Jack Welch

I met Jack Welch and his wife Suzy today. He was here in Austin at a signing for his latest book, Winning. He did a 30 minute Q&A and then signed books. It was awesome to hear him speak and, as always, he was very candid. I have yet to read the book, but it looks pretty good. He wrote in my copy "Good luck with b-school." I had a quick chat with Suzy about Columbia and New York. They were both very friendly.

Welch made some really good points. People asked about executive compensation, corporate governance, differences between male and female managers, how to retain key talent during periods of stagnation, and how to approach VCs. He also took some time to talk about his slightly controversial 20/70/10 rule. Essentially, keep the top 20% of your people happy and work hard to grow them. Make sure the 70%'ers know exactly where they stand with you and how they can move into the top 20%. Tell the bottom 10% that they should find careers elsewhere. Don't fire them outright. Give them a chance to find something else. This might seem viciously Darwinian, but his point was that you do no one a favor by not telling them where they stand and then letting them go when times get tough. When they ask why they were let go and you tell them something like, "Well, you weren't performing all that well for the last X many years", you've done them a huge disservice. You've fired them when times are bad and they had no idea they were underperforming. Good point.

Tomorrow, I'm packing for me trip and then I'm off!