Jack Welch and how he hires CEO’s

Jack Welch is by far one of the best CEO’s in the world history. I watched a youtube interview Thursday this week and what I remembered especially from that interview was how he hired people. This method works equally as well for CEO and COO hiring cases as they do for simpler positions.

It is simply this: line them up (like investment bankers sell companies by lining up bidders) and ask them “why?”. Why should you choose them as your next CEO or COO? Let them sell themselves to you, never the other way around as is usually done.

According to Welch you can never, and should never, be the one who presents to the employee prospects why they should join you. Why you are the best on the block. It will bite you in the ass sooner or later. Because they will see you as a weak manager. Only weak people beg. Strong people demand (or create criterias for others to follow at least).

This goes hand in hand with what I have written about customer sales. Set the price, set the stage and let the customer qualify to do business with you. You can help them along with loan credits etc (only as long as they are credit worthy of course), but never sell out (lowering prices etc). Never act weak. Jack Welch has more credit to his name than me. He is, after all, one of the greatest CEO’s in the history of the business world. If you don’t believe me, believe him.

As you can see, more or less all the information I present here, on this blog, is what the richest guys are already doing in practice (and have been doing for centuries and will continue doing for centuries). They use disqualification methods to build negotiable strength. If you are not in negotiable strength (no matter what the subject. It could be love, sex etc as well as money) then you are toast. Then you will be the dog. You will be the one everyone spanks. To be a winner requires stopping being a follower and a wimp.

Jack Welch also brought up another thing that is also in line with the investment banker reference above. He said: always have a succession strategy. Which basicly means: Have a lot of other CEO’s on stand-by if you need to remove the CEO you have (someday the CEO you have will start to have an ego-trip. They all do. That is the day you bring in the next winner).

Jack Welch mentioned one interesting thing in the interview regarding why companies pay such hugh severance packages (golden parachutes) to CEO’s. It was because of a very bad succession strategy. If you have no other CEO star to put in place, then you have a very bad negotiable position. I know you can all agree with that. So line those stars up and let one of them shine until the ego-trip becomes too big and then fire that ass and bring in the next star on the scene. That will keep your CEO’s and COO’s humble enough, longer. So that you don’t have to change the position all too often. You want to instill that fear in the top dogs. Never let yourself be hostage to the managers.