Jack: Straight from the Gut
by Jack Welch with John A. Byrne
Warner. 479 pp. $29.95
As I write, Jack Welch’s autobiography sits in the No. 4 slot on the New York Times best-seller list, where it has been for three-and-a-half months. Its popularity has astounded many people who thought Warner Books was out of its mind in launching this venture with a $7.1-million author’s advance.
Why would literate Americans give a damn about a character whose life was spent rising to the top at General Electric, and then staying there for twenty years? Welch was a strikingly successful chief executive officer, but he was not a “business celebrity” in the Donald Trump or Lee Iacocca mode. And GE, which makes everything from dishwashers to mortgage loans to jet engines, is not exactly a sexy company. Furthermore, the book is not well-written. Sentences do not parse, participles dangle, and the team of Jack Welch and John A. Byrne (a Business Week writer) has a collective tin ear, evidenced conspicuously in their repeated insistence on the importance of “boundaryless” management.
But despite all of this, the book is enormously readable and illuminating. If you have any interest in what CEO’s of large corporations think about and do all day long, Jack: Straight from the Gut is probably your best current bet.
To be sure, you would have a fair number of choices. Memoirs by CEO’s have multiplied in recent decades. One reason is that such people are often in a position to pledge large corporate sales for any book they write. Another is that big egos are overrepresented among those who get to the top, and they are easily persuaded that the world needs to hear their stories. When the CEO himself owns both a big ego and a big publishing company, there is presumably less need for persuasion: a current case in point is Sumner Redstone, the CEO of Viacom, which owns Simon & Schuster, which is now, enthusiastically or otherwise, publishing the boss’s ego-saturated A Passion to Win.
Many CEO’s are quite clueless about how to write a book, but this is not an insuperable problem since ghostwriters abound. Only one well-received CEO memoir in recent years seems to have been ghost-free. It was also the only female entry: the late Katharine Graham’s Personal History, published in 1997 and notably without ego. One of its major recurring themes was Mrs. Graham’s massive, incurable insecurity even as she firmly took control of the Washington Post Company and dominated Washington high society.
Despite their typical deficiencies, CEO memoirs do have their place. The chief executive officer of any large American company is likely to have a tale worth telling. At the heart of the job are assorted high-level strategic decisions about whether to merge with or acquire other companies, how to position one’s company in different markets, what works in building a firm’s reputation—decisions that are designed, of course, to augment the company’s earning power but are typically made in the absence of perfect information and often carry substantial risk of losses.
Not only as decision-makers but as human beings, bosses figure to be interesting. Having met maybe 200 CEO’s during several decades in business journalism, I can testify that they are mostly very smart (except when talking about politics) and not necessarily lovable. You do not rise in corporate bureaucracies unless you have the reasoning and verbal skills necessary to prevail in arguments among small groups. It also helps if, on your way up, your executive decisions have not led to screw-ups.
Most successful CEO memoirs try to combine the strategic and the personal dimensions, and this one is no exception. Jack Welch grew up in Salem, Massachusetts in a Catholic family that seems to have been lower-middle-class. His father was a lifelong railroad conductor; he credits his mother with pushing him into serious success-striving.
A so-so student, Welch ended up getting a Ph.D. in chemical engineering at the University of Illinois at Champaign. His doctoral thesis, not foreshadowing fame and best-sellerdom, was about condensation in steam-supply systems, but the Ph.D. got him two job offers, one from Exxon and one from General Electric. The GE offer was from Pittsfield, Massachusetts, closer to home, which seems to be why he accepted it.
Welch went to work at GE in 1960, at age twenty-five, and was nominated to be CEO in 1979. In Big Businessland, this counts as a fairly fast incubation period, and forty-four was fairly young to be running one of the country’s largest enterprises. The impression one gets here of the younger Welch is that he must have been sociable and great fun to be around—assuming you had his respect—yet also something of a human blowtorch: tough, sure of himself to the point of arrogance, quick to fire incompetents, boundlessly ambitious, and, it seems, contemptuous of GE bureaucracy from the beginning.
In his second year at the company, Welch got a $1,000 raise, to $11,500. This seemed fine to him until he discovered that the salaries of all the fellow-engineers in his group had been raised by the same amount. Welch protested that he was better than they, and brashly told his boss he was quitting. But a senior executive intervened, took Jack and his wife to dinner, and talked him into staying. Somebody, obviously, had already spotted a comer.
Several years later, and several layers higher, the same senior executive had a high-level vacancy in a sizable department that was charged with developing a new kind of plastic. After a group dinner at a local restaurant, Welch followed the executive to his car, planted himself in the front seat, and spent more than an hour demanding the job. Despite resistance, based on Welch’s inexperience in marketing, he got it. Years later, when the issue was who would succeed Reginald Jones as GE’s CEO, Welch was equally unbashful in promoting himself, and equally successful.
Jack devotes a chapter to each of Welch’s principal preoccupations as corporate chieftain. One of them is golf, manifestly a major source of fun in his life and a game at which he claims to have attained a certain expertise. More substantive chapters retell the story of GE’s acquisition of RCA (rated a huge success) and Kidder Peabody (an acknowledged disaster), the rise of GE Capital (the company’s exceedingly profitable in-house venture-capital operation), the so-called Six Sigma program (designed to eliminate virtually all product defects), and Welch’s A-B-C conception of personnel development. (This divides a workforce into stars, destined for promotion; the indispensable 70 percent in the middle; and failures needing to be kicked out.) Near the memoir’s end, there is a chapter on the succession to Welch himself, who retired last September. The process, which ended with the selection of Jeff Immelt, began with Welch debriefing each of the eleven major internal CEO’s running GE businesses—yet another reminder of the breadth and scope of the operation he headed.
A great success in conveying the range of problems confronted by a CEO, this memoir is less successful as a management manual. Like just about every boss yearning to explain how he did it, Welch feels obliged to deliver deep insights into human behavior—but, as almost always seems to happen in this genre, they are unpersuasive. In the book’s opening sentences, he worshipfully recounts how his mother screamed at him and called him a “punk” when he behaved badly after his high-school team lost a hockey game. The story is meant to illuminate his own “leadership style” at General Electric. But not many pages later, we find him telling us: “When people make mistakes, the last thing they need is discipline. It’s time for encouragement and confidence-building.” The maxims scattered through the book can be safely ignored.
In some ways, Jack: Straight From the Gut is also not really straight from the gut. His efforts at GE, Welch tells us, were designed to create a meritocracy. This raises questions about where he stands on the racial preferences that have become ubiquitous in large corners of corporate life. But he has little to say on the subject, and what he does come up with is a near-parody of corporate boasting about “diversity” (e.g., “the number of diverse vice presidents was up to 25 percent”).
Still, on balance and despite its manifold flaws, Jack has to be rated one of the best CEO memoirs, just as its (primary) author has to be rated one of the great CEO’s. On the scorecard that matters most—the pitiless judgment of the stock market—Welch’s record is astonishing. Shareholders in GE earned an average annual return of 23 percent during his years at the helm (versus 13 percent for the Dow Jones industrials). Those shareholders—and there are a great many of them—are no doubt helping to keep Jack on the best-seller lists.