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Jack Welch -- Be The 'Chief Meaning Officer'

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This was the advice given by the legendary Jack Welch to 4,300 aspiring startup founders and CEO’s last week at TiECON, the largest entrepreneurship conference in Silicon Valley. Welch was speaking with his co-author and wife, Suzy Welch, to promote their new book, “The Real Life MBA,” the proceeds of which will go towards inner city scholarships.

While Welch is best known as former CEO of General Electric , one of the largest and most innovative companies in the world, his advice about leadership resonated with the startup crowd. Welch himself never went down the startup path, but he was a great intrapreneur, having built GE’s Plastics and Chemical Divisions into $1 billion units. He is a cultivator of talent like no other in American history. According to Vivek Paul, a former CEO of Wipro and protégé of Welch, there are 50 CEO’s of large American companies who worked directly for Jack Welch at some point.

To Welch, the most important thing a CEO can do today is to be the Chief Meaning Officer. In their book and in remarks to audiences, both Jack and Suzy Welch emphasized that a very small percentage of people (around 10% possibly), know their roles within their organizations. This, in turn, drives insecurity and frustration among employees. Leadership, even in a startup environment, involves sharing a sense of greater meaning and vision with employees and partners about their work, and continuously telling them where they stand – in terms of their performance as individuals and in relation to the performance of the company. And, likewise, that people have a responsibility to ask their peers and bosses about their own performance.

There is a certain irony in Welch’s remarks. Millennials are the one group that constantly asks for professional feedback, and they are constantly skewered and criticized for it. But, maybe they have been right all along.

When I met Welch after his remarks, I asked how a leader could nurture talent in the startup ecosystem- where tasks are distributed and outsourced outside the organization as much as possible. He believes that his principles of leadership remain the same, whether the company is a startup or a multinational. According to Welch, a good leader must find ways to motivate people within their sphere of influence and operations. In today’s economy, this sphere extends outside the corporate structure to include investors, stakeholders and partners. And now, the sphere needs to be “flatter and faster.”  Executives need to lead and motivate as a member of the team, rather than through hierarchy and defined incentives.

Welch also hit upon the changing dynamics of the American economy, where high-growth small companies are playing a great role in job creation and economic development. The Great Recession of 2008 really decimated corporate innovation budgets, which furthered the trend of pushing innovation down to the university and startup level. Welch believes that this hasn’t changed the fundamental principle of business competition - that the best player will still win, but it does change how the best player will win. The most important thing now is speed, and winning with speed favors the flat organization and the speedy startup.

This resonates in Silicon Valley. TiECON, where the Welches spoke last week, is the annual conference of The Indus Entrepreneurs, the largest entrepreneurship organization in the world. TiE’s Angel network often hears pitches from many of Silicon Valley’s best startups before others do, and the organization has seen 10 of its members lead their startups to $100 million+ exits over the last 18 months. TiE events reflect the energy and intelligence of Silicon Valley.

Both Jack and Suzy Welch commented on the uniqueness of Silicon Valley in that regard. Suzy Welch reminded the audience that, while they are part of the most exciting community in the world, they still have not found ways to help California with challenges like its current water crisis. She pressed that America needs the Silicon Valley culture to spread beyond the Coasts. Jack Welch was not as sure that the culture of other American cities could change to be more like the Bay Area, but he emphasized that the technologies being created in Silicon Valley are helping the rest of America to be more productive and competitive. When asked about his legacy, Jack Welch responded that “legacy is a bore.”  Definitely an answer that resonates with entrepreneurs.