Jack Welch: 'HR, Get Out of the Picnic Business'

"How many out there (of perhaps 6,000 HR managers in the audience) are perceived by your organizations as equal in importance to the CFO?" Jack Welch asked.  About 10 percent believed they were. “That’s not enough,” he said. 

Welch, former head of GE and a great supporter of HR, offered his tips for HR managers at the recent Society for Human Resource Management (SHRM) Conference and Exposition in New Orleans.

If I Owned a Football Team

Welch said that if you owned a football team, you wouldn’t hang around with the accountant. You'd hang around with the manager of player personnel. That's where the action is. And that's how it should be for HR managers everywhere.

How do you make your case? "Get out of the picnic and insurance forms business," Welch said.

Honesty in Evaluation

No employee should wonder where he or she stands. When we have layoffs, all the affected personnel are saying, “Why me?” That means there haven’t been good evaluations, Welch says.

Isn't the 20-70-10 System Barbaric?

Welch spoke about his famous (or infamous) 20-70-10 system that he installed at GE.  (Briefly, under the system, 20 percent are rated as exceptional, 70 percent as fine, and the bottom 10 percent are eliminated.) Don’t get the wrong idea about the 10 percent, he says. "The idea wasn’t to machine-gun them—we worked with them, found a better situation for them, or helped them move on. Many of them had very successful careers."

"The number one thing to do to prove your value is to develop rigorous development and evaluation plans," Welch said.

 “I don’t want to work for the man.”

The shock of the downturn has many employees thinking, "I don’t like this." Your stars might stay a while, but when things get better, they’re going to want out—a chance to control their own destinies—unless they work for a company that offers flexibility, growth, and excitement.

Challenge your organization to create that kind of atmosphere—"Grab them by the shirts." In today’s market, you have to get creative taking care of the best and raising the average. "Make it better every day," Welch said. Do not be a victim, a player who doesn’t suit up for the game.

Communicate like Hell

Everybody is scared these days, said Welch. Are you feeling excitement, thinking about new ways of doing things, and how to restructure to come out thriving? Or are you hunkering down scared? "You have to make it vibrate—feel the excitement of tomorrow not the pain of today."

No whining, said Welch. And no over-positive cheerleading either. "People don’t want cheerleaders when the thing is leaking," he added.

Walk the floor, tweet, do what you can to communicate, so employees think, “They’re working for me."

Long-Term and Short-Term Management

"First of all," said Welch, "recognize that any jackass can manage for the short term—you just squeeze the hell out of it." And any jackass can manage for the long term—you just share your dream. But you have to do both, and that is hard.

Welch on HR: "HR is important in good times; it defines bad times."