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Mon 21 Apr 2008 06:19 PM

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Honesty, transparency key to business growth

Former GE chief Jack Welch discusses 'winning strategies' with Gulf business leaders.

Honesty, transparency key to business growth
WINNING STRATEGIES: Welsh, pictured, said honesty and transparency were key to the success of businesses. (Getty Images)

Former General Electric chief executive Jack Welch on Monday discussed with business leaders in the Gulf how best his "winning strategies" for business could be applied in the region.

In his first executive management seminar in the Gulf, Welch spent the first day of a two-day exclusive forum outlining to 150 business leaders the importance of mission and values to building a business, how to be a good leader and the importance of effective teamwork.

"When companies win, people thrive and grow - there are more jobs and more opportunities," said Welch, at the 'Winning Strategies with Jack Welch' forum being held in Dubai from April 21-22.

At the seminar exclusively covered online by ArabianBusiness.com, Welch is showcasing his 21 years' experience as the head of GE where he grew the company's market value from $12 billion in 1981 to $400 billion in 2001 and earned him the title 'CEO of the Century' from Fortune magazine.

Welch spoke to delegates primarily about one of his major contributions to the realm of global business - mission statements, which define the aims of the business, and a statement of values, the ethos upon which the business is based.

"People are to be judged by their performance and by their values," said Welch, saying that people fall into four categories in a company based on this.

The first was the person who is performing and has the same values as the company, who naturally prospers in the company, Welch said.

"For the one who isn't getting the numbers [performing] or doesn't have the company's values, that's easy - you just shoot 'em' [dismiss them]," he said.

As for the person who is not meeting their targets but does share the values of the company, Welch said keeping them was essential.

"You give them a second chance," said Welch. "You put them in another part of the company where they will prosper as they share your company's value."

However, Welch said the most dangerous person in a company was someone who met his targets, but did not share the values of the company.

"He's dangerous because he doesn't share your values and that'll eventually come out," said Welch. "Most companies keep these people as they're getting the numbers - but you should get rid of them as quickly as you can."

The human resources (HR) department of companies were also taken to task by the former chief executive for being under-utilised in building the values of a company.

"HR is not about setting up picnics and birthdays - it's about leadership development and partnership," said Welch.

"It has to be an integral part of developing the values of the company."

Welch also expounded the value of candour in business as being "the biggest dirty little secret", saying transparency and honesty were key values for a business.

The present implementation of candour in the region was met by a mixed response from delegates.

"This part of the world knows nothing about transparency," said one Saudi chief executive. "There is a hypocrisy about being transparent and open."

"For most of us, our values are in Islam in which there are tools for honesty and integrity," said another Gulf chief executive. "However, some aspects of our culture are holding us back in being candid."

"People will take it as personal judgment rather a critique," said an Emirati businesswoman in the audience in response.

Welch said it was important for companies to be open about appraising the performance of candidates, whilst praising the positive aspects of their work.

"We need to get into a rhythm of discussion," said Welch. "[This is where] each of you are sitting down and [you say] 'I like way you are doing and this is what you can do to improve'."

In his session on teamwork, Welch emphasised that he was always encouraging Harvard MBAs he works with to delegate more, and do less.

"Usually these guys are the best and brightest people in the room, and you have to stop them raising their hand," said Welch. "A leader recognises it is not about them anymore - it's about the team."

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