F million spent on furthering his =soft value of e(cellence.= Jack believes that if he preaches the need for e(cellence in everything" his actions must demonstrate that. Cor instance" Jack believes the gym is an informal place where all shapes" layers" si;es" and foundations of the organi;ation can congregate and e(change thoughts and ideas. )ccording to the media" however" Jack becomes =Neutron Jack the guy who removes the people but leaves the buildings= intact.
Chapter 1, )he RC- &eal
4he Japanese threat results in a business+altering deal for G#. )t the time" G#0s 3&.A+billion purchase of 7/) is the largest non+oil deal in history. urchasing 7/) e(pands G#0s own small semiconductor" aerospace division and 4@ set businesses. 4he companies mesh perfectly. 4he deal is announced 9ecember $E" $%F. G# and 7/) are integrated but kept separate from N1/. 1ob Wright" former president of /o( /able" heads N1/. Non+strategic 7/) assets" including records" carpeting" and insurance are sold immediately. )erospace and semiconductor businesses are integrated" too. 4he fourth business is government services and satellite communications. G#0s 4@ manufacturing business is traded to Crance0s government+owned electronics company" 4homson" for their losing medical business. 4homson ac5uires economies econo mies of scale and market position with the 4@ manufacturing business.
Chapter 11, )he People Factor
Jack contends that people are G#0s core competency" and he has been known to hire in unusual ways. ) strong people focus" passion" and an d intensity" define G#0s management. 4o ensure en sure that every employee knows the rules of the game" formal human resource =!ession /= meetings are held at each business location. )pril and November =!ession /= review meetings discuss the organi;ation and people" diversity" and game+changing initiatives. 4hey focus on careers" promotions" vitality curves" strengths and weaknesses" mentoring program results" results" initiatives" and meetings with local unions. Informally" an unspoken personnel review happens every day in hallways" lunchrooms" and meetings. 4he =A&'+degree evaluation= works for several years" revealing =horses+asses and kiss+ups.= 4he system is replaced when people find a way to =game= it.
Chapter 12, Rema.ing Croton/ille to Rema.e G0
Jack0s vision for the /rotonville training facility is to revitali;e it" making it a world+class center where ideas are spread in an open environment without the interference of o f layers of hierarchy. Jack wants programs that connect with managers deep in the organi;ation. In $%$" in the midst of portfolio restructuring and company downsi;ing" Jack asks the 1oard for 3& million to overhaul and e(pand the facility. 4he payback" Jack tells the 1oard" is" infinite. With the 1oard0s approval" /rotonville becomes G#0s most important learning factory. Instead o f using other companies0 case studies in instruction" real G# issues are used. /lass and field leadership development courses such as e(ecutive development" business management and management development for fast+trackers" are central.
Chapter 13, Boundarle"" )a.ing dea" to the Bottom #ine
Jack takes his idea+sharing to the ne(t level" initiating =boundaryless behavior.= His =boundaryless company= has no barriers among company functions such as engineering" manufacturing" marketing" etc. It also makes customers and suppliers part of a single process" eliminates race and gender walls" and puts the team ahead of the ego. 4hose who develop good ideas" as well as those who invent them" are rewarded. eaders are encouraged to share the credit for ideas with their teams. 4he company is also open to the best ideas and practices from other companies. =Cinding a 1etter Way #very 9ay= is the essence of boundaryless behavior and sums up G#0s core values and e(pectation.
Chapter 14, &eep &i/e"
Jack0s final deep dives include his /N1/ cable show. 1y 2ay E''$ Jack0s /N1/ Business show is directly competing with /NN0s ou 9obbs0 9ob bs0 Moneyline show. Jack contends with Center show /NN0s heavy promotions by lengthening his show0s format" spending an additional 3E million to
promote his show and by arranging prime promos during the N1) playoffs over the weekend. 1y 4hursday of the opening week" Jack0s audience is larger than 9obbs0. Jack also wants to do more with noninvasive" non+radiation ultrasound imaging technology. He re6ects an e(pensive ac5uisition to improve G#0s competitive position and instead" turns to internal development" headed by an ultrasound e(pert who0s worked for a ma6or competitor. Within four years *$%%&+E'''," the company goes from ;ero to No.$.
Chapter 1!, )oo Full of "elf
Cresh from the 7/) and #mployers 7einsurance successes" Jack feels invincible. He believes he can make anything work. He decides to ac5uire -idder" eabody" one of Wall !treet0s oldest investment banking firms. ogically" the -idder ac5uisition makes sense" but rather than providing G# access to new distribution without paying the big brokerage house fees" G# finds itself in the middle of a huge public Wall !treet insider trading scandal. 2arty !iegel" a -idder superstar investment banker admits to trading insider stock tips in e(change for suitcases full of cash. )lthough the illegal trading occurs prior to G#0s ac5uisition" ac5u isition" G#" as the new owner is legally responsible to investigate" cooperate with the !#/ and Giuliani" and determine the weakness weak ness of the firm0s control system.
Chapter 1$, G0 Capital )he Growth 0ngine
In $%?" G# /apital earns 3&? 3& ? million on 3F billion in assets. 1y E'''" E '''" G# /apital earns 3F.E billion and more than 3A?' billion in assets. Jack credits the phenomenal growth of the business to incredible amounts of intensity" ingenuity" and entrepreneurship. G# /apital0s double+digit growth occurs in four distinct stages< $%??++$%F" wh en some of the best people are lured to the business the second half of the $%'s" when the business is aggressively grown" making G# /apital an =ac5uisition machine= and in the $%%'s" when deal making and a global financial services business is created and the current global franchise e(pansion brings !i( !igma and digiti;ation to financial services. In the $%?'s" the focus was on consumer lending *mortgages and auto leasing,. Chapter 1%, iing *BC with #ight Bul5"
4he challenge of ac5uiring 7/)" in $%F" is how to keep N1/ going and profitable. )lthough its entertainment unit is strong" it becomes clear that with the onset of cable" N1/ is lagging and an d stuck in the past. eople" again" ag ain" become important in the overall o verall success. N1/ resident Grant 4inker leaves" assuring Jack that with his leadership team in place" N1/ will stay on top. Jack retains the young president of entertainment" but hires his own /#:" 1ob Wright.
/osts must be cut in the news sector. 7ecommended by 4om 1rokaw" 2ike Gartner becomes the N1/ News president. 4he news section recovers its ratings by the $%%'s with talent and successes such as Meet the Press *4im 7ussert," Today *-atie /ouric" 2att auer, and Dateline.
Chapter 16, 7hen to Fight, 7hen to Fold
Jack sees government at its best and at its worst. In $%%$" accusations by #d 7ussell" a disgruntled former general manager in G#0s industrial diamonds business" result in investigations by the 9epartment of Justice" followed by grand 6ury indictments. 7ussell falsely falsely accuses his boss of price+fi(ing with 9e1eers of !outh )frica. 4he C1I and others wanting to make names for themselves by bringing down a big company spend A years and an enormous amount of money chasing nothing. 4he assistant attorney general hires outside lawyers at the government0s e(pense. G# attorneys destroy the government0s conspiracy theory" and the criminal antitrust case is dismissed.
Chapter 1(, Glo5ali8ation
G# has always been a global company. It comprises many smaller companies" which have proven to be the most successful partnerships. G# eventually ac5uires plastics ventures Jack forms in the $%&'s. ) small Japanese distributor" Nagase 8 /o." becomes G#0s new partner after a fter the 2itui etrochemical *Japan, deal. It provides the knowledge of Japan0s comple( distribution market. ocal plastics plants Nagase and G# invest in becoming the heart of o f G#0s )sian plastics business. 4he relationships and deals last more than EF years. G#0s only true global business in the $%'s is plastics. aolo Cresco becomes the =father of G# global activity.= He comes to G# in $%&E and dominates the old international organi;ation. Globali;ation escalates in $%%.
Chapter 2, Growing Ser/ice"
Growing services is all about people. 2ost of G#0s businesses are considered after+market services. 2edical systems is the first business to introduce long+term service contracts. 7edefining markets more broadly in $%%F creates a turning point for services. 4he aircraft engine industry is the first to be reorgani;ed. G# ac5uires a large shop in Wales from 1ritish )irways and a shop in 1ra;il" which reduces the cost of servicing G# engines.
Chapter 21, Si Sigma and Beond
Jack avoids the 5uality movement for years. 1y )pril $%%F" employee surveys indicate 5uality is a main concern. 1ecause of Jack0s recent heart bypass" his colleague" arry 1ossidy" presents !i( !igma at the /#/ meeting. !i( ! i( !igma re5uires fewer than A. defects per million operations in a manufacturing or services environment. Cor G#" !i( !igma0s 5uality increase will potentially
save 3?++3$' billion and increase sales $' to $F percent. ) permanent head of !i( !igma is brought in. Jack gets positive feedback and weighs the elements< employees want it" the team loves it" arry is enthusiastic about it" and the costKbenefits analysis cannot be ignored. 4he program begins January $%%&" changing the company0s culture. =1lack 1elt= pro6ects include improving call centers" increasing factory capacity" and reducing billing errors.
Chapter 22, 09Bu"ine""
G# enters the Internet revolution late" but it already has an established brand" does not re5uire increased advertising" and does not need n eed to build warehouses to ship goods. #+1usiness allows G# to e(pand markets and find new customers. 4he supplier base will become more global. New and younger technologyKInternet+savvy talent is recruited. 4he biggest cost benefits come from using the Internet to streamline internal processes. G# finds a new route to more efficiency. =4he buy"= =the make"= and =the sell= opportunities increase through greater access to more suppliers. aper is reduced" which enhances enhanc es customer services.
Chapter 23, 'Go :ome, r; 7elch'
)lthough Honeywell0s business complements G#0s in various areas" none of their products directly overlap. Honeywell0s high+tech avionics fits well with G#0s aircraft engine industry" putting G# into a market where there is no competition with 7olls or ratt. ) deal with Honeywell is similar to the 7/) deal it e(pands e(isting businesses. It would double G#0s aircraft business and introduce high+tech avionics as the brains of the aircraft. Jack0s plan is to push services aggressively and add !i( !igma and e+1usiness initiatives to Honeywell0s operations. 4he downside for Jack is that he would have to postpone p ostpone his retirement if the deal went through. 4he deal is clean. Jack offers $.'FF shares of G# stock for every single share of Honeywell stock.
Chapter 24, 7hat )hi" C0O )hing " -ll -5out
Jack shares ideas about what has worked. Integrity tops the list. Honesty and single agendas ag endas build better relationships. #5ually important is social responsibility. responsibility. It begins with a strong" competitive company and /#: responsible for ensuring its financial success. Healthy companies provide good and secure 6obs and meet or e(ceed safety and environmental standards. 4he leaders0 intensity determines the organi;ation0s intensity. 4he /#: sets the tone and shares the best ideas and knowledge. eople+fit is important for successful ventures. 4he best strategy strategy cannot work without the right leader developing and owning it.
Getting the right people is more important than strategy development. 1ureaucracy strangles and informality liberates. In large companies" creating an informal" entrepreneurial atmosphere creates a competitive advantage.
Chapter 2!, - Short Reflection on Golf
Golf combines Jack0s love for people and competition. He is a self+taught player" learning the game when he was a young caddy. He muses on games with Warren 1uffet" 1ill Gates" and Crank 7ooney. )t the end of the first hole" Warren made par. 1ill declared" =4he match is over.= 1uffet and Gates made a 3$ bet that the first to make par wins. If neither n either has made par by Hole %" the lowest score wins.
Chapter 2$, '*ew Gu'
icking a successor is Jack0s most difficult task. He begins the process ? years before he is due to retire. He approaches the process differently from the business+centric model used when he was selected. His primary goal is to $, be sure his successor is G#0s un5uestioned leader" E, take the politics and divisiveness out of the process" A, deeply involve the board" so they will be united behind one person" and , pick someone young enough that he or she will be in the position for at least a decade time enough en ough for the /#: to live with his or her decisions and mistakes. 2ost important" Jack wants to take the politics p olitics and divisiveness out of the process.
0pilogue
4wenty years earlier" Jack gave Wall !treet analysts his vision for what he wanted G# to become. 4hen Jack took the bureaucracy and shook it up" creating a world+class organi;ation whose e(cellence is accepted around the world. He is confident that he leaves a true meritocracy" a place full of involved and e(cited people with good values and high integrity. 9uring the first $' years Jack says it is like war" which is the result of changing ahead of the curve. 4here are no modest revolutions or transformations. Jack believes he is too cautious" regardless of what his reputation indicates. Jack leaves a century+old institution embracing change with a passion to learn and share new ideas" which allow diverse businesses to grow faster and perform better.
