Jack Welch’s Hands-On Management
In the mid-1990s, a friend told Jack Welch, General Electric’s CEO, about a new methodology for making a quantum increase in inventory turns in manufacturing operations. It was thought that GE could generate cash if it could increase its inventory turns across the company. The leading practitioner of the methodology was American Standard, whose plants had achieved as high as 40 inventory turns per plant, compared to the average of four at most companies.

Welch wasn’t content to just get the concept, or to send some of his manufacturing people out to investigate it. Instead, he paid American Standard CEO Emmanuel Kampouris a visit, in order to understand the workings personally. He also accepted an invitation to speak at the company, and spent the better part of one evening’s dinner querying two successful American Standard plant managers about the details of their respective operations — the tools, the social architecture, and how they overcame resistance to the
new methodology.

By involving himself deeply and personally with the subject, Welch learned what it would take to execute such an initiative at GE, and was able to get the necessary changes rolling quickly throughout his huge company. By the time of his retirement in 2001, Welch saw GE’s inventory turns double.

The Leader’s Seven Essential Behaviors
What exactly should you as a leader who is in charge of execution do? How can you keep from being a micromanager, caught up in the details of running the business? The answer is to exhibit the seven essential behaviors of successful execution management:

● Know your people and your business. Leaders have to live their businesses. In companies that don’t execute, the leaders are usually out of touch with day-to- day realities. The bulk of information that reaches them is filtered — presented by direct reports with their own perceptions and agendas.

● Insist on realism. Many organizations are full of people who try to avoid or shake reality, because it is uncomfortable, or too revealing of mistakes made. Yet, realism is the heart of execution, and must be made a priority in every organization.

● Set clear goals and priorities. Leaders who execute focus on a very few clear priorities, for a number of reasons: 1) focusing on fewer (three to four) priorities will produce the best results from the resources at hand; and 2) people in contemporary organizations need a small number of clear priorities to execute well.

● Follow through. Clear, simple goals mean little if nobody takes them seriously. The failure to follow through is widespread in business and a major cause of poor execution. Leaders must surface conflicts that stand in the way of achieving results, and create followthrough mechanisms, such as follow-up meetings, to ensure everyone will do what they’re supposed to.

● Reward the doers. If you want people to produce specific results, you must reward them accordingly. Many corporations do such a poor job of linking rewards to performance that there’s no correlation at all. When companies don’t execute, chances are they don’t measure, don’t reward, and don’t promote people who know how to get things done.

● Expand people’s capabilities. One of the most important parts of a leader’s job is passing on his or her experience and wisdom to the next generation of leaders, thereby expanding the capabilities of the entire organization.

● Know yourself. Everyone pays lip service to the idea that leading an organization requires strength of character; in execution, however, it is absolutely critical. Without such emotional fortitude, you can’t be honest with yourself, deal honestly with business and organizational realities, or give people forthright assessments. This emotional fortitude is comprised of four core qualities: authenticity, self-awareness, self-mastery, and humility. 

 By Larry Bossidy and Ram Charan