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GREAT COMMUNICATION SECRETS OF GREAT LEADERS
showed time and again, it is essential to ensuring buy-in and uniting people
for a common cause.
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Welch has said that a CEO’s greatest failing is “being the last to know.” A
leader who never hears bad news is hopelessly out of touch. Welch made a
point of surrounding himself with people whom he referred to as “business
soul mates.” These were individuals who could be counted on to give him the
straight scoop on the issues. Another way Welch stayed tuned to the organiza-
tion was by asking questions, sometimes for hours on end, until he learned
what he needed to know. 8
POWER IN PEOPLE
Development of others is essential to Welch’s success as CEO. Welch was an
active and vigorous participant in what GE calls its Corporate Executive
Council, which meets quarterly. Strategy and succession are principal themes
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of these meetings. At the 2 ⁄2-day sessions, senior leaders meet to “share best
practices, assess the external business environment, and identify the com-
pany’s most promising opportunities and most pressing problems.”
Apart from getting perspective on the business, Welch used these sessions
to coach and observe managers interacting with one another. 9
During another set of meetings, known as Session C, Welch worked with
senior line managers and human resource leaders to assess managerial talent.
“Candor” and “execution” were the buzzwords. When Session C concluded,
Welch followed up with his handwritten assessment. In keeping with Welch’s
claim of backing words with action, it is GE’s policy to link all management
development to strategic business goals. Meritocracy is what GE strives to
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create, and this is the thing of which Welch claims to be most proud. It is no
surprise, then, that many people refer to GE as the boot camp for managers, or
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“CEO University.” The ranks of American corporations are filled with GE
grads, including Larry Bossidy (Allied-Signal and later Honeywell), Robert
Nardelli (Home Depot), David Cote (TRW), and Jim McNerney (3M).
Some of the luster of Welch’s legacy was tarnished when the perquisites
that he continued to receive from GE after his retirement were revealed during
divorce proceedings from his second wife. The amenities included a rent-free
apartment in Manhattan, use of the corporate jet, and private security for over-
seas travel. The cost of these perquisites, according to Welch, amounted to less
than the lump sum that GE’s board had originally offered as part of his 1996
contract extension negotiations. 12
Welch, never one to flinch from a challenge, responded with an op-ed
piece in the Wall Street Journal in which he defended his compensation as
well as his legacy. But not wishing to reflect negatively on the company for
which he had worked so long and so hard, Welch agreed to give up his perks
package and reimburse GE for expenses that had been previously covered,