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Widely regarded as one of America’s most influential business leaders of the past 50 years, Jack Welch, who left General Electric in 2001 after two decades in charge, was never going to slip quietly into retirement.
The 78-year-old former chemical engineer who became GE’s larger-than-life chairman and chief executive has been reinventing himself as a teacher, and he is not doing it by halves.
In 2009, he eschewed full-time retirement at his Florida home to set up the Jack Welch Management Institute, with a view to rolling out the next generation of Jack Welches. His name is upfront and he is proud of it. “It’s mine. I can design the faculty. I can select the dean. I can control the product.”
Nor does the marketing slogan for his executive MBA pull its punches: “Most MBA programmes study great leaders. Ours is taught by one,” it reads.
Sitting in his central Manhattan apartment, which has some of the best views of New York that money can buy, Welch counters the notion that becoming a business professor is a reinvention. “I’ve spent 20 years at GE teaching. I taught every month. Then I taught at MIT [Sloan School of Management] for five years,” he begins. “I love the process – I’ve been hooked on it for 35 years.”
In truth, Welch, who has lost little of the penetrating stare of his GE days, displays an enthusiasm for the subject of education that few business school professors can muster. But the man known for his pugnacity holds little truck with the scale, the focus and the business model of the traditional business school.
The traditional MBA, he says, is “a gracious way to change jobs because you made a mistake the first time”. And business schools are inefficient. “I just saw overheads everywhere and I saw the cost of tuition racing ahead as these overheads built up.”
Yet he insists that the online Jack Welch EMBA is not competing directly with the elite MBA programmes. “We are not that system; this is not us versus them,” he says.
Instead, it is all a matter of scale. Previously, on a campus-based programme, “I was teaching 35 kids in a classroom”, complains Welch. “I was teaching 35 people from 4pm to 5.30pm. Now I’m on video with 400 or 500.”
Welch wrote most of the original EMBA curriculum himself with the help of wife Suzy, the author and business journalist and a former Baker scholar at Harvard Business School. That has since been revised, he is quick to point out. “Now it’s been improved, thank God.”
Central to the pedagogy of the EMBA is Welch’s belief that practice rather than theory should be the basis of a degree for working managers. “It’s all the principles of business applied,” he says of his degree.
“I’ve got my own principles of management,” he adds. “We have the philosophy: we teach it on Monday, you practise it on Tuesday, you share it on Friday.”
He has called on former colleagues and other executives to teach on his programme, including Carlos Brito of Anheuser-Busch InBev, James McNerney of Boeing and Jeff Immelt of GE, as well as several retired executives “We have a faculty that talk about the stuff they do every day. We’re not taking on research papers.”
The question that really gets under his skin is whether retired executives are best placed to teach the latest corporate structures and management strategies.
“The biggest mistake that people make in strategy is assuming the competition sticks to the same strategy. It’s the classic mistake,” he says. “We talk about it all the time in class. The competitive environment is dynamic.” His voice rising a little, Welch explains that his EMBA teaches a “five-slide” presentation model that begins with defining the playing field. “In my bones I know it works,” he says.
Professors who teach the programme are not tenured, nor do they have contracts, but are employed on a day-to-day basis. Welch has a personnel style that has mellowed little since his payroll-paring days at GE, where following jobs cuts in the 1980s he was dubbed Neutron Jack, after the bomb that eliminates people without damaging buildings.
When choosing the dean, he interviewed tenured professors from some of the world’s top business schools but proposed a very different regime for them. “Three out of four of them asked me about tenure policy,” he recalls. “That was the end of the interview. I can get the people I want – I don’t need people who hang around and want to teach 40 hours a semester.”
At GE, Welch was famous for saying that it was not companies that guaranteed jobs but their customers, and it is a mantra he still holds dear. Professorial longevity depends on the satisfaction of students, who are polled three times during every course. “We monitor the heck out of [faculty].” Bad reviews mean they are replaced.
Part of the review process is the level of engagement between professors and their students. Welch describes a scenario in which an EMBA student would stay up all night to write a paper, kids crying, spouse wanting attention. “You need faculty who will pick up the phone and talk through the challenges with you,” he says. “If faculty [just] write ‘nice job’ on the paper, it’s like a dagger through your heart.
“We had some ‘nice job’ faculty. They’re gone.”
Four years into the programme, Welch admits that even he has been subject to student rejection. He wanted to bring participants together in one place at the start of the programme. “The answer was a resounding no,” he recalls.
“When you demand they meet together they don’t like it. They’ve got lives, they manage businesses, they own businesses. ‘Asynchronous’ is why they join. They should get three degrees for doing this course. These people are juggling incredible loads.”
Determined as ever, Welch is not giving up on his attempts to bring the EMBA participants together. The lack of socialisation is the school’s “Achilles heel”, he says. “You don’t go the bar and talk about it afterwards.” His next move is to organise dinners for participants in the cities in which they work.
Welch brushes aside the question about whether his business school, and the for-profit Strayer University, which has a majority stake in it, will make money. “I’m not going to get rich. I don’t need the money.” The views from the apartment’s corner office underline his point: Central Park through one window and Roosevelt Island through the other.
“There is no amount of money that will beat [great] student feedback,” he continues. “The story we get is like a needle in the vein.”