The Real-Life MBA: Jack and Suzy Welch discuss their latest book on campus

One of Jack and Suzy Welch’s daughters recently had a broken iPhone. They accompanied her to a local Apple Store where one of the tech “geniuses” got to work fixing it.

While Jack, Suzy, and their 23-year-old daughter waited, the couple couldn’t resist grilling the manager, who wasn’t much older than their daughter. Jack Welch, former chairman and CEO of General Electric Co., was amazed by how the Apple employee, who didn’t have specialized technical training, could lead such a technical team.

“I said, ‘How the hell do you manage these problems?’” said Welch.

The manager told him that he’s concerned with only two things: how engaged his employees are and if his customers are smiling once they get their repaired gadgets back. He didn’t need to understand the technology.

That answer thrilled the Welches, whose latest book, The Real-Life MBA: Your No-BS Guide to Winning the Game, Building a Team, and Growing Your Career, offers management and life lessons. The pair discussed the book and answered questions on campus at MIT Sloan’s Dean’s Innovative Leader Series on April 22. As in the book, the couple’s talk was conversational, breezy, and not without occasional teasing.

In one chapter, the Welches discuss how to manage several types of employees in the workforce today: those with specialized expertise, contract or remote workers, and those who, perhaps based on past experience, are worried or stressed about their jobs.

“It used to be that when you got to be a manager, you had done the work of everybody underneath you,” said Suzy Welch. “When I was made the editor of the Harvard Business Review, I had done the work of every single person who reported to me. But these days … there are CEOs who are managing thousands of coders, and they aren’t coders.”

Other workers, she continued, are scared. “They have seen their jobs disappear and they have seen industries collapse … your job as a manager is not just to acknowledge that, but to talk about it … and do what you can to conquer that fear.”

Jack Welch agreed, and told the audience that fear is an “enormous problem that you will manage all your lives,” and that leaders ought to have a “big dose of paranoia.” Once known in the media as “Neutron Jack” for cutting thousands of jobs at GE, Welch said employees should always know where they stand in an organization. A bad performance review should never be a surprise, and if someone does need to leave, that departure should be handled swiftly and with dignity, he said.

“Hiring is the toughest thing in the world,” he said. One of the biggest errors young managers make, he added, is covering up a hiring mistake because they think it’s embarrassing. “You’ll get more credit if you go to your boss and admit [the mistake]. Then, your job is to treat that person with dignity on the way out. Love them on the way out as much as you loved them on the way in. You owe them that … be generous and be decent.”

Building trust and promoting a culture of alignment is particularly important in startups, said Jack Welch in answering a student’s question.

“It’s absolutely critical,” he said. “You have to get it right. You don’t have a big fat resource to draw from. If you have five people, you have got to have all five people operating on all cylinders. These five people have to be engaged and passionate, and you have to use every technique there is to keep them growing and thinking.”

Welch also told future leaders to keep startups and organizations as non-hierarchal as possible. “You need to stay flat, flat, flat,” he insisted. “The problem in bureaucracies comes from layers. Layers are evil.”

Dean David Schmittlein, who moderated the talk, asked Welch, who has participated in the speaker series on several previous occasions and who taught a class at MIT Sloan several years ago, why he keeps returning to MIT.

“I love MIT. I love the education here, I love the entrepreneurship here, and I love the diversity here, and I don’t say that everywhere else, so I’m telling you the truth,” he said.

Today, Jack Welch is executive chairman of the Jack Welch Management Institute, an accredited online MBA program. Suzy Welch serves on the advisory board.