Monday, August 10, 2015

Business & Baseball: A Conversation with Jack Welch and John Henry, Moderated by Brian McGrory

I had the distinct privilege of attending this talk, really a conversation with Jack Welch (former CEO of GE) and John Henry (owner of Red Sox, NESN, Liverpool soccer club, and The Boston Globe), moderated by Brian McGrory (Editor of The Boston Globe), held Wednesday night, April 22, 2015, at the Seaport Hotel, in front of a crowd of nearly 500, plus the NESN camera crew. An abridged, edited one-hour version has aired on NESN, and so I am here to fill you in on what you missed, and then pick up where the talk left off. I’m sure the show will air again one of these days during a rain delay.


Jack Welch quickly steals the show with the first few questions about his latest book, titled The Real-Life MBA, written with wife and co-author, Suzy Welch. He repeatedly pushes the key  principles of alignment and engagement in business, and their mantra: tell people where you’re going, why you’re going there, how you’re going to get there, how they fit in, and what’s in it for them.

Jack is a virtual firecracker: hot, fun, loud, and probably more than a little dangerous. He has a sparkle and a glow. And he’s on a roll, as you realize that this is just one stop along his book tour, taking every chance to also promote his online MBA program, his view of business, the economy, and the world.

The room is filled with adoration and admiration for both men. They are clearly as different as night and day. Jack is homegrown, originally from Salem, with a heavy Boston accent. While a chemical engineer by education, he is the textbook charismatic leader. He’s excited – and has an opinion – about everything. I can see why people would follow him. John is a Midwesterner, originally from Quincy, Illinois. That’s Quincy, pronounced properly, “Kwint-see,” which is located along the Mississippi River just a bit downstream of the Quad Cities (please refer to my prior blog post, “Poutine,” published June 12, 2015). John arrived in Boston by way of California, studied philosophy, and followed a more varied career path (if I trust Wikipedia anyway), playing in a couple of bands, and trading commodities. In some ways, I can relate to both of them. My first major (not my last) was chemical engineering, and I think of myself as an amateur philosopher.   

When Brian turns the first question over to John Henry, asking him why he purchased The Boston Globe, John responds: “I must not have had enough challenges.” A very Midwestern reply. “Ha, ha, this is very funny,” I think in my head, but it falls flat and is greeted by only an awkward silence from the audience. My heart is breaking for him. He tries to recover: “Not very funny, I guess.”  

I can’t count the number of times my Dad has said, “Life is about challenges, Rosie,” followed by his tales of how he dug and poured the foundation himself for his first bakery in Plainfield, Illinois, or bought a gutted-out house and re-built it.  We’re not good at sitting around; we always have to have a project that we’re working on.

In a few words, John explains that he wants to be involved in the next phase of journalism, citing its importance to the community. Of course, longer and more eloquent versions of this answer have been published in the Boston Sunday Globe in a full-page editorial piece in October 2013, and in the interview by Jason Schwartz in Boston Magazine in March 2014. Then Brian asks Jack what his advice would be, given the titanic changes shaking the industry, with digital competition and changing readership. Jack agrees that it’s a changing world, where it’s “analog dollars to digital pennies” and it’s “fabulous if you can move faster than the next.” This is not helpful, I think to myself, but only further highlights the uphill battle newspapers face, as they deliver content both digitally and via the driveway. They have a foot in both the analog and digital worlds.  

This reminds me of a conversation with my Dad last summer on the topic of newspapers, and I mentioned that John Henry, owner of the Red Sox, had recently purchased the Boston Globe. “Geez, my God, Rosie, why in the hell would anyone want to do that?” he asked. He went on to complain about the decline in the local newspapers, though he still gets the Chicago Tribune.

Later on in the talk, Brian asks Jack about his 2006 bid to purchase the Globe, and you get a sense that, while Jack had wanted to make the purchase at the time, he might not be regretting that things didn’t work out so much now.

What is the future of newspapers? The only sure thing is that it will be different. Yet, the free press plays such a vital role in providing local insight and analysis of news, in fact sometimes defining what is actually considered news, and shaping a community’s experience of the news . There are just so many new choices. Just as “video killed the radio star,” the internet and the myriad of social media are all challenging conventional news delivery. If Paul Revere could have tweeted it out that the British were coming, instead of going on his midnight ride, he probably would have, wouldn’t he? The first I heard about Ferguson (one year ago) was from a tweet by Tyler Glenn, lead singer of the Neon Trees, and not from any mainstream television or print media. Yet, I also fondly recall feeding the quarters into the news stand to get my copy of the Sunday Chicago Tribune, to read about the world, plus the column of that smart, smart Boston woman, Ellen Goodman.  I wax nostalgic.

But I’ve digressed – back to the talk.

What’s clear is that we are in polite company. There will be some good-natured ribbing, but after all, Brian is interviewing his boss, and Jack and John are essentially houseguests in the Globe’s living room, and no punches are going to be thrown. That’s okay, there is still plenty to be learned from the conversation. The closest we get to a controversial question is whether John knew that Jon Lester had the yips throwing to first base. Answer: No. Of course, what I really wanted to ask at that point is whether there was really fried chicken in the club house in 2011, but I exercise surprisingly great restraint.

Brian calls The Real-Life MBA a “deeply wise book,” and quotes what Jack calls “truth-and-trust” leadership, “relentlessly truth-seeking and trust-building,” a culture where “everybody knows where they stand.” If you have this, Jack says “you’ve got a company that hums! You’ve got the game by the tail!” The problem is that most businesses don’t have this level of transparency. “In baseball, you have transparency.  Every player’s batting averages are in the paper. In business, you don’t have that. People don’t talk candidly.”

Brian jokes, “I’m about to ask John where I stand,” and gets some laughter from the crowd. He’s funny.

Jack goes on to say that people should be told where they stand once a quarter. “That’s not cruel. That’s kind management.” He cites the results of a Gallup study that found 65% of employees are not engaged. “Imagine, in football or baseball, what if 65% of the players stayed in the dugout!” People should know where the business is going, and what’s in it for them, and be given a sense of purpose. This lack of engagement – “this is a tragedy, it’s not fun or enjoyable, and it’s not winning, in baseball or business.”

It’s like having fried chicken in the clubhouse, I think.

Brian reads a quote from the book about leadership. Jack responds: “If you’re the smartest guy in the room, as a leader, you’ve got a problem. Everyone knows something you don’t know. You’ve got to get every mind in the game.” Earlier, when asked about what makes Boston unique, Jack recalled how much he enjoyed the Boston business world, always “a bunch of Italians and Irish screaming at each other, and it’s fun.” (To those of a more Midwestern persuasion, this might sound more like holidays at the in-laws.)

“Companies have to be aligned,” Jack says. When he was at GE, with 400,000 workers, “every single person” knew where the company was going, why, and what was in it for them. “Business truly is like baseball, it’s just not as transparent,” he hollers.

Brian asks them both how important luck has been for them, relative to skill and hard work. John Henry recalls being told by Bill James (a baseball numbers guy), that 80% of the results in any game is due to luck. But, John Henry counters, that it’s the 20% skill, and more so determination, spread across the course of 112 games that makes the difference in a season. Especially determination – that belief, saying “I will not be denied.” 

I’d never realized it, but the reason why baseball teams play a series of three or four games, is because chance and luck play such a huge part in the game, and so winning one game doesn’t really prove much, but winning two out of three or three out of four does. It was my cookie-craving rabbit-finding friend from the first post who filled me in on this, years ago.

Jack agrees, that luck has been huge for him as well in his career. And, I would heartily agree.

It’s funny, when talking to young job candidates, and they’re asked which is most important – luck, skill, hard work, or determination – they typically answer hard work and determination. They just can’t see all the chance events that led to where they are today. From where they sit, all they’ve seen is that persistence leads to results, just as a lab rat gets through a maze, learns to hit a button and get a reward of kibbles. Hard work results in a reward. Of course, this speaks to the heart of Dr. Martin Seligman’s study of how our sense of control shapes our viewpoint. People who see good things as happening because of what they did, and attribute bad things to just bad luck or timing (and no personal causal culpability) are generally more optimistic – and happier.

I recall thinking this same way myself, when I was younger, that I didn’t get to where I was by lying about on the couch all day eating bon-bons. But, I have also always known that I’ve been lucky in a thousand different ways. Hard work and luck both play a part. It helps to work hard. To cite a quote from Dr. Louis Pasteur: “Fortune favors the prepared mind.” (I also found this in my fortune cookie once, too.)

I have to laugh, though, thinking of how many a manager has probably thought the same thing, that it was all purely their skill and strategy that led to hiring the best qualified candidate – but that was probably luck, too! Many a manager has probably sprained a shoulder patting themselves on the back for making a great hire, when it was all luck of the draw, and/or the hand of fate.  

Jack then speaks to the younger attendees in the audience, describing how their managers might be bringing them around the office, by the scruff of their neck, showing off their new hire to everybody. “Hey, look at me, I just got me an engineer from MIT!” I love the imagery, the mother cat carrying its kitten. And it’s so true. Hiring is a joyous event, a cause for celebration. Fun. He also has plenty to say about the other side of things, when someone has to be let go, and gives his perspective on “getting whacked.” Later in the Q & A period, when an audience member asks about dealing with the bottom 10 percent, he grouses a little bit. “I’ve never been asked about how to deal with the top 20 percent.”

Brian’s next question is about pay disparities, and is it okay for CEOs to make huge sums of money, many times what the average employee is making. Jack’s answer: “Yes, if the shareholders are making it, and the employees are flourishing, then they’re winning the game, too. You’re interested in everyone getting their piece of the pie.

John Henry remarks that “maybe it’s not a problem of income inequalities so much as it’s about opportunity inequalities, from the time that a child starts pre-K, and in fact a lot of children probably can’t afford pre-K; though not a problem for us to solve…” His voice trails off, but you can tell that it tugs at him.

Jack’s answer is “more jobs, GDP, and education reform,” criticizing the traditional education system (expensive, tenured), and promoting the pluses of his online MBA program (improved quality, delivery system, and price).

It’s clear that business is not going to fix society’s ills. Not their problem to solve. Let business thrive and provide jobs. That’s what business can do. Highly ironic, I think, given the preceding discussion of luck vs. hard work and determination. Are some opportunities afforded only to the lucky ones? Luck alone will never open some doors.

The first question from the audience asks about how Jack came to be called “Neutron Jack” back in the 1980s. He was in the midst of streamlining, merging and selling businesses, removing layers, cutting staff, and outsourcing. “Not a moniker you want; wish it never happened, but we were ahead of the game.” Other companies eventually followed suit.

After listening to Jack for a while, you can start to see the world through his lens, where everything can be sorted into two bins, either good for business or bad for business. There are simply things that will help it thrive, and those that will threaten its prosperity. When you look through this lens, things start to make sense. GE may have brought good things to life, but it also brought PCBs, too. Environmental compliance is a necessary cost, but still a cost that goes against the bottom line. Later, a woman in the audience asks about STEM outreach. No, it’s not an area he has gotten into. After the talk, I hear another attendee ask him about sustainability, and the answer is the same. These things – STEM, sustainability, and the environment – are tangential, and not on the line forming the shortest path between investment and return.

The second question from the audience is from a fellow who works in manufacturing. “How do you push alignment down to the shop floor?” he asks. Jack tells him that it’s all about going out and talking to groups of employees. “No leader should be hiding in their office; they should be out telling the story,” noting all the social media tools now available. (Jack Welch has about 1.4 million Twitter followers at last check.)  Jack elaborates on this a bit, and at some point John Henry remarks that he doesn’t necessarily agree with everything that Jack is saying, “but I’m not going to argue business with Jack Welch.”

Now, this I find fascinating, because it is precisely the sort of disagreement in approach, method, style, tactics, and philosophy in leadership that is worth exploring. Jack’s advice perhaps works best for Jack and others like him. But, all leaders are not Jack-Welch types. It just matters that a leader be authentic and true-to-themselves in their leadership style. What I found so fascinating in this exchange is that, even though Jack has preached so hard about “getting all the minds in the room,” he has just shut John down, or at least made the prospect of crossing swords with him seem too daunting a task. The challenge to getting participation and input from everyone is creating a space that is conducive to the free exchange of ideas.

In that one single moment, there was such a lost opportunity to examine these different styles.

Now, given that I’d obtained entrance to this event via a press pass (number two, for anyone who is counting), I had prepared some questions in advance, and there was a natural connection between this exchange and one of my questions. So, heart pounding, I raised my hand. If you happened to watch the show, or catch it on an inevitable replay during some future rain delay, that’s me asking the last question.  I wanted to try to use the exchange that just happened as a springboard for a broader question about fostering a culture of inclusivity. What came out was a bit less eloquent than I’d hoped, but here’s the gist of what I meant to say:

You’re both very successful leaders, but also very clearly have different styles. Given that studies show that increased diversity on teams leads to increased creativity and productivity, and yet studies also show that people are most comfortable working with those who are most similar to themselves. Given that, how do you encourage diversity within your organization?

Jack gave his standard answer: “Get everyone in the room together, have a food fight up front, get input from many different minds, then decide on a course, and get everyone on board. You want to get every brain in the game.”

John answers that he “knows that the decisions he makes every morning have far-reaching effects on many people. He’s always thinking about who will be affected and how.”

Yet, both missed a golden opportunity to speak to the elusive goal of figuring out how to reap the benefits of diversity, by fostering a culture that gets past the discomfort of working with people from different backgrounds. The answers weren’t wrong, they just could have been so much more.

To be continued…

Post Script
After a few more grand detours – work, travel, and a tiny bout of food poisoning thanks to an errant roast beef sandwich – I finally wrote up my account of the “Business & Baseball” talk. Ironically, shortly after this episode, the Wall Street Journal tweeted “About 48 million Americans, or 1 in 6, get sick each year from food,” which I re-tweeted: “Make that 48 million and two.” There’s nothing like lying on the couch Googling various types of foodborne illnesses and trying to guess which one you have. For a while, I thought I would never eat anything else but saltines and ginger ale ever again, but have since managed to bounce back.  

While I’ve been out, I’ve also been catching up on my reading, and managed to finish Jack and Suzy Welch’s book, The Real-Life MBA, as well as Pete Rose’s book, My Prison Without Bars, and Jenny Nordberg’s book, The Underground Girls of Kabul. The added benefit of having attended the talk is that I can now hear Jack’s voice hollering off the pages. Seriously, every sentence would have an exclamation point at the end of it, if he had his way. I only regret that I can’t quite tell which parts should be in Suzy’s voice. I loved his description of their writing process, sitting and debating a topic over a few drinks at the bah (“bar” for non-Bostonians), and then Suzy going back to her “cave” to write. This is a whole new take on Virginia Woolf’s room – or cave – of her own.  “She can write like hell!” Jack hollers. They are clearly a dynamic duo.

For the studies mentioned in my question, please refer back to post #12, published Jan 27, 2015, titled “Challenge Yourself!”

Thank you to John Henry for the photo opportunity after the talk. I missed Brian McGrory and Jack Welch, unfortunately. Thanks also to The Boston Globe for the press pass.


In other news:

Thirteen out of fifteen of my Dad’s asparagus plants have sprouted.

The Diane Sawyer interview with Bruce Jenner aired on April 24, 2015 on ABC.
Caitlyn Jenner was introduced to the world on the July cover of Vanity Fair magazine June 1st.

And on June 26th, SCOTUS delivered the ruling recognizing same-sex marriage from sea to shining sea.

Congrats to the Seattle Saracens on their first place finish in the Division I Women’s Rugby Club National Championships, and to Beantown for a very competitive, hard-fought finals match on June 13th, 2015. Well played.

And, congrats to the US Women’s Soccer team for their World Cup victory!

Coming Next
Part 2: The Diversity Challenge. The conversation continues after the talk.  

Advance Notices:

Art Exhibit: Out of the Earth
Artist: Joe Caruso
Sep. 2 - 27, 2015
Receptions: Sep. 4, 11, 27
Gallery: Galatea Fine Art, 460B Harrison Ave., Boston, MA

Oct. 3 - 10, 2015
Boston, MA
Check out the events posted so far, advance registration is available. Some are free and some require paid tickets. It’s an opportunity to get together with some of the great minds of Boston, use various locations across the city to gather in these various living rooms. The week-long event is described as “where art, science and technology collide” – or is it more of an intersection? Meeting? Merging? What is the relationship between art, science and technology?

Women In STEM Summit
Oct. 22, 2015
Bentley University, Waltham, MA.

Boston Book Festival
Oct. 23 - 24, 2015
Copley Square, Boston, MA

Henry, John W., 2015.  Why I bought the Globe. The Boston Sunday Globe. October 27, 2013.

Landro, Laura, 2015. Foodborne Illness Risk Lives On. The Wall Street Journal. July 6, 2015.

Nordberg, Jenny. 2014. The Underground Girls of Kabul: In Search of a Hidden Resistance in Afghanistan. New York: Crown Publishers.

Rose, Pete, with Rick Hill. 2004. Pete Rose: My Prison Without Bars. USA: Rodale.

Schwartz, Jason, 2015. Will John Henry Save the Globe? Boston Magazine. March, 2014.

Seligman, Martin E. P. 1990. Learned Optimism. New York: Vintage Books, a Division of Random House.

Welch, Jack, and Suzy Welch. 2015. The Real-Life MBA: Your No-BS Guide to Winning the Game, Building a Team, and Growing Your Career. New York: HarperCollins Publishers.

© 2015 Rosemary A. Schmidt
Rose Schmidt is the author of “Go Forward, Support! The Rugby of Life.” Use of individual quotes with proper citation and attribution, within the limits of fair use, is permitted. If you would like to request permission to use or reprint any of the content on the site, please contact me.

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