Unit 42 of 63
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Jack Welch’s HR Practices

The late CEO of General Electric (1981-2001) is not a resource most startup Founders think of naturally.

Isn’t GE the corporate behemoth par excellence, a textbook example of the inertia, complexity, and internal politics that startups should keep clear of?

Despite its size, the GE of Welch, and to some degree of his successor, Jeff Immelt, has a lot to offer to Founders experiencing fast growth.

After all, GE was the first large company to embrace the Lean Startup philosophy and methodology, even inspiring Eric Ries’s second book, “The Startup Way.”

As we discuss what value VCs can add to the startups they invest in, Jack Welch’s “Bottom 10% Rule” cannot be ignored.

Any company, regardless of its size, thrives only because the people who work there execute a well-thought strategy. You don’t need to have only “A” Players, but you always need to have the optimal mix of skills.

It’s even more true for startups, especially when they are still small. One bad hire can set back your execution plan by months, and burn through your precious cash pile.

Watch the interview with Gary Vaynerchuck and his wife Suzy Welch, then read the additional material to understand how Welch’s HR practice can help you influence the Founders you work with.

What did you think of these principles? How much of it applies to the startup environment, in your view? Why, or why not?

💬 Let us know in the Comments section below.

👀 Sources & Additional Material

Responses

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  1. I think that those principles are not sustainable. Though at an early stage, a company can look more attractive (especially to VCs), but in the long-run it sticks to the company reputation. In our time, with technology and social media, reputation, values, cultures and work environment are very important. However I do agree that having the right people executing a well-thought strategy.

  2. I think that these principles make even more sense for an early-stage startup. In that scenario, every person must deliver very good work for the startup, and must be credible from investors considering that the Team is what early VCs most look at when valuing investments.

  3. I think these principles make sense. From my point of view, they can be applied much to the startup environment. In early-stage investment, it’s all about ‘people business’. Sometimes you don’t even have complete financial statements to make analysis on. So it’s crucial to make the members of the startup “attractive” to the investors, which makes principles aforementioned well suitable for this situation.

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