226 InManagersWeTrust
cept in American politics, GE practiced it, getting ideas from those
closest to the particular problem. This technique not only is most
likely to generate the best solutions, it also builds self-confidence
through participation and counters insecurity by discouraging turf
battles, parochialism, and other impediments to speed and stretch.
Apart from these practices within the boundaryless culture,
Welch instilled a sense of the right sorts of managers for a thriving
enterprise. Four types of managers are defined. The first two are
easy: Type I believes in GE’s values and delivers (and sticks around),
whereas type II does neither (and doesn’t last long). Type III is a
believer but an erratic deliverer and usually gets another chance.
Type IV is the trickiest: He or she delivers short-term results but
does not believe in GE’s values. Instead of living and breathing boun-
daryless values and energizing and exciting people to new heights of
creativity and productivity, this manager controls, oppresses, intim-
idates, and squeezes people. Welch solved the type IV case by ele-
vating shared values above short-term results, and so these types
don’t last long at GE either.
GE’s system of rewards and recognition glues these managerial
qualities to GE’s values by reinforcing its boundaryless and speed/
stretch culture. Under Welch’s stewardship at GE, the number of
employees eligible for stoc koptions soared from 400 to nearly
30,000. Speakers at big company meetings are selected not by their
title or ran kbut on the basis of “what people know that can be
shared, borrowed, and expanded on.”
Finally, GE’s “360 degree” management appraisal calls for man-
agers to be evaluated not only by their superiors but also by
the people who wor kunder and alongside them. This evaluation
focuses GE’s leaders “on finding and rewarding people who dem-
onstrated an ability to get every mind in the organization into the
relentless search for ideas.”
Fruits of the Culture
Concrete results of the core operating elements implemented
through a strategy of integrated diversity and Work-Out include
those generated at GE’s Crotonville Institute management school
and those originating on shop floors throughout the company. Best
practices has become a model emulated throughout the world and
is a hallmar kof Welch’s GE. Crotonville is a wellspring of thought
on management and business, producing great ideas for decades and