True HR Believer Jack Welch Jump-Starts SHRM

By John Hollon

Jun. 17, 2009

Here’s a question you may want to ponder: How important is Sunday’s SHRM conference general session speaker, former General Electric CEO Jack Welch?

Answer: He’s probably the most relevant and topical HR thinker to address the conference in at least the last five years—maybe the most relevant one ever.

Here’s just one example, from the BusinessWeek column he writes along with his wife, Suzy Welch: “HR should be every company’s ‘killer app.’ What could possibly be more important than who gets hired, developed, promoted, or moved out the door? Business is a game, and as with all games, the team that puts the best people on the field and gets them playing together wins. It’s that simple.”

Or this, also from a recent BusinessWeek column: “Look, we’ve written before about HR and the game-changing role we believe it can—and should—play as the engine of an organization’s hiring, appraisal, and development processes. We’ve asserted that too many companies relegate HR to the mundane busy-work of newsletters, picnics, and benefits, and we’ve made the case that every CEO should elevate his head of HR to the same stature as the CFO. HR matters enormously in good times. It defines you in the bad. … If there was ever a time to underscore the importance of HR, it has arrived.”

Welch began his career with General Electric in 1960, and he worked his way up through the ranks to become the company’s chairman and CEO in 1981. During his 20-plus years as CEO, GE’s market capitalization rose from $13 billion to $400 billion, while revenue grew from $27 billion to $125 billion and earnings grew to almost $14 billion. Welch became a management superstar along the way. In 2000, he was named “Manager of the Century” by Fortune. The irony here is that he’s a pinch-hitter at the conference, stepping in for former NBC news anchor Tom Brokaw, who was originally scheduled to speak.

A 2005 “Last Word” column in Workforce Management put it this way, and it’s still true today: “In Jack Welch’s world, HR is not only a key part of the business, but HR people in the organization need to have special qualities to help the managers throughout the organization build leaders and careers.”

Some might disagree with this assessment, because Welch is also known for creating the infamous 20-70-10 employee assessment plan (known by its critics as “rank and yank”), where the top 20 percent of GE’s workforce each year got big raises, while the bottom 10 percent were shown the door.

In fact, Welch was frequently critical of human resources, according to former General Electric HR chief Bill Conaty.

But as critical as he can be, Welch also appreciates what HR means to a high-performing organization. Welch has said that HR leaders should not be “kingmakers or cops, but big-leaguers, men and women with real stature and credibility.” He will undoubtedly have a message on Sunday that SHRM conference attendees really need to hear.

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