Tag: Jack Welch

Uses and Abuses of Gut Instinct in Corporate World (Part 2 of 2)

Words of wisdom by Mr Jack Welch. Do not miss out and read the first part here.


More often than not, that means we should kill the deal, even if it annoys the so-called rational thinkers on the case. Odds are, they will give us a credit for farsighted thinking down the road (though probably with less public pleasure than you’d like).

By contrast, relying on our gut during hiring a personnel is not always a great idea. Because our gut often makes us fall in love with a candidate too quickly. We see a perfect resume with prestigious schools and great experience. We see a likable individual who says all the right things in the interview.

Even though we don’t admit it, too often we also see a person who can quickly make a problem go away, namely, a big, open, gaping position. So with our gut hurrying us along, we rush to seal the deal.

We see this dynamic action all the time when people call us for references. They start off by firmly stating that they only want an unvarnished view of the candidate in question, but as we start to give it to them, we can feel them begin to wither. Their voices tighten, it’s almost as if they are saying “oh please do not tell me that! All I really wanted from you was a stamp of approval!” They cannot get off the phone fast enough.

So when it comes to hiring decisions, we may want to ask our people to muster up the discipline to doubt and double-check their gut, and we should too. That means dig for extra data about the candidate. Make reference calls and make sure we force ourselves to listen especially to mixed messages and unpleasant insights.

Overall, gut calls to play a real role in the business, and a good one. Do not worry much about explaining that to our bosses and shareholders. They use theirs too.


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Uses and Abuses of Gut Instinct in Corporate World (Part 1 of 2)

Words of wisdom by Mr Jack Welch:


We have two choices, either we tell our boss “Jimmy made that terrific decision based on his tried-and-true gut instinct,” or Jimmy’s gut is 50-50 at best, ask him to stop making decisions that way.”

As a general rule, gut instinct is nothing to be ashamed of. But quite the opposite. It’s just a pattern of recognition.

Gut instinct, in other words, is a deep, possibly even subconscious, familiarity, the kind of knowing that tells us anything from, “go for it now,” to “no way, not ever.” Though we would gamble the most common gut call falls in between the two, the “uh-oh” response, in which informs us that something is not right and we should figure out what it is.

The trick with gut, is to know when to trust it. That’s an easy call when we discover over time, that our gut is usually right. But such confidence can take years of trial and error.

Until that point, perhaps the rule of thumb: gut calls are usually pretty helpful when it comes to looking at deals and less so when it comes to picking people.

Even though deals come to you with all sorts of data analysis and detailed quantitative predictions, and people decisions seem more qualitative, the numbers in deal books are just projections.

Sometimes, projections are reasonable, some cases, they are a little more than wishful thinking. When have we ever been presented with a deal with projected rate of return of less than 20%? We haven’t.

Again, sometimes that’s because a deal is great. Other times, that’s because the people proposing the deal have adjusted the investment’s residual value to make the returns reflect their hopes and prayers.

So when it comes to looking at deals, consider the numbers. But make sure our gut plays a big role in the final call as well. Say we have been asked to invest in a new office building, but visiting the city, we see cranes in every direction. The deals number is perfect, we’re told, and we simply cannot lose. But our gut tells us otherwise, that overcapacity is about a year away and the “perfect” investment is about to be worth $0.60 on the dollar. We’ve got few facts, but we have the “uh-oh” response.


Continue reading Part 2.

The Mind-Set of a Leader


Words of wisdom from Mr Jack Welch:


Understanding that becoming a leader means we will actually have to change how we act. Too often than not, people who are promoted to their leadership position miss that very point… and the failure to do so probably trips up careers more than any other reason.

The fact is, being a leader changes everything.

Before we are a leader, success is all about growing ourselves. Our individual contributions, it is about us raising our hand and us getting called on and us delivering the right answer.

When we become a leader, success is all about growing others. It’s about making the people who work for us smarter, bigger, and bolder. Nothing we do anymore as an individual matters, except how we nurture and support our team and help our members increase their self-confidence. We will get our share of attention from above, but only in as much as our team wins. To describe the other way around, our success as a leader will come not from what we do every day, but from the reflected glory of our team’s performance.

From the ranks, promoted to be a team leader, is a big transition. It’s hard. No doubt about that. Being a leader basically requires a whole new mind-set, one that is constantly not thinking “How can I stand-out”? But is thinking “How can I help my people do their jobs better”?

Sometimes that mind-set requires undoing a couple of decades of momentum. After all, we may have probably spent our entire life, starting in in grade school and continuing through our last job, as an individual contributor, excelling at “raising our hand.”

But the good news is, we were probably promoted because someone above in the organization believes we have the stuff to make the leap from star player to a successful coach.

That leap actually involve actively mentoring people. Giving feedback at every opportunity, not just annual or semi-annual. We should talk to our people about their performance after meetings, presentations, or visits to clients. Make every significant event a teaching moment, discussing with them what we like about what they are and doing ways they can improve. There is no need to sugarcoat our exchanges, use a total candor which happens incidentally to be one of the defining characteristics of effective leaders.

Getting into the skin of our people is another way of growing others. Exude positive energy about life and the work that we are doing together, show optimism about our future, and care. Care passionately about each person’s performance and progress. Our energy will energize those around us.

Being a leader, it’s not about us anymore. It’s about them.