Jack Welch's advice to MIT Sloan students: “Always err on the side of bold.”

Former GE Chairman and CEO speaks to students on the critical requirements of smart leadership

- Watch the video of Jack Welch's talk

When Jack Welch blew up a plastics plant he was working at as a 25-year-old engineer, even he little realized that the crisis would be instrumental in turning him into one of the most successful leaders of modern day commerce. The story might have ended less Hollywood had he not been forced to answer to a boss who left him feeling buoyed with confidence and impressed with the power of good leadership.

Jack Welch speaking to MIT Sloan students Photo: Jack Welch speaks to an overflowing crowd of MIT Sloan students in Wong Auditorium.

Welch shared this and other leadership tales — both cautionary and inspirational — with an overflowing audience at MIT Sloan's Wong Auditorium on Tuesday, April 12. The lecture was part of the Dean's Innovative Leader Series, and Welch, in trademark style, did not mince words when he talked about the critical requirements of smart leadership.

“If you run a company like GE, you don't know much in the way of details about the businesses ... what you do know about are the people you're dealing with. In the CEO's world,” he told them, “it's the people you need to focus on. The CEO of GE puts the right people in the right jobs, gives them the resources they make a case for, and gets out of their way.”

A leader's role, Welch said, is to impart vision and a healthy corporate culture, build great people and great teams, and show them how to lead. A leader's job he said again and again, is not to be “the smartest person in town,” but to hire and inspire the smartest people in town. In other positions, he said, this may not be the case, but it is the essence of leadership.

Get in the arena

MIT Sloan Dean Richard Schmalensee and honorary MIT Chairman Alex D'Arbeloff moderated the lively hour-long discussion, posing questions to Welch and fielding queries from the audience. At one point, Schmalensee asked Welch what advice he had specifically for MIT students.

Building skills, Welch replied, is key to building confidence, which, in turn, is absolutely essential to leadership. “As one of the greatest schools in the world, MIT Sloan gives you self-confidence — after all, you got here in the first place!”

But Welch emphasized that building certain intangibles was at least as important as building skills.

“What gets you beyond the smartest people in the classroom? Your job as a leader is to excite people. How much energy do you have and how do you energize others? How much edge do you have, and can you say ‘yes’ and ‘no’? Or are you one of those people who always needs more data? A ‘maybe’ person?”

And Welch made it perfectly clear how he felt about “maybe people” before he went on. “Can you execute? Can you deliver? How much do you care? Do you care about your people? Do you care about winning?”

Jack Welch signing copies of his book Photo: After speaking to students, Welch signs copies of his new book, Winning.

Welch also dispelled a few myths about the executive suite. While being christened CEO was once akin to a “coronation,” he said, being CEO today “is not yours for life. You always have to prove yourself.” One of his strategies for keeping the top office was “managing short and thinking long,” which he called “one of the paradoxes of leadership.” Anybody can manage short or long, he said, but a good leader had to be able to balance both.

In answer to a question from the audience about whether a young corporate manager should be cautious or bold, he used his own early career as an example. “Always err on the side of bold. Take the risk, take swings, get in the arena and enjoy it. I blew up a factory and pleaded my case and survived. Have fun. Why be a cautious grunt? Go for it.”

Later he scanned the students in the room and shook his head confidently, “The people in this room will go out and do something that will change the shape of the game.”