Welch spreads business gospel from MIT pulpit

updated 9:26 a.m. ET Oct. 16, 2006

CAMBRIDGE, Mass. - "Don't fall in love with your workers," a business instructor tells a student who's launching a small startup company. "If you've got 16 employees, at least two are turkeys."

It's hardly the only piece of blunt, politically incorrect advice the charismatic teacher dishes out in a windowless basement classroom filled with 30 MBA candidates, many of them hoping to eventually become CEOs. Wearing a blue blazer and checked shirt, the baldheaded instructor stands in front of a lecture table, rather than behind, through most of the 90-minute session, sharing his management ideas with a preacher's fervor.

If it sounds like the instructor is copping an I've-seen-it-all attitude, it's because he has reason to. He's Jack Welch.

While Welch's 20-year-run run as chairman and CEO at General Electric Co. generated criticism that he was too quick to cut jobs — leading to the not-so-flattering nickname "Neutron Jack" — he also won legions of followers who regard him as a management guru with unparalleled leadership abilities and business acumen. Then there's his record of increasing GE's market value by more than $400 billion before he retired in 2001 as head of the industrial, financial services and media conglomerate.

Last month, the 70-year-old began his first classroom job, teaching an eight-session weekly course at the Massachusetts Institute of Technology's Sloan School of Management, across the Charles River from his townhouse in Boston's ritzy Beacon Hill section.

Jack Welch: Biographical details — Name: John Francis "Jack" Welch Jr. — Title: Retired chairman and CEO, General Electric Co. — Born: November 19, 1935 in Salem, Mass — Education: B.S. in chemical engineering, University of Massachusetts-Amherst, 1957; M.S. and Ph.D. in chemical engineering, University of Illinois, 1960 — Professional background: Joined General Electric in 1960 as a junior engineer in Pittsfield, Mass. Rose through the ranks at GE, becoming vice president in 1972; senior vice president in 1977; vice chairman in 1979; and chairman and CEO in 1981, positions he held until his retirement in 2001. — Personal: Married to his third wife, Suzy Welch, nee Wetlaufer. Lives in Boston. Source: Associated Press

The course is titled "Conversations with Jack Welch," and it's aptly named.

Although Welch eagerly solicited students' ideas during one of his recent Wednesday afternoon sessions, the management ideas he discussed throughout the class were his alone.

Pairing up a young employee with a single mentor "is one of the stupidest ideas around in management," the instructor said, because the mentor "may be a turkey."

When negotiating a deal, tell your rival what you want the moment you sit down at the negotiating table.

"It gets the deal done faster," he said. "You totally disarm them by putting your cards out on the table. You take all the cleverness out of the game."

And don't bother trying to improve the performance of underachievers in the bottom 10 percent of the company's work force, he said. Tell them they're not suited to their jobs, and give them a way out.

"The theory is his, the opinions are his, and we are here to hear what he has to say," said student Tal Ben-Shahar, a 34-year-old former major in the Israeli Air Force who someday hopes to return to his home country to run a company. "He has a lot of experience — much more than the average professor."

The class's only required textbook is "Winning," a management guide he co-authored with his wife, Suzy Welch.

Students don't seem to mind that the class revolves so heavily around Welch.

"I sense no arrogance, or even a hint of his experience being crammed down our throats," said Paul Scearce, 42, a Lockheed Martin Corp. executive who's attending MIT on a mid-career fellowship. "It's much more about making us think and sharing his personal experience."