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Jack Welch: Intensity, passion, compassion
 Welch: Keep making it better and keep learning. SPECIAL REPORTYOUR SAY
LONDON, England (CNN) -- CNN Financial Editor Todd Benjamin speaks to Jack Welch, former CEO of General Electric. The following is a transcript of the interview. Q. What do you think separates a good leader from a great leader? A. I think a great leader galvanizes lots of people and they feel the same sort of success that the leader feels. A good leader will get the mission done but will not galvanize enough people to share in the psychic and financial rewards of the event. Q. But why do you think that some leaders have that quality to galvanize? A. I think a lot of it is inherent. I think there are in my leadership kit there are four things I look for in people: The ability top energize, have the edge to make decisions and then execute, get the job done. And the last two are clearly learned. The amount of energy you have and energizing capability are sort of innate characteristics. And do you want ... your employees to be as victorious in every way as you are? Q. But can you tell when you're talking to somebody, if they have potential as a leader? A. You get your shot at it. And I would say I got at 50 percent in my youth and I got up to 80 and never got to 100 percent right. Q. Well even Babe Ruth had a bad day. What do you think it is though, when you look at that person or listen to that person that tells you they have potential as a leader? A. Intensity, passion and compassion. Care about people, passion to get there and intensity, care more, just want to do it. If you feel this guy now in the coastguard thing down there, I don't even know the man, but he comes across as somebody who's going to get things done and he wants to do it in the right way. Q. If you hadn't gone into business what do you think you would have ended up doing? A. Well, I would have tried like hell to become a professional hockey player but I wouldn't have been good enough, so then I would have bounced around ... I don't know I have an inherent love of business in some form or another. I can't play the cello I can't sing as you can tell from my voice. I'm not sure there are many other routes for me. This had to be it. Q. But why do you think you were so good at business? A. Well if I were good at business, people think I am so let's presume I am. I think I knew how to galvanize people. I think I knew how to find good people. I was comfortable hiring people who were smarter than I was around me. I was never the smartest person in the room. And I searched for the best and the brightest all the time. Q. But some people would say you're being modest. I was just talking to somebody who said they've talked to a lot of business leaders and never met anybody as smart as you. A. Well, it's nice of them to say. But the reason that I might look smart is because I pick the brains of the smartest people around me and I got smart people. Every one of us, you're a successful correspondent because you watched a lot of smart people do it right, do it wrong, you synthesized a number of views to get to where you are. That's what I did. I synthesized a lot of great people's activities. Some people ask me: "Who is your mentor"? I forget that question. I said: "No-one." Everyone was my mentor. No one person was my mentor. Someone over here could speak well, some one over here could do something better, some over here in science, some over here in finance. They can be above me, below me, in the middle. You're always searching. That's the key to getting better. Q. You think your greatest strength as a manager was galvanizing people. What do you think your greatest weakness was? A. If I had a weakness, maybe it was a weakness and a strength. I'm rather emotional. I am passionate. I want to win and I might be load sometimes when perhaps I shouldn't, but I can kick and hug with equal capability. I'm in the game. Q. Now you played competitive sports as a kid. Do you think this is where this competitiveness came from, or do you think it came from someplace else? A. I think it came from that, my mother. I was an only child, she was always pushing me. Q. This is a thing that struck me when doing the research for this interview. Everything I read, which comes across more than anything else, is what a powerful influence your mother was in your life. A. Incredibly so. She taught me the ability to hug and kick to differentiate a whole series of things. There's almost nothing my mother... she was savvy she knew how to be a good friend, she had friends form early years, she was strong minded, if somebody crossed her she remembered that. It's like the Irish Alzheimer's -- you never forget a grudge. I mean but she had characteristics that said you could always do better. "Come on Jack, you can do better, what are you doing?" Q. And there's even an example of course in a hockey game. You lost the game, you threw your hockey stick across the ice you came storming into that locker room and what did she tell you? A. The guys were coming in getting undressed and a lady in a print dress comes charging in, I was the captain of the team and she grabs me by the shirt and says: "You punk. If you don't know how to loose you shouldn't play the game." And in front of all my friends humiliated me. But it was a great learning lesson. People say to me you have to lose don't you. And I say yea, but I know how to do it. You get up off the floor and you get at the next one. Q. But she also gave you a lot of love and she never made you, in a sense, feel a lack of confidence. You had a stammer as a child. A. An enormous stammer, I still have it. And she would always say to me "Jack, your brain is just so fast your tongue just can't keep up with it, don't worry about it." I mean give me a break and I never thought I had a stammer. And I used to be terrible, I couldn't get words out. Q. Even those of us who don't have a stammer sometimes have a tough time getting the words out, so it cuts both ways I assure you that. Do you think there's anything fundamental in your childhood that made you who you are today? A. Yea I think I play competitive sports in an organized fashion where you went to the playground and the best players were picked threw the bat up first pick come to the guy who had his hand on top of the bat. Worst players went to right field, best player pitched or played shortstop, second base got the second worse player and we differentiated when we were 12 years old. And football to me today is almost the perfect metaphor for running a good business. You have a cap on salaries and the best players are taken care of the weaker players get less, get pushed off the team, better ones get brought on, all the things you want to do in business. Business is no different than a sports game. You want to build the best team and the best team means breading out the weak in a careful way building the middle, the linebackers if you will in football, and making your stars feel like stars. Q. In your book you yourself are a huge proponent of candor but you say the biggest, dirty little secret in business is a lack of candor. A. And it's shocking, the lack of candor in appraisals. I don't want to embarrass you here today, but how often do you get appraised in writing, about what they like about Todd Benjamin and what they're not so sure and what you can improve and do you know exactly where you stand in the CNN hierarchy because you're told by your bosses? I would venture without knowing, probably not, probably not. Q. We get appraised twice a year A. and is it candid? Q. It is candid A. Then that's damn good. Q. But I'll tell you what bothers me about the appraisal system, I think it should cut both ways, it's not 360. A. Well that's got to happen. It's got to be two ways. But in the end think about how many decisions, how much gobbledygook one goes through in business language that could just be straight forward to the point get there. So we believe candor. We believe every manager has an obligation to let their people know where they stand. People shouldn't be surprised. They shouldn't be surprised by the competition. We spoke to a group of Delta people, Delta airlines, the day they were going bankrupt in new York at a global conference and had a reception with them. And I asked them, forget asking me questions, how do you feel at 1 o'clock knowing at 4 o'clock that you're going to be in bankruptcy? And they said terrific, our management has done everything, they communicated with us totally. We know exactly where we stand, we can come out of bankruptcy, it's going to be a tough hull but it was a classic case of communication being done right. These were middle managers. Q. You use your sports analogy you talk about a need for candor, you make it all seem so simple yet so few managers can really pull it off. Why? A. I don't know why. One thing I would say is this: When we go to business schools, Susie and I have gone to 23 business schools in the U.S.. And we talked to all these kids and it's clear and it's clear in my experience that when you hire someone if I had hired you as a fresh MBA you come out all charged up, you got the answer to everything, you've got all these knowledge points, you are raising your hand waiting to achieve. Three years from now, you've done such a good job as an individual, we want to make you a manager. And fortunately at least half of you and maybe more forget it's no longer about you, it's about the new people you're leading, and you will only be as good for the rest of your career the next 30 or 40 years, you will only be as good as the people you have with you. Q. Let me ask you something about something else you said. One of the things you said is you need to defy gravity, instead of taking the middle 70 percent for granted treat them like the heart and soul of the organization. A. It's the differentiation, top 20, middle 70 bottom 10. The top twenty is easy -- give them raises, take care of them. The bottom 10 is easy -- have them move on and they will move on themselves, you won't have to fire them, if you tell them where they stand. But that middle 70 you can't just let them sort of be there, you have to be motivating them, training them, giving them options, giving them a chance to get to the top 20. They're the buck of your work, they're doing most of your work and you can't just go to each end -- get rid of the bottom and play with the stars -- you got to keep puling this middle 70 up. Q. Of all the things I read that you said, the one I like the best is: "No matter how scripted all careers appear, they all have an element of chance." A. No question. I mean I can see. I quit my job the first year I was at GE a boss who had seen me do a great presentation came, overruled my existing boss and kept me. I blew up a factory. That could have gone either way. Out or somewhere else. I had to meet two people up in New York and explain how I blew up this factory. And they liked my approach of how I went at it, the candor of the way I expressed my mistakes, and the logic I had to fix it so I met people. I ended up working for a very formal, terrific CEO -- the opposite of me the absolute opposite he -- had six choices to make CEO. You would have thought he would have picked somebody that was as straight as he was as perfect as he was, very rigid. Q. You didn't fit the GE mold. Why didn't you fit the GE mold and why do you think you made it to the top? A. Because I kept getting results, I kept getting fantastic results, because I built great teams that delivered great results and every business they gave me was in trouble and I fixed it, if it was doing well I made it do twice as well. And I say the team I had, I weeded out the week. Then it came down to the end and I know exactly how I got it. Because my predecessor knew the Japanese were coming. America was fat and sloppy and he couldn't do it and he told me that. He said I don't have the stomach to take on changing this place like this. And I was 44 years old and I didn't know any better. I was excited to take it on. Q. Why do you think you love business so much? A. All the parts about it. You deal with great people and the diversity of it is so marvelous. You have a deal one day a crisis another day a hiring another day. It's fun. It's not like a dentist drilling everyday in someone's teeth -- it's all diversity and variety. It's a game. Q. And if you had to give advice to a CEO in terms of staying on top what would it be? A. Keep learning. Drive for learning. Drive for better people. Don't be satisfied. keep making it better and keep learning. Q. Out of everything I've read, the most disturbing is this: You say that a boss's top priority is competitiveness. If he or she is doing his job right, then they're making the job so interesting that their personal life becomes less compelling. That rings true, but some people would find that disturbing. A. Some people will, but the facts are a manager's job is to make the job exciting, thrilling, rewarding, the soul and the wallet and obviously it gives the person a little more tug from the home and the job, both competing forces. You want to make your placed as attractive as possible. What would be the alternative Todd? Let's make your workplace dull, lousy people so all you want to do is get out of there and get home. Give me a break. You want to have the most exciting fun workplace in the world and yes a great home life you balance. I'm not balancing it. Q. Do you think you've paid a price for that priority, because obviously you went through a messy divorce. A, But that has nothing to do with that, that had nothing to do with work. I had four fabulous kids, nine great grandchildren, I'm lucky enough to meet the all-time woman, she has dour fabulous kids, I start again and that's sensational, I didn't pay any price for that I had a home run. My kids, my grand kids play with my step kids, this is heaven, and this isn't trouble. How could a guy like me, from Salem, Mass possibly have a regret? I mean, I'm sitting here talking to you in a beautiful hotel in London. My wife and I are going to Milan in 48 hours to see friends and speak there. It's all gone very well. I have a wonderful family. I have a wonderful family I think we built the greatest company in the world. I have a great family. I have a great successor doing a good job. It would be tough for me to complain. Q. You obviously did a good job no doubt about it. The market cap increased by 4 hundred billion during your 10 years there. You retired three days before 9/11 your predecessor came into a very difficult situation. Do you think it's tougher being a CEO today then it was 10 or 20 years ago? A. Not today. It was September 11 and 12 and 13 and 14. But today, let's take today. If you go back to 1980, here's the environment that I fixed. I got the job. Japanese are coming at you like crazy. Prime rate 13 percent, unemployment 20 percent, and inflation 16/18 percent those seem like the worse of times. Now here you have the Chinese, but you have lower inflation, you got 4 straight years of GDP growth after 9/11. I think everyone feels their time is the toughest time. 
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