Businessweek Extra - John Byrne

certainly well known to many of our listeners. That's exactly right, and lucky for us, we had an inside track to talk to someone who knew him incredibly well, the co author of his autobiography, Jack Straight from the Gut. That's John Burne. Check it out. Jack Welch, so much talked about former chairman and CEO of General Electric. He passed away one week ago at the age of eighty four. Someone who knew him beyond the headlines that most of us read is John Burne. He wrote the book with

Jack Welch. It's his autobiography. It was entitled Jack Straight from the Gut. He spent a lot of time with them, more than a thousand hours of full year, a level of intimacy really no journalist Cats with a source and a friendship that certainly continued. John joins us from San Francisco. So I have to say John, first, condolences. I know that he was a close friend and mentor, uh and someone who gave you a lot of advice over the years, unvarnished.

What was your first thought when you heard that he had passed, Well, there was a sense of sadness. Um. He was really a larger than life figure. And I know that's almost a cliche, but in his case it really fits. He squeezed every precious moment out of every minute in his life, uh to get the most out of it. He was fun to be with. Uh. He could be a very um scary character when he got mad. Uh. He was remarkably intense. He Uh. He was wickedly smart. Um.

And when you were in his orbit, you somehow spell special. Um, you didn't feel ordinary anymore. Uh. And that was the kind of magic that he had with a lot of people. And he was very much a people person, I mean he um. And he would go right to it. Well, so what what whatever, Wherever there was some something that he could provoke, he would provoke it. Before you wrote

the book with him. UM, and I think two thousand one, you actually first got to know him back in and you wrote a story for Bloomberg or what was Business Week at that time. It became the longest UM cover story in the magazine's history. Take us back, that was what was your first impression of him? What was the first time you met him and sat with him? UM? Do you remember that? Sure? Well, contrary to what people think,

he never sought the limelight. The limelight sought him, and it was difficult for him to actually sit down with a journalist. UM. It took me a year to gain access to do that cover story. So but once he opened the door, he completely opened the door. I spent four months. I interviewed well over fifty executives in the company. I traveled all over the country to different divisions, and

I interviewed him multiple times. And the story really told, UH the sort of narrative of how did this one guy have so much influence over this massive global corporation with three hundred and fifty thousand employees and a range of business that was truly mind boggling, from appliances and light bulbs to aircraft engines and UM, the aircraft engines and power generation equipment. Um, how does everyone know him

as Jack? And how does he wield this influence? And it really got inside the motivational techniques that he used to get performance out of the company. He would do these handwritten notes that became prized within uh GE to people who really made a difference and uh and those things hung in their offices and they were just like the amazing, most best honor you could ever get. UH.

So I got to know whom there. And then as he approached his retirement two and a half years later, he came to me and asked if I would help him write his memoir. Of course, there was no hesitation. I agreed to me that experience was like having a PhD in management or leadership. I did, in fact, spend well over a thousand hours face to face one on one with Jack. Uh. It was the most grueling experience of my life. We fought a lot over what should

be included, what shouldn't be included. UH. He was very demanding. We went through many, many, many drafts. I can tell you some of the chapters went through something like eighteen twenty drafts. We'd sit side by side after I would write, uh, and to make the manuscript his own. He would go over every paragraph, every sentence, every word. We'd fight over

commas and dashes. So one time, after scribbling all these notes all over the pages, UM, he turned to me, grabbed my arm, looked me in the eye, and said, you're gonna mess this up, aren't you. He used a more colorful than mess it up? Okay, but that was Jack. Yeah. And so what did you learn about him in that process? About him as a human, because again, the intimacy that you gain over that many hours and over telling someone's life story in that level of detail, what did you

learn about him? Well? I learned that one of the remarkable characteristics that he had was his love for people. And while he could be incredibly tough on people, um, literally beat them up, he also just as easily could come over to them, wrap his arms around them, and tell them in the most genuine way possible, I love you, UM. And that meant a lot to people. And he rewarded

people incredibly generously. You know, we often think, uh, in Silicon Valley and I'm here in the Bay Area that um, these companies are very generous and buy a lot of talent with stock options. Well you know, jack us stock options very effectively in a big conglomerate made tens of thousand people uh millionaires as a result. So if you performed and really did well by the company, you did well by yourself because he made sure that you were

generously awarded for your work. So his intense focus on people. People were everything to him. He spent an extraordinary amount of time teaching at Crotonville Gees Center for Education. UH. He spent an unbelievable amount of time in personal reviews getting to know all of the top management and leaders

in the company. He was a meddler. He violated the chain of command every single day, sometimes reaching down in the organization five layers and having people report to him over years, like on a weekly basis, UH if they had a particular challenge or problem that they needed to solve that he felt was important to the company. And by by reaching that far down and violating the chain chain of command, he that's how he became Jack to to everyone in the company, even though there are three

hundred fifty thousand employees all over the world. John I will say, I have an uncle who worked for a general Electric for a long time in Connecticut, would talk about I mean, referred to him as Jack and he would come to you know, factory floors or plants. Um. You know. He was certainly was somebody who was very visible. I do wonder I want to go back to the process of you writing, because there was somewhere I read,

you know, Jason mentioned a thousand hours you spent. You spent so much time with him, but you were doing things. Sometimes it was over pizza and beer, microwave popcorn. Uh, sometimes a great bottle of Bordeaux. I do wonder what was he like because here's somebody who, when he left the job, got an incredible payout. I think of, you know, hundreds of millions of dollars, you know, but somebody who kind of worked his way up. Um, what kind of guy was he? Because he was someone who achieved an

incredible level of success. But it seems like he also found great joy and some very simple things. Uh he did, and and the truth is okay. So he's the first generation college grad. His dad was a railroad conductor. Uh he Jack did have a PhD. Uh and engineering. But he was as simple and straightforward as you could ever imagine someone Um. He used a lot of colorful language. He had a lot of fun with the life. Uh, simple things meant a lot to him. I'll tell you

one story that I remember very vividly. I went to his home. He had a vacation home, and then talk at a beautiful place. And we went out to a charity function for a charity that he was supporting. And we came back that night and they had a guesthouse. I was staying at the guesthouse. So the moment I walked in the guesthouse to phone rings, I pick it up and it's Jack and Jack is yelling on the phone. Also, he spoke very loud. Uh. He was yelling on the

phone in his raspy voice. John, John, come outside, Come outside. So I walked outside and then he's I see him on a deck overlooking the guesthouse, and he's yelling at me. Look up, look up, look up. And it is a beautiful night. The stars are shining. It's kind of magical. And then he shouts, isn't that incredible? So so he's that kind of guy, right. I'll tell you another story that's um that told me a lot about him, or at least reinforced the things that I felt about him.

You know after he left ge Uh there was a big bruhaha. Uh, in part because his second wife filed divorce papers, um, and outlined a lot of perks that he had that that we're actually quite embarrassing to him. But what happened is, Um, this is about six months after our book was published, and it was published, incidentally, on September eleven. The September eleven was on the bestseller list for six months. Um. But here we are, six

months after the fact. At my weekend home. It's Sunday night, something like eight thirty at night, and the phone rings. I pick it up. It's Jack, and Jack is telling me that in the following morning, the Wall Street Journal is going to run a story that's going to report that he has a relationship with the editor of the Harvard Business Review, and he wanted to let me know that that was true, that he loved this woman, and that if anyway I felt disappointed or betrayed in him,

he wanted to apologize to me. And I thought, wow, okay. Number one, he didn't have to do that. Number two, he was being totally accountable and taking whatever painful consequences would result from this story, in this uproar that would occur over it. Uh. And he's really incredibly human and and loyal to a friend because he didn't want the friend to think, um, that he had disappointed him. And I think that just tells me so much about the quality of this man and how he lived his life.

And so, John, as you read and hear everything that's been written and talked about since Jack's death, what do you make of it? What do you make of his legacy? Because it's fair to say from a business perspective, it's a complicated one, given you know what has happened to Ge specifically, and even some of his lieutenants who went on to other jobs, some very successfully, uh, some maybe not so much, and some questions raised there. What do you make of it? As someone who we should point

out a little brag for us. Uh, you wrote more Business Week cover stories than any person in history, so you know a thing or two about business. What do you make of his business legacy? Here's the truth of it is that, Look, anyone who lives a meaningful life, anyone who makes a very big difference in this world, um, is going to have some flaws or imperfections that the media is gonna jump all over so you know you

can read. Um. There was one piece in the New Yorker, for example, that basically said, the reason why there is a Bernie Um, a Bernie sand is because of Jack welch. Or there's a columnist in the Washington Post who wrote about the toxic legacy of Jack Welch. Uh. And when they write about these things, what they talk about is what they consider to be his focus on the short term, his focus on shareholder return as opposed to a broader

stakeholder theory of how a business should be run. Uh. The truth is he was hardly a short term manager because for twenty years he was CEO and chairman of GE and for twenty years that company performed exceptionally well. That is not a short term manager Number one, number two in terms of running the company for shareholder wealth. Yes, shareholder wealth. Market capitalization was a scorecard for him, an

important scorecard. And um, it was an important scorecard not only for his investors, but also for his employees because so many of them had stock options and they were rewarded handsomely for the performance of that company. I I do not believe that he was merely a person who was a shareholder return guy. Uh. If you look at how he treated his people, Uh, you wouldn't come away with that conclusion. How he treated the suppliers or his customers,

they were all very important to him. So I'm just curious though, too, since you know, I'm not sure how much you guys kept in touch. It sounds like you know, you were in touch with him, you know, after he left the company. Were there any conversations that he had maybe like maybe I shouldn't have increased our exposure to the financial sector so much because that was certainly incredibly

problematic after the financial meltdown. I'm just curious if if there were anything that he kind of had a rethought about after he left, especially because he saw, you know, the things that happened. Yeah, I think he would consider his greatest single mistake, um, his success sir. And Uh, Look, you can't blame Jack for what happened to the company after he left. You can blame him for everything that happened while he was there for twenty years in the

in the top job. Um, but I think what happened after he left is largely the fault of his successor and UM in many choices that were made by Jeff m L at GE. So in terms of financial exposure, there was an unwritten rule at General Electric that the financial assets should never exceed a certain threshold. And that belief occurred because the feeling was that if it did go beyond a certain level, Wall Street would look at GE differently and value GE differently, more as a financial

company than what it actually was. UH. And the truth is that Jeff m. L actually went beyond that threshold and increased the company's exposure to the initial markets, so that when the Great Recession came UH, it became more vulnerable to the shock of that now. Uh. Jack did not buy a subprime mortgage company a year before the Great Recession occur occurred in one of the biggest in America. Jeff and Melt did. So it's you know, it's unfair to say, Okay, I'm gonna now judge Jack on how

GE performed after long after he left. It just doesn't make any sense. It really doesn't. There are plenty of other things you can blame to right. His acquisition that Kidder Peabody was a total mess and and really quite dumb and stupid, and he would admit that he if he were here today, he would tell you the single biggest mistake he made was on a succession. UM. He made other mistakes as well that are actually cataloged in

the book. You know, when we wrote the book, one of the things that he didn't want to do he didn't want to dish dirt. He didn't want to settle scores, and he didn't want to be critical of anyone. And actually that became very difficult for me because there's a lot of you know, juice, Yeah, in those areas that he would not go to. Um. He didn't want the book to be preachy. He wanted it to come off

as if he were sitting at a bar. He was having a beer and next to him was a stranger who he had just met, and he's telling his story too. So there is that informality that real jackness to the book. UM. But but he wouldn't go anywhere near being critical of other people or dishing dirt. That wasn't his his routine. I wish we were at a bar and having some trace because I think we could talk to you for hours, but but we can't. UM. But thank you so much.

For giving us some insight that really nobody really had, you know, except for you, in terms of who Jack Welch was and is thinking. So thank you so much for sharing it with us and with the magazine this week. Thank you, I really enjoyed that conversation. You've been listening to Bloomberg Business Week Extra. Be sure to tune into Bloomberg Business Week Radio Live Monday through Friday at two pm Wall Street Time on Bloomberg Radio. I'm Carol Masser and I'm Jason Kelly. This is Bloomberg