Jack Welch, brilliantly eccentric CEO of General Electric, is no longer speaking to Bill Lane. From 1981 through 2001, while Welch unswervingly drove GE into a corporation of unprecedented value, Lane stood at his side, serving as speech writer, confidant, and true friend. Even after retiring, both men remained close.
But this January, McGraw-Hill published Lane’s very forthright “Jacked Up: The Inside Story of How Jack Welch Talked GE into Becoming the World’s Greatest Company.” Welch, who had no hand in the composition, is less than enthralled.
The public, however, remains greatly intrigued. The Welch business model, with its amazing success, slammed tradition-hemmed corporate America in the chest, and wrapped its creator in a near mythic aura. Now Lane offers an insightful and often hilarious account of how Welch operated, and how his “No B.S.” approach to communications can work for executives today. Lane speaks at the meeting of New Jersey chapter of the International Association of Business Communicators on Tuesday, June 10, at 9 a.m. at the Basking Ridge Country Club. Cost: $65. Visit www.njiabc.com or call 973-267-4328.
“Very few children, myself included, start out saying that they want to be speechwriters when they grow up,” says Lane. “As most, I somewhat fell into the position.” A native of Brooklyn, Lane attended Niagara University as an English major, graduating with a bachelors in 1965. He earned a masters in American history from Northern Arizona University and pursued graduate studies in this field at American University.
Lane moved to the Pentagon, where he served as Congressional liaison for the Army. One of his primary duties was to write the opening statement for the Army’s budget defense. His writing skills caught the eye of under secretary of the Army, Norman Augustine, who soon had Lane writing his speeches. Lane’s work became popular, and shortly many staff generals were clamoring for him to write their speeches.
One day, after seven years in the Pentagon, Lane’s boss shoved a classified ad across his desk and urged Lane to apply. Despite initial reluctance, Lane soon found himself managing the six-person speechwriting bullpen for General Electric in Fairfield, Connecticut. Shortly after taking the helm, Welch called in Lane as his personal speechwriter. They stayed together until Welch retired from GE in 2001, and Lane in 2002. During that tenure, it became Lane’s unpleasant duty to fire all GE’s other speechwriters, whom Welch deemed unnecessary.
Speeching with Jack. “Welch actually did not like making speeches,” says Lane. “He saw them as an ‘unproductive pain.’ But once committed to a speech, he became an absolutely obsessive editor.” Welch would summon Lane to his office, curse roundly about having to speak, then begin to pour out a nonstop steam of ideas. Lane, prepared for the onslaught, would set out two tape recorders while the CEO paced hard and ranted.
“Tell them this… Oh, and don’t forget this… And also….” Welch would go on. All the while he would pause mid-torrent to self-correct, “No, no, not that way — this way… now play that back.” These freewheeling frenzies would last about 45 minutes until both men were exhausted, and Welch would say, “Well, does that give you enough for a draft, Bill?”
Lane would then dutifully retreat to his office, replay the tapes and two days later return with draft number one. Welch would read it and then began the editing process in which 50 to 100 new drafts were honed. At last, when the final copy was selected, Welch would score it with his own private delivery notations designed to cover the stutter he ever-labored to get over.
Lane admits to originally being less than thrilled to work with the legendary CEO. “He really was a nut and everything was maniacal and tiring — but it was invariably aimed at excellence” says Lane.
Honesty: whodathunk? “Jack Welch was a brilliant business operator, but he was absolutely spectacular when it came to communicating,” says Lane. As Lane’s subtitle says, Welch literally talked his company into first place by convincing employees, financial analysts, and investors alike. And Welch’s prime communication tool was an total, unshakable candor with everybody about the company.
When GE was about to fall short of a published goal, Welch himself and several of his managers would instantly get on the phone and inform the key business analysts of the drop, and honestly explain why. This reputation for total candor became so strong that once Welch’s single remark “Next year we’re really going to hit the ball out of the park,” proved sufficient to drive the stock price up $5 a share.
This “No B.S.” credo became a crusade for Welch and a corporate habit for GE. At a time when spin and glitz were standard business tools, the Welch insistence on transparent truth struck like a laser. “I went to that (expletive) meeting and in three days not one true sentence was spoken,” Welch once reported to Lane. Instead of maintaining a positive image, Welch demanded his managers say, “This is what we did, this is why it failed, here’s what the rest of you can learn.” Anyone who lied was instantly fired, Lane recalls.
Similarly, in dealing with employees, Welch presented a total transparency of communications. “There were no secret conversations or deals being made in the board room that were kept from the employees; and they all knew that,” says Lane.
Jack: neutron or not? Much has been made of Welch’s seemingly ruthless divestiture of both GE employees and divisions during his reign. Employees and the press alike began labeling him “Neutron Jack” and wondering what area the CEO would bomb next.
Granted, from 1981 to 1985 — Welch’s first four years as leader — GE went from 411,000 employees to 299,000. Using the maxim that if you can’t be number one or two in a business, get out, he sold off many low-profit-margin divisions. This included Utah International, GE’s huge mining operation, and even its housewares division. “Boy, when he got rid of the vacuums and toasters you should have heard the howls about how Welch is selling GE’s legacy,” says Lane.
Welch dumped every thing that he considered irrelevant — including the GE company magazine. But the story less told was how lavishly Welch treated those who survived the streamlining. Lane notes that Welch knew a surprising number of his managers individually, and held on to people he judged to be high producers, even when letting their entire division go. “It was a lean team, but to those who made the cut, Jack was very — ridiculously — generous,” Lane says, “and he would overwhelmingly outbid any firm that tried to lure his favored people away.”
Welch’s results were undeniable. He set out to have GE excel in all aspects of business: earnings, revenue, investment turnover, but definitely his major goal was boosting the share price of GE’s stock. And this he did. In his first five years, GE stock increased to 50 times earnings. By the time he left, the stock as a whole was 50 times the value of when he came in as CEO. For the investor, Welch was a heaven-sent leader.
And for Lane? When Welch made his first introductory speech as CEO, Lane recalls him stepping up to the microphone and saying, “Well, how do you like having a stuttering overachiever as your new CEO?”