Friday, May 4, 2012

Data About Women in Business . . . And Data in the Eye of the Beholder

Posted by Jeff Lipshaw

Images-1The inimitable Jack Welch, business strategy guru, and generally regarded as one of the great business leaders of the 20th century, has given me a chance to round off a little trilogy of women's issues here at The Legal Whiteboard.  (This is courtesy of John Bussey's "The Business" column in the Wall Street Journal this morning, which my wife, sporting a mischievous grin, shoved in front of me at the breakfast table.)  

Bussey starts his column, which reports Welch's less-than-well-received performance Wednesday before a group of high-powered women executives in New York,  by asking if the former chairman and CEO of General Electric is "a timeless seer or an out-of-touch warhorse."

I find this amusing, because I am a veteran of the leadership and management styles spawned by Welch at GE (see earlier biographical statement), and I am pretty sure the answer is "both."   

What I want to discuss here is not the merits of the issue that seems to have tripped up Welch (i.e., his stubborn refusal to acknowledge that indeed advancement in the business world is different for women than for men), but the source of potential judgment errors that arise from the subjective eye of the beholder.   It's the subject of my summer writing project, and blogging gives me a chance to say it in a different way in a different forum.

The possibility of judgment errors affects everybody, even timeless seers.    The usual suspects (i.e., well-documented heuristics and biases) of behavioral economics, the go-to discipline for explanations of irrationality in the legal academy, don't do the trick here.   Coming to terms with (never curing) the errors is a therapeutic exercise from the inside out, not from the outside in.    

My goal here is (a) to describe briefly what was reported as the clash between the women and Welch at this conference, (b) to talk about the timeless part of the GE philosophy, developed by Welch himself, that was hugely meaningful in my coming to terms with and moderating my lawyerly instincts, and (c) to suggest how even a seer can sound like (or be) an out-of-touch warhorse.

First, what happened?  Jack and Suzy Welch (right) appeared at the "Women in the Economy" Images-2 Forum sponsored by the Wall Street Journal.  If the quotations are correct, Jack articulated the "hero" approach that was typical of the GE culture I knew, and dissed the whole idea that women had to overcome cultural bias.  (My additions in the brackets, but I am positive they are in the correct spirit.)"Over-deliver [on your promises]."  "Performance is it! [and everything else is whining BS]."  "The best women would come to me and say. . .'I'm a star. I want to be compared with the best of your best'" ["i.e., I'm a hero and tough, and control my own destiny, and don't engage in whining BS."]  

Apparently, a number of women in the audience, tough and accomplished nuts themselves (among them, a State Street Bank EVP, a Fortune 500 board member, and Dee Dee Myers, Bill Clinton's former press secretary) begged to differ.  (My wife wondered what Suzy Welch, no shrinking violet herself, was thinking at the time.)

Second, what about Welch's own philosophy at GE was timeless?  As I have recounted before, I got my de facto M.B.A. working as a general counsel and business executive for the better part of twelve years in two different companies led by long-time General Electric veterans who were thoroughly schooled in the General Electric values, systems, methodologies, and culture.  This is going to sound really weird, but I had an epistemological reason for leaving a big law firm partnership and going to work as a corporate general counsel.  

When I was getting recruited by AlliedSignal, which had just hired GE Vice-Chairman Larry Bossidy, I read his message to shareholders in the first annual report issued under his aegis.  I paraphrase, but it said something like, "we'll always need leaders who make the final decisions, but the tyrant in the corner office, the guy who has all the answers, need not apply here."  To somebody who had been a lawyer for thirteen plus years, who knew in his heart that there were so many times he didn't know the answers, but who was trained nevertheless to act like he knew the answers, this was mind-boggling.

And, indeed, I was not disappointed to find that the GE culture, at least in its idealistic articulations, was about the continuous process of learning, of getting better, of facing and not backing down from reality, of having the courage to do so, and to live the paradox of getting the results by focusing on the process.  Those are timeless insights, and if you doubt they come from Jack Welch, go read Control Your Destiny.

Third, how did it come to this?  I've come to think that nobody is self-deceived quite like the person who is positive that he is the person who is undauntingly facing reality.  The timelessness in the GE vision was that it incorporated both epistemic courage (do what you know is right) and epistemic humility (always learn from what is real, not what you think is real).  The challenge is in executing on the inherent paradox of that vision.  Jack has the epistemic courage to stick to his guns about performance, but not the epistemic humility to understand that just maybe all those smart and tough women have a point.   What is the objective reality, the objective data, and what is in the eye of the beholder?

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