Leadership
By Greg Phillips

The story of GE’s transformation under the leadership of Jack Welch is legendary. It might be useful therefore to review a few points from the past about Jack Welch’s Leadership and see how they apply today.

Back in 1989 an article published in ‘Harvard Business Review’ reported:

‘Welch is leading a transformation of attitudes at GE – struggling, in his words, to release “emotional energy” at all levels of the organisation and encourage creativity and feelings of ownership and self-worth. His ultimate goal is to create an enterprise that can tap the benefits of global scale without the stifling costs of bureaucratic controls and hierarchical authority and without a managerial focus on personal power and self perpetuation. This requires a transformation not only of systems and procedures, he argues, but also of people themselves.’

In the interview that preceded this article by Noel Tichy and Ram Charan, Jack Welch was asked, “What makes an effective organisation?” He answered, “For a large organisation to be effective, it must be simple. For a large organisation to be simple, its people must have self-confidence and intellectual self-assurance. Insecure managers create complexity.”

He stated, “We have the best training and development resources and an environment committed to providing opportunities for personal and professional growth.”

What are your thoughts on how Jack Welch’s leadership principles apply to today’s business environment? I suggest that they have always been right - long before Jack Welch’s time and will remain so long after, in fact they will always be right. True leaders know themselves including strengths and weaknesses. They innovate, inspire, empower others, lead by example and create a positive culture.

Managers and leaders are not the same. Managers often:

• Rely on control
• Lack vision
• Accept the status quo
• Lack the ability to create culture
• Have short-range views
• Rely on monitoring, controlling and administering

I’m not suggesting that businesses don’t need managers. Some businesses need managers for controlling certain systems or aspects of the business. Leadership however is required if people are to be led to act, be creative and innovative. True leaders maximise the use of their subordinate’s abilities and talents.

Let’s travel back in time again to an article, ‘Curse of Mediocre Managers’ written by Mark Rhen and published in The Australian on 13 June 1992:

‘The biggest handicap for most organisations in Australia today is that their own managers are unconsciously inhibiting the true potential of their workforces to perform. In the context of the modern “best practice” approach to management, our poorly trained managers remain blissfully unaware that they are the main reason why Australian industry in general is languishing at the back of the international pack and still falling further behind. The problem is worsened by the fact that our training institutions even today still haven’t introduced the basics of the required new approach to undergraduate and postgraduate courses. To put it bluntly, our managers must learn a new way of managing, one that is vastly different from the way most of us have been taught and have practised “successfully” for decades past. Our biggest competitive threats come not from Japan or other competitors, but from within the bowels of our own organisations. They are self-inflicted, by our own inept management styles.’

This might sound a little harsh to some however Mark supports his claims with various data and research throughout the article. He closes with:

‘The journey to pursue continuous improvement in all facets of the business is, of course, never-ending. Contrary to widespread belief, the resistance and inertia will not lie with the employees. Rather, the problem lies with the vast majority of our most senior managers who have been educated and trained along traditional lines. Could it be that Australia has to wait for this generation of managers to pass through before the penny drops?’

Frankly, I don’t endorse everything said in the article however it prompted me to examine what has changed in the past eleven years for those organisations to whom Mark Rhen’s article applied. The fact is that some organisations have made tremendous advances in management and developed true leadership however many have not. Some are no longer with us. Perhaps it would be valuable for all organisations to ask themselves “how have we progressed over the past ten years or so, indeed the last three years? Are our key people skilled in the latest approach to leadership development?” All organisations need to have a strategy for leadership development.

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