I trained as a sociologist before I joined my family business and I still like books that are sociological in nature – soulful and intellectual books that inspire while being analytical. So it was with some ambivalence that I bought the biography Jack: Straight from the Gut at the airport to read while on holiday. This book is neither soulful nor analytic, and not my usual cup of tea. I bought it because it is a popular business book and because both my company's CEOand non-executive chair have enjoyed it. They think it is a great book and I read it to see what had intrigued them.
What I quickly learned is that the recent history of General Electric and its executive chairman Jack Welch's role in this history varies from family business. Mega-deals, self-appointing management, ruthless and ongoing selectivity of people, hundreds of millions of dollars spent on intellectual development, necessity of selling core businesses to meet regulatory requirements -– GE's context is different from most family businessses.
Jack thrived in this environment. He enjoyed making mega-deals and faced the music when the deals occasionally went sour. He liked not being formally accountable and in truth the freedom enabled him to do more than anyone to create shareholder wealth. Unlike most family business founders, he is comfortable with the Darwinian policy of terminating 10% of management per year, and restricting company education and stock options to the elite. He has the stomach to eviscerate companies to meet regulatory requirements and ensure a deal is achieved. Clearly, Jack is a no-nonsense sort of guy.
I found the lack of emotion in this book disturbing but to the extent that you can overlook this, there is plenty to appreciate both about business and Jack. For underneath Jack's detachment and wilfulness is a very passionate person. He is a man with a love for quality, organisational learning, wealth creation and reality. He is a man who would not let his nuclear division plan more reactors unnecessarily, and who re-directed its resources to quality service. He is a man who would not hurt the ecology of the Hudson River just because he had been instructed to do so.
There are also some rich ideas in this book: an exploration of the relative contribution of six sigma and the internet to profits; social opportunity in a boundaryless environment; the nature of globalisation. The most interesting idea for me was the prescription to define markets both narrowly and broadly. Domination of a small market, being number one or number two, ensures that, in the Michael Porter sense, there is a strategy; one is not just selling commodities. Simultaneously, broad focus creates awareness of growth opportunities.
Jack: Straight from the Gut is a rich book and a worthwhile read – it just takes a little effort.