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Social Responsibility According to Jack Welch

Monday, 28 Feb 2011 | 12:20 PM ET
Jack Welch
AP
Jack Welch

Jack Welch is back in the news. His verbal alacrity and passion for one-liners, that is.

His latest message: "The main social responsibility for a company is to win."

Venue: The Tulsa Business Forum hosted by Oklahoma State University's Spears School of Business

Context: Welch is not impressed with the bevy of new alternative-energy products offered by GE. As reported by the Tulsa World, Welch said, "If it doesn't turn green into green, it doesn't turn out to be a helluva good business. The whole idea is to grow jobs," adding, "The main social responsibility for a company is to win."

Well, okay. I understand the baseline of his argument: A business can only benefit its community, consumers and employees by doing well, or being profitable, whichever way you write it. But that one line pushes the subject out of context, and provides the perfect ammunition for the vast majority of executives who'd rather implement business ideas that promise instant returns over long term return on investment.

And this is where green technology is rubbing against its biggest challenge. A recent Booz Allen report predicted that green building projects will support or create 7.9 millionjobs between 2009 and 2013. The catch? These jobs mean hefty investments with long term payoffs and tend to have a staggered effect on hiring rather than creating millions of jobs immediately.

The eventual success of General Electric's ambitious ecomagination is, for now unclear, although, if trends, statistics and data back your business decisions, I would dare to say that GE is on the right track. Consumers are becoming more conscious of their consumption and choice while learning frugality and the power of long term decision making from an unwieldy economic recession. For GE this is a good thing.

Let's return to Welch, however. The report goes on to deliver more gems from the veteran CEO.

The man known for helping to create the "shareholder value" corporate buzzword or cliché, and for laying off thousands of GE employees to reach that efficiency, also did not mince words about anything he was asked on the Mabee stage.

"We played business like it was a sport," Welch said of his philosophy heading up GE from 1981 to 2001. "You make a game of it; you field the best team and weed out the weakest.

"The weeds you've got to pull out if you're going to build a beautiful garden."

Welch's history at GE is already well-documented. His no-nonsense or cutthroat style and "eyes on the money" philosophy is routinely boo-ed and praised by alternative members of the corporate world.

Nor is Welch scared of controversy. In 2009, he caused a mini-revolution in the blogosphere with a similarly veiled comment at the annual Society for Human Resources Professionals (SHRM) conference. "There is no such thing as work/life balance," he said, adding that women have to make choices; the choice between family and the quest for the corner office ... and those choices have consequences.

That statement continues to be challenged by women like DuPont's first-ever female CEO Ellen Kullman, who credits her success to motherhood.

And small business is already challenging Welch's "green to green" philosophy, with thousands working on alternative technologies and new sustainable ways of doing work that organizations conducted for decades without a thought to waste or eventual depletion of resources.

Just last week, I was at the State of Green Business Conference in Washington, D.C., where Timberland CEO Jeff Swartz in a discussion on why businesses must assert standards that come from a moral standpoint, removed his boot on stage and said: "We have included a tiny sustainable logo on all our boots. But that logo is not our selling point. Our selling point is the sturdiness of the boot, its viability, and its longevity. That it's sustainably made is our standard."

This inherent belief in socially responsible business is what Welch is challenging. And one that small businesses like Seventh Generation, Timberland, and Tom Shoes, are proving every day.

(*Note: CNBC is owned by a partnership of General Electric and Comcast)


Aman Singh is the Corporate Responsibility Editor at Vault.com and the author of Vault's CSR blog: In Good Company. She is a New York University alum and previously wrote for The Wall Street Journal. Her area of work includes corporate diversity practices and sustainability, and how they translate into recruitment and strategic development at companies. Connect with her on Twitter @VaultCSR. Comments? Send them to executivecareers@cnbc.com

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