Jack Welch and the 4 E's of Leadership

How to Put GE's Leadership Formula to Work in Your Organization

by Jeffrey A. Krames

Number of pages: 172

Publisher: McGraw-Hill Education

BBB Library: Leadership, Corporate Success

ISBN: 9780071457804

About the Author

Jeffrey A. Krames is the author of The Jack Welch Lexicon of Leadership,What th Best CEOs Know, and The Welch Way. All of his business books have been named "Best Leadership Books of the Year" by Library Journal. Krames is a frequent guest on CNN, CNBC, and Fox News Channel. His work has appeared in the New York Times, the Wall Street Journal, and the Los Angeles Times.


Editorial Review

In his 20-plus years at General Electric, Welch transformed a mature manufacturing company into an outstanding products-and-services juggernaut. He increased the value of the company more than 30 times over. He achieved all of this by defying some of GE's most venerated traditions (for example, by making hundreds of acquisitions), by making the tough calls (he laid off more than 100,000 workers), and by transforming GE's insular, hidebound culture (he fired the strategic planners and made sure that managers listened to workers). But most of all, Welch selected and developed leaders (During his tenure, GE turned out more Fortune 500 CEOs than any other company in history). He once said, famously, that the smartest people in the world hire the smartest people in the world, but the truth is that he looked for far more than smarts. The discipline of the 4E's helped him find and develop leaders who would fit into GE's high-octane, performance-based culture. Those who have scored high on all four E categories were the ones who ultimately helped him fulfill his goal of building the world's most competitive organization.

Book Reviews

"The 4 E model is gaining fame in the business press. This book not only gives you a good primer in those characteristics but provides excellent case studies of how this model can be exported to other companies, in other industries."The CEO Refresher

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Wisdom to Share

A manager who is perceived as lacking in integrity may possess all the energy in the world. But he or she most likely won't have the respect of his or her colleagues or the moral compass with which to lead.

Any leadership model must include passion. The best leaders are those who are filled with a fire-in-the-belly enthusiasm for what they do.

It all begins with energy. Leaders must have other strengths, such as intelligence and decision-making ability, but it is energy that converts good ideas into measurable performance.

In fact, charisma (which we'll define here as the quality of personal magnetism) has little to do with effective leadership.

Having passion, says Welch "doesn't mean loud or flamboyant. It is something that comes from deep inside."

Although the well- springs of passion are internal, the workplace in which one finds oneself can be either supportive or destructive of passion. The best organizations, Welch argues, spark and nurture a person's passion.

What kind of company nurtures passion? A company that encourages frank dialogue and communications and-conversely-rejects autocratic behavior, turf wars and other behaviors that impede effective communications.

The 4E Leader spreads confidence like gardeners spread fertilizer. That's why, according to Welch, the most important thing a leader does is to instill confidence in the organization.

Leadership is the ability to articulate a vision and the ability to get others to act on that vision.

Energizers aren't necessarily the source of ideas; more likely, they encourage others to voice their ideas. They know that few things get people more excited than having one of their ideas lead to an important "win" for the organization.

When people are not able to contribute their brainpower to the organization, they feel increasingly isolated and not in control of their own destinies. When that happens, most people get into a "reactive" mode, feeling more like victims than like contributors.

To Welch, business is about winning, winning in the marketplace, winning customers, winning new business, winning for shareholders.

Passion cannot be taught or learned. The best way to build a passionate team is to hire people who share your excitement for the job at hand.

When interviewing candidates, ask them questions that help you determine their values, priorities and so on. You're looking for that rare mix: people who want to feel passionate about their jobs but are also willing to subjugate their personal goals and rewards for the good of the organization.

Too many layers and too much bureaucracy can stifle productivity and muck up the works.

This is a paradox of business: You have to shrink in order to grow; you have to give things up in order to gain things.

"Paradox is a way of life. You must function collectively as one company and individually as many businesses at the same time. For us, leadership means leading while being led, producing more output with less input."

Energizers know that the key to motivating is not to micromanage, but to outline a few general goals and let people run with them.

Make sure that there is a platform through which people can contribute new ideas (e.g., Work-Out), and then celebrate the ideas by spreading them throughout the company. Make sure that the best ideas are surfaced, and give credit to those who come up with them.

One of the leadership keys was to master the job you have before focusing on future promotions: "It's great to think about the future, but it's a whole lot better to think about the future when you're hitting the ball out of the park on your current job. Do the job you are on better than anyone has ever done it.

Ambition was not to spend time charting your course up the ladder or playing politics; it was to do your job better than anyone had ever done it before you think about that next job or promotion.

Ownership implies taking responsibility for one's own fate. It is up to each individual to hone and develop his or her skills. Hold yourself accountable, Welch advised, for that is where responsibility lies.

Don't complain about how overworked you are or about how no one appreciates you. Complaining never won anyone a promotion or recognition.

Welch believed strongly that he had to create a learning organization. But he also believed that his people had to be open to learning and had to continuously improve and develop themselves. Welch urged managers to accumulate knowledge and new ideas rather than titles or promotions.

Welch urged managers to "play offense" with their careers. Don't sit back and wait for things to happen; make them happen.

Strong leaders lead with character/integrity. The best leaders are the most trustworthy.

Strong leaders have business competence/acumen. They have an instinct for business -a "gut" that guides them well.

Strong leaders think global. Welch's first companywide initiative was globalization, and he wanted all leaders to have a global mind-set.

Strong leaders are customer-centric. They understand Drucker's doctrine: Only a customer can define the purpose of a business.

Strong leaders welcome change and disdain bureaucracy. A manager once asked Welch what he should say when his people asked him when the changes would be over. Tell them the truth, Welch answered: "Change is never over."

Good leaders are strong communicators, and They Are Empathetic. Authentic leaders not only know how to talk but also know how to listen. They are empathetic (have "heart") and do not bark out orders at subordinates.

Authentic leaders build effective teams. The best leaders know that in order to meet or exceed their goals, they need the help of the best.

Best leaders focus on achieving the objectives of the organization. Individual contributions are meaningful only when they help the organization achieve its goals.

Best leaders have great energy and spark others to perform. The best leaders articulate a vision and get others to carry it out.

Strong leaders have "infectious enthusiasm". This serves as a "force multiplier" as the organization capabilities increase.

Best leaders love what they do. They get up each day ready to attack the job at hand. To them, work is not work; it's what they love.

Great leaders achieve and deliver. They meet or exceed financial goals and other key objectives.