Jack Welch on Autonomy

Jack Welch, like Warren Buffet, is an extremely well respected and well known American business leader. He helped make GE huge (he increased its market capitalization by about $400 billion over about 20 years). I saw this Jack Welch quote the other day and really liked it:

“If you pick the right people and give them the opportunity to spread their wings and put compensation as a carrier behind it, you almost don’t have to manage them. – Jack Welch”

welchWarren Buffet understands the importance of valuing your company’s reputation. Jack Welch obviously understands the importance of giving people autonomy and rewarding them for good work.

GE is an interesting business. It functions more like a holding company with a brand than as a centralized, traditional company. The company is known for its divisions that sell everything from trains to jet engines to dishwashers. In an organization that large and diverse, you have to give your people autonomy or they won’t be able to do their jobs well. It is impossible to manage and keep track of everything that goes on across the entire company.

In customer service, if you pick the right people and give them the opportunity to succeed, it can work out very well. Motivation and encouragement (either by recognition and/or money) can be really helpful. If those people are motivated to and rewarded for doing well, they will continue to do well. They may even encourage their friends to look into jobs at the company.

The important thing that Welch really understands is the importance of letting people grow into their positions and then rewarding them for doing well. That is a pretty simple formula that can work in almost every position in every company. There obviously have to be some limits, but if well executed, the formula can be extremely successful.

For more on this subject, see this post about public praise and public shame. What do you think of Welch’s view?