Speaker 1: This is Bloomberg Business Week from Bloomberg Radio. I'm Jason
Speaker 1: Kelly and I'm Carol Masser. Welcome to the Bloomberg Business
Speaker 1: Week Extra. It's our weekly podcast bringing an in depth
Speaker 1: interview you will not hear anywhere else. And Jason, there
Speaker 1: was a lot going on this week and it also includes.
Speaker 1: Just about one week ago, we got news of the
Speaker 1: passing of legendary iconic CEO of General Electric, Jack Welch,
Speaker 1: certainly well known to many of our listeners. That's exactly right,
Speaker 1: and lucky for us, we had an inside track to
Speaker 1: talk to someone who knew him incredibly well, the co
Speaker 1: author of his autobiography, Jack Straight from the Gut. That's
Speaker 1: John Burne. Check it out. Jack Welch, so much talked
Speaker 1: about former chairman and CEO of General Electric. He passed
Speaker 1: away one week ago at the age of eighty four.
Speaker 1: Someone who knew him beyond the headlines that most of
Speaker 1: us read is John Burne. He wrote the book with
Speaker 1: Jack Welch. It's his autobiography. It was entitled Jack Straight
Speaker 1: from the Gut. He spent a lot of time with them,
Speaker 1: more than a thousand hours of full year, a level
Speaker 1: of intimacy really no journalist Cats with a source and
Speaker 1: a friendship that certainly continued. John joins us from San Francisco.
Speaker 1: So I have to say John, first, condolences. I know
Speaker 1: that he was a close friend and mentor, uh and
Speaker 1: someone who gave you a lot of advice over the years, unvarnished.
Speaker 1: What was your first thought when you heard that he
Speaker 1: had passed, Well, there was a sense of sadness. Um.
Speaker 1: He was really a larger than life figure. And I
Speaker 1: know that's almost a cliche, but in his case it
Speaker 1: really fits. He squeezed every precious moment out of every
Speaker 1: minute in his life, uh to get the most out
Speaker 1: of it. He was fun to be with. Uh. He
Speaker 1: could be a very um scary character when he got mad. Uh.
Speaker 1: He was remarkably intense. He Uh. He was wickedly smart. Um.
Speaker 1: And when you were in his orbit, you somehow spell special. Um,
Speaker 1: you didn't feel ordinary anymore. Uh. And that was the
Speaker 1: kind of magic that he had with a lot of people.
Speaker 1: And he was very much a people person, I mean
Speaker 1: he um. And he would go right to it. Well,
Speaker 1: so what what whatever, Wherever there was some something that
Speaker 1: he could provoke, he would provoke it. Before you wrote
Speaker 1: the book with him. UM, and I think two thousand one,
Speaker 1: you actually first got to know him back in and
Speaker 1: you wrote a story for Bloomberg or what was Business
Speaker 1: Week at that time. It became the longest UM cover
Speaker 1: story in the magazine's history. Take us back, that was
Speaker 1: what was your first impression of him? What was the
Speaker 1: first time you met him and sat with him? UM?
Speaker 1: Do you remember that? Sure? Well, contrary to what people think,
Speaker 1: he never sought the limelight. The limelight sought him, and
Speaker 1: it was difficult for him to actually sit down with
Speaker 1: a journalist. UM. It took me a year to gain
Speaker 1: access to do that cover story. So but once he
Speaker 1: opened the door, he completely opened the door. I spent
Speaker 1: four months. I interviewed well over fifty executives in the company.
Speaker 1: I traveled all over the country to different divisions, and
Speaker 1: I interviewed him multiple times. And the story really told,
Speaker 1: UH the sort of narrative of how did this one
Speaker 1: guy have so much influence over this massive global corporation
Speaker 1: with three hundred and fifty thousand employees and a range
Speaker 1: of business that was truly mind boggling, from appliances and
Speaker 1: light bulbs to aircraft engines and UM, the aircraft engines
Speaker 1: and power generation equipment. Um, how does everyone know him
Speaker 1: as Jack? And how does he wield this influence? And
Speaker 1: it really got inside the motivational techniques that he used
Speaker 1: to get performance out of the company. He would do
Speaker 1: these handwritten notes that became prized within uh GE to
Speaker 1: people who really made a difference and uh and those
Speaker 1: things hung in their offices and they were just like
Speaker 1: the amazing, most best honor you could ever get. UH.
Speaker 1: So I got to know whom there. And then as
Speaker 1: he approached his retirement two and a half years later,
Speaker 1: he came to me and asked if I would help
Speaker 1: him write his memoir. Of course, there was no hesitation.
Speaker 1: I agreed to me that experience was like having a
Speaker 1: PhD in management or leadership. I did, in fact, spend
Speaker 1: well over a thousand hours face to face one on
Speaker 1: one with Jack. Uh. It was the most grueling experience
Speaker 1: of my life. We fought a lot over what should
Speaker 1: be included, what shouldn't be included. UH. He was very demanding.
Speaker 1: We went through many, many, many drafts. I can tell
Speaker 1: you some of the chapters went through something like eighteen
Speaker 1: twenty drafts. We'd sit side by side after I would write, uh,
Speaker 1: and to make the manuscript his own. He would go
Speaker 1: over every paragraph, every sentence, every word. We'd fight over
Speaker 1: commas and dashes. So one time, after scribbling all these
Speaker 1: notes all over the pages, UM, he turned to me,
Speaker 1: grabbed my arm, looked me in the eye, and said,
Speaker 1: you're gonna mess this up, aren't you. He used a
Speaker 1: more colorful than mess it up? Okay, but that was Jack. Yeah.
Speaker 1: And so what did you learn about him in that process?
Speaker 1: About him as a human, because again, the intimacy that
Speaker 1: you gain over that many hours and over telling someone's
Speaker 1: life story in that level of detail, what did you
Speaker 1: learn about him? Well? I learned that one of the
Speaker 1: remarkable characteristics that he had was his love for people.
Speaker 1: And while he could be incredibly tough on people, um,
Speaker 1: literally beat them up, he also just as easily could
Speaker 1: come over to them, wrap his arms around them, and
Speaker 1: tell them in the most genuine way possible, I love you, UM.
Speaker 1: And that meant a lot to people. And he rewarded
Speaker 1: people incredibly generously. You know, we often think, uh, in
Speaker 1: Silicon Valley and I'm here in the Bay Area that um,
Speaker 1: these companies are very generous and buy a lot of
Speaker 1: talent with stock options. Well you know, jack us stock
Speaker 1: options very effectively in a big conglomerate made tens of
Speaker 1: thousand people uh millionaires as a result. So if you
Speaker 1: performed and really did well by the company, you did
Speaker 1: well by yourself because he made sure that you were
Speaker 1: generously awarded for your work. So his intense focus on people.
Speaker 1: People were everything to him. He spent an extraordinary amount
Speaker 1: of time teaching at Crotonville Gees Center for Education. UH.
Speaker 1: He spent an unbelievable amount of time in personal reviews
Speaker 1: getting to know all of the top management and leaders
Speaker 1: in the company. He was a meddler. He violated the
Speaker 1: chain of command every single day, sometimes reaching down in
Speaker 1: the organization five layers and having people report to him
Speaker 1: over years, like on a weekly basis, UH if they
Speaker 1: had a particular challenge or problem that they needed to
Speaker 1: solve that he felt was important to the company. And
Speaker 1: by by reaching that far down and violating the chain
Speaker 1: chain of command, he that's how he became Jack to
Speaker 1: to everyone in the company, even though there are three
Speaker 1: hundred fifty thousand employees all over the world. John I
Speaker 1: will say, I have an uncle who worked for a
Speaker 1: general Electric for a long time in Connecticut, would talk
Speaker 1: about I mean, referred to him as Jack and he
Speaker 1: would come to you know, factory floors or plants. Um.
Speaker 1: You know. He was certainly was somebody who was very visible.
Speaker 1: I do wonder I want to go back to the
Speaker 1: process of you writing, because there was somewhere I read,
Speaker 1: you know, Jason mentioned a thousand hours you spent. You
Speaker 1: spent so much time with him, but you were doing things.
Speaker 1: Sometimes it was over pizza and beer, microwave popcorn. Uh,
Speaker 1: sometimes a great bottle of Bordeaux. I do wonder what
Speaker 1: was he like because here's somebody who, when he left
Speaker 1: the job, got an incredible payout. I think of, you know,
Speaker 1: hundreds of millions of dollars, you know, but somebody who
Speaker 1: kind of worked his way up. Um, what kind of
Speaker 1: guy was he? Because he was someone who achieved an
Speaker 1: incredible level of success. But it seems like he also
Speaker 1: found great joy and some very simple things. Uh he did,
Speaker 1: and and the truth is okay. So he's the first
Speaker 1: generation college grad. His dad was a railroad conductor. Uh
Speaker 1: he Jack did have a PhD. Uh and engineering. But
Speaker 1: he was as simple and straightforward as you could ever
Speaker 1: imagine someone Um. He used a lot of colorful language.
Speaker 1: He had a lot of fun with the life. Uh,
Speaker 1: simple things meant a lot to him. I'll tell you
Speaker 1: one story that I remember very vividly. I went to
Speaker 1: his home. He had a vacation home, and then talk
Speaker 1: at a beautiful place. And we went out to a
Speaker 1: charity function for a charity that he was supporting. And
Speaker 1: we came back that night and they had a guesthouse.
Speaker 1: I was staying at the guesthouse. So the moment I
Speaker 1: walked in the guesthouse to phone rings, I pick it
Speaker 1: up and it's Jack and Jack is yelling on the phone. Also,
Speaker 1: he spoke very loud. Uh. He was yelling on the
Speaker 1: phone in his raspy voice. John, John, come outside, Come outside.
Speaker 1: So I walked outside and then he's I see him
Speaker 1: on a deck overlooking the guesthouse, and he's yelling at me.
Speaker 1: Look up, look up, look up. And it is a
Speaker 1: beautiful night. The stars are shining. It's kind of magical.
Speaker 1: And then he shouts, isn't that incredible? So so he's
Speaker 1: that kind of guy, right. I'll tell you another story
Speaker 1: that's um that told me a lot about him, or
Speaker 1: at least reinforced the things that I felt about him.
Speaker 1: You know after he left ge Uh there was a
Speaker 1: big bruhaha. Uh, in part because his second wife filed
Speaker 1: divorce papers, um, and outlined a lot of perks that
Speaker 1: he had that that we're actually quite embarrassing to him.
Speaker 1: But what happened is, Um, this is about six months
Speaker 1: after our book was published, and it was published, incidentally,
Speaker 1: on September eleven. The September eleven was on the bestseller
Speaker 1: list for six months. Um. But here we are, six
Speaker 1: months after the fact. At my weekend home. It's Sunday night,
Speaker 1: something like eight thirty at night, and the phone rings.
Speaker 1: I pick it up. It's Jack, and Jack is telling
Speaker 1: me that in the following morning, the Wall Street Journal
Speaker 1: is going to run a story that's going to report
Speaker 1: that he has a relationship with the editor of the
Speaker 1: Harvard Business Review, and he wanted to let me know
Speaker 1: that that was true, that he loved this woman, and
Speaker 1: that if anyway I felt disappointed or betrayed in him,
Speaker 1: he wanted to apologize to me. And I thought, wow, okay.
Speaker 1: Number one, he didn't have to do that. Number two,
Speaker 1: he was being totally accountable and taking whatever painful consequences
Speaker 1: would result from this story, in this uproar that would
Speaker 1: occur over it. Uh. And he's really incredibly human and
Speaker 1: and loyal to a friend because he didn't want the
Speaker 1: friend to think, um, that he had disappointed him. And
Speaker 1: I think that just tells me so much about the
Speaker 1: quality of this man and how he lived his life.
Speaker 1: And so, John, as you read and hear everything that's
Speaker 1: been written and talked about since Jack's death, what do
Speaker 1: you make of it? What do you make of his legacy?
Speaker 1: Because it's fair to say from a business perspective, it's
Speaker 1: a complicated one, given you know what has happened to
Speaker 1: Ge specifically, and even some of his lieutenants who went
Speaker 1: on to other jobs, some very successfully, uh, some maybe
Speaker 1: not so much, and some questions raised there. What do
Speaker 1: you make of it? As someone who we should point
Speaker 1: out a little brag for us. Uh, you wrote more
Speaker 1: Business Week cover stories than any person in history, so
Speaker 1: you know a thing or two about business. What do
Speaker 1: you make of his business legacy? Here's the truth of
Speaker 1: it is that, Look, anyone who lives a meaningful life,
Speaker 1: anyone who makes a very big difference in this world, um,
Speaker 1: is going to have some flaws or imperfections that the
Speaker 1: media is gonna jump all over so you know you
Speaker 1: can read. Um. There was one piece in the New Yorker,
Speaker 1: for example, that basically said, the reason why there is
Speaker 1: a Bernie Um, a Bernie sand is because of Jack welch.
Speaker 1: Or there's a columnist in the Washington Post who wrote
Speaker 1: about the toxic legacy of Jack Welch. Uh. And when
Speaker 1: they write about these things, what they talk about is
Speaker 1: what they consider to be his focus on the short term,
Speaker 1: his focus on shareholder return as opposed to a broader
Speaker 1: stakeholder theory of how a business should be run. Uh.
Speaker 1: The truth is he was hardly a short term manager
Speaker 1: because for twenty years he was CEO and chairman of
Speaker 1: GE and for twenty years that company performed exceptionally well.
Speaker 1: That is not a short term manager Number one, number
Speaker 1: two in terms of running the company for shareholder wealth. Yes,
Speaker 1: shareholder wealth. Market capitalization was a scorecard for him, an
Speaker 1: important scorecard. And um, it was an important scorecard not
Speaker 1: only for his investors, but also for his employees because
Speaker 1: so many of them had stock options and they were
Speaker 1: rewarded handsomely for the performance of that company. I I
Speaker 1: do not believe that he was merely a person who
Speaker 1: was a shareholder return guy. Uh. If you look at
Speaker 1: how he treated his people, Uh, you wouldn't come away
Speaker 1: with that conclusion. How he treated the suppliers or his customers,
Speaker 1: they were all very important to him. So I'm just
Speaker 1: curious though, too, since you know, I'm not sure how
Speaker 1: much you guys kept in touch. It sounds like you know,
Speaker 1: you were in touch with him, you know, after he
Speaker 1: left the company. Were there any conversations that he had
Speaker 1: maybe like maybe I shouldn't have increased our exposure to
Speaker 1: the financial sector so much because that was certainly incredibly
Speaker 1: problematic after the financial meltdown. I'm just curious if if
Speaker 1: there were anything that he kind of had a rethought
Speaker 1: about after he left, especially because he saw, you know,
Speaker 1: the things that happened. Yeah, I think he would consider
Speaker 1: his greatest single mistake, um, his success sir. And Uh, Look,
Speaker 1: you can't blame Jack for what happened to the company
Speaker 1: after he left. You can blame him for everything that
Speaker 1: happened while he was there for twenty years in the
Speaker 1: in the top job. Um, but I think what happened
Speaker 1: after he left is largely the fault of his successor
Speaker 1: and UM in many choices that were made by Jeff
Speaker 1: m L at GE. So in terms of financial exposure,
Speaker 1: there was an unwritten rule at General Electric that the
Speaker 1: financial assets should never exceed a certain threshold. And that
Speaker 1: belief occurred because the feeling was that if it did
Speaker 1: go beyond a certain level, Wall Street would look at
Speaker 1: GE differently and value GE differently, more as a financial
Speaker 1: company than what it actually was. UH. And the truth
Speaker 1: is that Jeff m. L actually went beyond that threshold
Speaker 1: and increased the company's exposure to the initial markets, so
Speaker 1: that when the Great Recession came UH, it became more
Speaker 1: vulnerable to the shock of that now. Uh. Jack did
Speaker 1: not buy a subprime mortgage company a year before the
Speaker 1: Great Recession occur occurred in one of the biggest in America.
Speaker 1: Jeff and Melt did. So it's you know, it's unfair
Speaker 1: to say, Okay, I'm gonna now judge Jack on how
Speaker 1: GE performed after long after he left. It just doesn't
Speaker 1: make any sense. It really doesn't. There are plenty of
Speaker 1: other things you can blame to right. His acquisition that
Speaker 1: Kidder Peabody was a total mess and and really quite
Speaker 1: dumb and stupid, and he would admit that he if
Speaker 1: he were here today, he would tell you the single
Speaker 1: biggest mistake he made was on a succession. UM. He
Speaker 1: made other mistakes as well that are actually cataloged in
Speaker 1: the book. You know, when we wrote the book, one
Speaker 1: of the things that he didn't want to do he
Speaker 1: didn't want to dish dirt. He didn't want to settle scores,
Speaker 1: and he didn't want to be critical of anyone. And
Speaker 1: actually that became very difficult for me because there's a
Speaker 1: lot of you know, juice, Yeah, in those areas that
Speaker 1: he would not go to. Um. He didn't want the
Speaker 1: book to be preachy. He wanted it to come off
Speaker 1: as if he were sitting at a bar. He was
Speaker 1: having a beer and next to him was a stranger
Speaker 1: who he had just met, and he's telling his story too.
Speaker 1: So there is that informality that real jackness to the book. UM.
Speaker 1: But but he wouldn't go anywhere near being critical of
Speaker 1: other people or dishing dirt. That wasn't his his routine.
Speaker 1: I wish we were at a bar and having some
Speaker 1: trace because I think we could talk to you for hours,
Speaker 1: but but we can't. UM. But thank you so much.
Speaker 1: For giving us some insight that really nobody really had,
Speaker 1: you know, except for you, in terms of who Jack
Speaker 1: Welch was and is thinking. So thank you so much
Speaker 1: for sharing it with us and with the magazine this week.
Speaker 1: Thank you, I really enjoyed that conversation. You've been listening
Speaker 1: to Bloomberg Business Week Extra. Be sure to tune into
Speaker 1: Bloomberg Business Week Radio Live Monday through Friday at two
Speaker 1: pm Wall Street Time on Bloomberg Radio. I'm Carol Masser
Speaker 1: and I'm Jason Kelly. This is Bloomberg