Long before Tesla’s (NASDAQ:TSLA) Elon Musk and Amazon’s (NASDAQ:AMZN) Jeff Bezos gained celebrity status as the heads of their respective companies, there was an individual who epitomized corporate leadership and paved the way for Musk, Bezos and others to follow. Jack Welch, who served as the chairman and chief executive of General Electric (NYSE:GE) from 1981 to 2001, personified leadership during a time when GE was among the world’s most valuable companies.
Mr. Welch recently passed away at 84 years of age, and I believe that his leadership principles — four of which I would like to highlight as particularly timely and relevant — have influenced the CEOs of today and should continue to guide them both professionally and personally.
And even if you’re not a CEO, there’s still plenty of food for thought here as Jack Welch’s guiding principles (many of which are delineated in his classic book, Winning) can enlighten and inspire anyone who wishes to be a better, more effective leader.
Jack Welch Leadership Principles: Build a Meritocracy
In his book Winning, Jack Welch revealed that he wished to be remembered “as a huge advocate of candor and meritocracy, and believing everyone deserves a chance.” He will most certainly be remembered for these traits as Welch handpicked a wide variety of individuals for key roles at General Electric during his 20 years as chief executive.
Making your organization a meritocracy means choosing whoever is the most qualified for the position — not necessarily your cousin or a golf buddy. The leaders of today would be well advised to follow Welch’s lead and give everyone a chance to prove themselves through hard work and dedication.
Don’t Try to Please Everyone
In a time when political correctness and people pleasing are highly valued, few CEOs will dare to make unpopular decisions. Yet, they should take a page from Jack Welch’s book as his willingness to listen to his gut — even when his colleagues disagreed with him — made him a leader par excellence.
As he explained in Winning:
“[T]ough calls spawn complaints and resistance. Your job is to listen and explain yourself clearly but move forward. Do not dwell or cajole.”
Irrespective of your position or field of endeavor, there will be times when you must choose to do what’s right, not what’s popular. And if you’re a true leader, you’ll withstand the resistance and come out on the other side.
Ask Questions Fearlessly
A great leader has a curious mind and understands that there’s always someone who knows more than you do, particularly in specialized fields of knowledge. Even as the CEO of a huge and famous company, Jack Welch always remained humble and inquisitive.
In Winning, Welch wrote:
“When you’re a leader, your job is to have all the questions. You have to be incredibly comfortable looking like the dumbest person in the room. Every conversation you have about a decision, a proposal, or a piece of market information has to be filled with you saying, ‘What if?’ and ‘Why not?’ and ‘How come?'”
To be a leader, sometimes you’ll have to be the “dumbest person in the room” and be perfectly okay with that, since that’s how we learn and grow in business and in life.
Celebrate Small Victories
Positive reinforcement is more than just a principle of behavioral psychology — it’s a habit that should be integrated into the corporate culture. Jack Welch appreciated the value of praising and celebrating not only the big victories, but also the smaller ones along the way. After all, it’s the attainment of the little goals that pave the way for the big wins.
In other words, the small wins are a big deal and ought to be treated as such. Welch observed in Winning that “celebrating makes people feel like winners and creates an atmosphere of recognition and positive energy,” so use positivity and celebration frequently as a morale booster. Soon enough, as the results improve, you’ll have plenty to celebrate.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets. As of this writing, he did not hold a position in any of the aforementioned securities.