How One CEO Broke Capitalism—and How We Can Fix It

BY Emily Nonko | July 04, 2022

In his role as the Corner Office columnist for the New York Times from 2018 to 2022, David Gelles interviewed hundreds of CEOs. In those interviews, one name consistently came up: Jack Welch, who served as chairman and CEO of General Electric between 1981 and 2001.

“They would bring up his name unprompted, sometimes as an example of everything they thought was wrong with the economy, and that alone was telling because it suggested he was a reference point for people trying to create a different kind of economy,” Gelles said in a fireside chat at From Day One’s May conference in Brooklyn, where he spoke with fellow Times reporter Emma Goldberg about his new book, The Man Who Broke Capitalism: How Jack Welch Gutted the Heartland and Crushed the Soul of Corporate America–and How to Undo His Legacy.

If that title sounds epic, so has been the rise and fall of Welch’s standing as a corporate role model. Back in 1999, Fortune magazine named him “Manager of the Century,” explaining, “Welch wins the title because in addition to his transformation of GE, he has made himself far and away the most influential manager of his generation.”

In his book, Gelles explains how this came to pass. Welch produced uncanny financial results, which held Wall Street in thrall. “When Welch took over, GE was worth $14 billion. Two decades later, the company was wroth $600 billion–the most valuable company in the world,” Gelles writes. “All that material success obscured darker truths. Welch was not, as he would have liked us to believe, a patrician steward of sound business judgment and good character. ... Rather, he was hungry for power and thirsty for money, an ideological revolutionary who focused on maximizing profits at the expense of all else.”

Gelles was interviewed at the conference by Emma Goldberg, who reports on the future of work for the New York Times

Before Welch came along, that wasn’t the prevailing ethos, either at GE or Corporate America in general. While capitalism before Welch was hardly equitable, it was a very different ballgame than the one played today in terms of winners and losers. “If you look at a GE annual report from 1953, they proudly talked about how much money they were paying their workers. It was a good thing. The more money they paid their workers, the better,” Gelles said in the fireside chat. “They talked about how they were investing in their communities, and trying to make the cities where they operated their factories better, more wholesome places. And they even talked about how much money they were paying the government. They were proud to pay their taxes.”

Welch introduced different tactics that would completely reshape GE and the rest of the American economy, a process Gelles called “relentless, ruthless, deliberate.” Welch embraced three core components: massive downsizing, outsourcing and offshoring, and stack ranking of employees, which utilizes bell curves to rate and rank employees based on performance and is used to cull low performers from the workforce.

These tactics are still practiced by corporations today, Gelles pointed out. WeWork relied on stack ranking even as it was raising billions of dollars; Amazon’s Jeff Bezos has sought for “transactional” relationships with warehouse employees; and companies like Chipotle are regularly sued for labor violations. Gelles, who reported extensively on the root causes of the fatal crashes of two Boeing 737 Max jetliners, said they were the result of a corporate culture that prioritized profits over safety.

After the downfall of GE, which was tied heavily to the financial crisis of 2007-08, Welch went on to spread conspiracy theories about President Obama and support President Donald Trump. “Into his retirement, he started essentially being an internet troll,” Gelles said. A seminal moment was both Welch and Trump got behind a 2012 job reports conspiracy.

Even though Welch kicked off a decades-long, strategic dismantling of worker’s rights and well-being, Gelles believes that capitalism can still be saved. “Creating an alternative that’s viable and still allows companies to thrive and prosper and be profitable–because I’m a capitalist too–is going to take a long time. We are, though, at this moment where something seems to be shifting in the ethos of business,” he told the crowd.

The last chapter of his book outlines what could come next: a commitment and actual action from business leaders to take care of workers, communities and the environment, as well as legislation designed for a more equitable economy. Gelles takes hope in a culture shift that’s beginning to acknowledge that Welch’s idea of capitalism isn’t sustainable: “It’s been a shift in tone and messaging that is long overdue, of course, but we didn’t even see ten years ago.”

Emily Nonko is a freelance journalist based in Brooklyn, NY. In addition to writing for From Day One, her work has been published in Next City, the Wall Street Journal, the Guardian and other publications. 

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How Your Workforce’s Culture Directly Affects Your Consumer’s Experience

Build a workplace culture that empowers employees, and in turn, you’ll elevate customer service. That’s the key takeaway from a discussion with Ash Hanson, EVP and chief HR officer of AmeriHealth Caritas. She spoke during a fireside chat at From Day One’s Philadelphia conference. Stephen Koepp, editor in chief and co-founder of From Day One moderated.But how exactly do you build a workplace culture that empowers employees? Hanson offered several main points.Treat Employees Like ShareholdersAs stewards of human capital, HR leaders play a pivotal role in an organization’s success, according to Hanson. The pandemic certainly brought that fact into focus. “When you fully leverage the potential of your human capital, it truly makes a difference between the performance of a company from being good to being great,” she said. At AmeriHealth Caritas, a managed care organization serving Medicaid, Medicare, CHIP, and Health Insurance Marketplace members across 13 states, employees aren’t just fulfilling tasks—they are living the organization’s mission every day. With over 9,000 associates, the company manages care for millions of Americans, often in times of critical need. “Our mission is not just something on paper,” Hanson said. The organization’s structure enables team members to view their work as essential to clients’ well-being, creating a culture in which employees feel accountable and aligned with the company’s goals. This approach connects employees to the organization’s outcomes, inspiring them to perform at their best.As Hanson says, treat your employees like shareholders. Invite them into the conversation. Their quarterly virtual town halls are well attended, and leaders spend time talking about not just what’s happening in the company, but within the competitive marketplace.Ash Hanson, EVP and CHRO of AmeriHealth Caritas, spoke during the fireside chatWhat other discussions would you have with shareholders? A mission statement is one key focus. At healthcare companies like AmeriHealth Caritas, the mission is to help people get care, stay well, and build healthy communities.“We really take care of over 4 million of the most disadvantaged Americans, very often at the time of their most critical need,” Hanson said. “This is an organization where every single employee lives the mission every single day.” That purpose helps drive employee culture, which in turn elevates customer experience. Along with that is ensuring team members have the proper training to get the job done well. While technology is useful, she added, an employee’s expertise and human care can’t be replaced or undervalued. “We spend and invest a lot of time upskilling our associates and making sure that they are ready and prepared to be responsive to member needs.”Finally, being transparent must be woven into everything you do, Hanson says. The more open and honest leaders are, the more open and confident employees can be. Holistic Employee BenefitsThere’s the expected medical and retirement benefits many companies offer. And then there are benefits that look at the whole employee. What do employees need and want? The more companies can offer these to their people, the greater the company culture. Physical needs are important, but leaders should also pay attention to employees’ emotional needs and financial needs. “Coming out of the pandemic, we implemented Lyra because we had a lot of employees talk about how they couldn’t find therapists for either their own needs or for their children,” Hanson said. “We implemented a program which offers 12 free counseling sessions, not just for our employees, but for their families as well.”The company has a state-of-the-art gym on site, but those working elsewhere have access to fitness apps to help them with fitness, plus nutrition and even sleep. A well-rounded, happy employee is better able to show up for work in a way that helps the employee and customers. As far as financial well-being, the company provides education on preparing for the future. Hanson emphasized the impact of authentic employee recognition, stating that recognition is integral to promoting engagement and reducing feelings of isolation. Their social recognition platform allows team members to acknowledge each other’s efforts, creating an authentic culture of support and mutual appreciation. This culture of holistic care and recognition has a direct effect on employee satisfaction and productivity, leading to improved service quality for clients.Balance Conviction with CuriosityOne core HR strategy is balancing conviction with curiosity, Hanson says. HR professionals are often sought after for their expertise, yet cultivating curiosity is essential to inspire innovation and creative problem-solving. Hanson suggested that HR leaders stay curious. “Curiosity opens up opportunities for creative, new ideas. It's a place where inspiration comes from. It's a place where innovation comes from,” she said. And especially as the needs of employees continue to change, HR leaders must continually stay ahead and change with them.By following these points, leaders can start to build a company culture that enhances both employee and customer satisfaction. By treating employees as stakeholders, supporting holistic well-being, and fostering a culture of curiosity, organizations can strengthen their workforce’s commitment to service excellence, benefiting customers in the process.Carrie Snider is a Phoenix-based journalist and marketing copywriter.

Carrie Snider | November 22, 2024

Boosting Retention and Productivity Through Workforce Agility

Today’s talent has a lot of choices. Which means companies must build adaptable and agile workforces to drive both retention and productivity. This approach goes beyond standard policies, recognizing the distinct career aspirations and evolving expectations of workers across a diverse range of roles.In a recent panel discussion at From Day One’s Denver’s conference, moderated by Erica Breunlin of the Colorado Sun, industry leaders shared insights into strategies that empower employees, close skills gaps, and foster flexibility. Their insights highlight a shift toward greater workforce transparency, mentorship, and the restructuring of traditional work expectations.In a recent survey of employees at Randstad RiseSmart, they asked: Is it easier for you to find a job within the company or outside the company? Forty-five percent said it was easier to find a job outside the company.“We then asked corporate recruiters the same question,” said panelist Chris Harrington, SVP, sales and customer success at Randstad RiseSmart. “55% of them said from outside the company, like they know the secret’s out.”For many, being a gig or contract worker has become easier and more attractive, he says. And it’s not just IT workers or other similar industries. A Fortune 100 CEO recently told Harrington that when trying to hire a CIO, the candidate asked if they could be a contractor rather than an employee.“Employees and the employers together are realizing that there’s a huge gap,” Harrington said. “Employees have a lot of choices, candidly, and so the choice has really exploded.”When there’s a lot of choice, employees will go where they get the most flexibility. Some will go towards remote work, meaning those who mandate back-to-office days could be shrinking their talent pool. Others will be attracted to career potential within the company.Employers should be very thoughtful about how they approach these types of decisions. Ultimately, it comes down to transparency, he said.Executive panelists spoke about "Boosting Retention and Productivity Through Workforce Agility" at From Day One's Denver conference“I don’t think as employers, we're doing a great job being transparent with our employees around what their own opportunities are, let alone how we go out to the external market and start to market,” Harrington said. “There’s an entire generation of workers that are coming into the workforce looking for a diverse set of experiences. We can do that, and I think we need to get a little bit smarter around it and figure out how to better market it to the employee base.Closing the GapsThere are three distinct gaps with this workforce–a skills gap, an expectations gap, and a visibility gap, says panelist Erick Allen, principal at Cornerstone.“There’s data that says one in three employees don’t feel they have the skills to do the job that they’re currently employed in. Just think about that,” Allen said. There’s a huge opportunity for organizations to close the skills gap by paying attention to those, then offer learning opportunities and mentorship.Second is the expectations gap. In a Cornerstone survey, 49% of employees felt that their employers were doing a poor job at either upskilling or reskilling. “Yet 89% of executives felt they were doing a great job,” he added. That’s a huge gap between employees and leaders that needs to be closed by offering opportunities for upskilling.Third, there is a visibility gap. The hiring process typically involves a narrow set of skills in order to land the job. But what after? What other skills do they have and how can the company best utilize them?“We have done ourselves in disservice with applicant tracking systems in relation to skills visibility,” Allen said. “Once you get someone in, allow them to open up, and you will find out they have skills and abilities and things that they can do far outside of what they did.”Allen says that the Great Resignation of 2023, when 27% of the workforce voluntarily shifted jobs, hasn’t slowed down. Retention relies on closing major gaps and giving workers opportunities and flexibility.MentorshipRetention becomes significantly more challenging in large organizations, where a lack of personalization and difficulty scaling effectively can disengage employees. People don’t want to feel like just another face in the crowd.“Every employee is very unique and individual in the path that they want to pursue,” said panelist Elizabeth Bruns, director of business HR and global business group HR lead of Avanade. “Careers are no longer linear, so the career journey is going to be very much driven by that particular employee.”Not only that, but rapidly evolving technology means careers can change quickly, and companies should offer ways for them to gain skills. At Avanade, they’ve offered a Microsoft certification program that is constantly evolving with new technology. Plus, they developed an AI school so employees could learn more.Perhaps the biggest impact they’ve seen, though, is from a more one-on-one approach: career advisors. “The idea of a career advisor is they’re like your guiding light for your career journey,” she said. A project manager is the day-to-day work focus, but a career advisor is like a mentor for your career goals.“They can help aggregate performance feedback that you may have received, provide you with that developmental feedback, help you identify the specific paths that you might want to pursue from a development learning perspective, or just be a separate party that the person can talk to,” Bruns said.The personalization piece helps drive it home. Because in an organization with thousands, employees are getting the specific direction they need to have confidence in their current role and possible roles to come. Flexibility for the FrontlineWorkers want flexibility, but how does a company accomplish that for the non-remote worker? According to panelist Kristen Baller, head of talent acquisition at DISH Network, more than 60% of the workforce is blue collar, performing jobs that involve physical labor.“I would encourage us to really start to think about how we are talking to our leaders, to think not just about remote work, but flexibility,” she said. “How are we starting to think about the hours? Are we able to start to create shifts that align more with the school schedule, or start to thin through four day four day work weeks?”It becomes more complicated when you’re talking about large organizations with lots of people and factors to consider. As with any job, no matter whether they’re remote or frontline, keeping track of skills is paramount. 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Carrie Snider | November 21, 2024

Focusing on Well-Being to Evolve Your Employee Value Proposition

An employee’s well-being is closely tied to their work environment, and employers must take ownership to support it. “Our job as HR professionals and as leaders is to return them to their loved ones in at least as good a position, if not a better position, than they were when they came to the company,” said Kenneth Smith, vice president of human resources at Vail Resorts.Smith joined four other executive panelists during a session about “Focusing on Well-Being to Evolve Your Employee Value Proposition,” moderated by journalist Cynthia Barnes. Getting the right perspective is everything, Smith says. Leadership must begin by understanding and connecting with team members on a personal level—because well-being is personal. “One of the most critical components of well-being is empathy, and I think that it’s important for us as leaders to understand our people, and that is a pathway to empathy which only comes from really paying attention to them and noticing them,” he said. Only then can employers truly focus on what their people need to succeed as people. Vail Resorts has adopted a core strategy, “Explore, Grow, Belong” to emphasize inclusion and belonging, which in turn fuels employee well-being. They also shifted their hiring approach, focusing less on whether employees ski and more on their skills and contributions. Because at some point, everyone is a beginner skier, Smith says. Psychological SafetyAn employee’s well-being in the workplace begins with psychological safety, says Donald Deas, director, HR business partner at the E.W. Scripps Co.“We have a different group of employees that are coming into the workforce now, and providing some psychological safety for them is critical to how we move them through the process of their personal and professional development,” he said.It all starts with onboarding, which Deas says should focus on fitting individuals into the organization’s culture by identifying what is meaningful to them, which fosters a sense of belonging. A company’s value proposition is part of a holistic package of benefits that attracts and retains employees. Beyond the typical medical and retirement benefits, what else can you offer employees? “We have counseling capabilities free for our employees,” Deas said. “We have different activities that keep them physically in shape,” as health is top of mind, he says.Executive panelists spoke about "Focusing on Well-Being to Evolve Your Employee Value Proposition"He also emphasized the need for processes to address unique employee needs while maintaining a fair approach that respects individual circumstances without confusing fairness with equality. Engagement and PurposeRecently, Discover has started having ASL interpreters at town halls and are looking at how they can bring in more neurodiverse people into the organization. It’s part of a bigger effort to help people feel included and engaged at work, says panelist Jill Coln, vice president of talent management, development and culture at Discover Financial Services.“If people are not engaged in the work that they’re doing, then that just starts to degrade their desire to be at the job, their desire to do well,” she said. Engagement goes hand-in-hand with purpose. When an employee doesn’t feel purpose in their position, it’s hard for them to feel value or well-being in the work community, says Coln.With a possible pending acquisition by Capital One on the horizon, the company has had to work harder to answer the questions on their employee's minds. People have been wondering, “What’s going to happen next, if this company buys us? Am I going to have benefits?” she said. “It’s all about communication, communication, communication.” Even if you don’t know details, Coln added, you can let employees know something is coming soon and that they will be kept in the loop.Since the merger, Discover has introduced programs called “Excelling Throughout Transformation” and “Leading Through Ambiguity” to guide leaders and employees through the changes, helping employees focus on what they can control. It helps keep them engaged and offers purpose, even amid changes. Diversity of Mental HealthFostering a healthy work environment requires a physically safe environment and a psychologically safe environment, says panelist Melissa Doman, organizational psychologist and BetterHelp business advisor. But there is another key, and that includes helping employees develop communication skills so they can feel confident in advocating for themselves. “One of the most pivotal things to employee well-being at work is actually giving people the words and the skills to talk about mental well-being at work,” she said. This helps employees gain confidence in advocating for themselves, and helps employers understand the diversity of mental health among employees. “I think a huge miss [in the workplace,] is when you have things like a Wellness Wednesday or something to bring people together, it does not take into account people’s experiences of mental health,” she said. Emphasizing that mental health should go beyond that, Doman added.She referenced David Rock’s SCARF model (Status, Certainty, Autonomy, Relatedness, Fairness), suggesting it as a framework for employers to understand and meet employees’ motivational needs, ultimately enhancing their sense of purpose.Integrating WellnessPanelist Marisa Carson, vice president of talent management and organizational effectiveness at Elevance Health, agreed that employers should dive deeper in order to help address workers’ mental health.She advocates for ongoing, year-round mental health initiatives beyond designated awareness days, encouraging managers to engage daily with their teams, showing empathy and addressing mental health needs“I would encourage all of you to look at that evergreen culture of mental health at work as something that runs parallel to any other form of professional development,” Carson said. “If it is seen as this optional wellness endeavor, people will treat it as such, and it’ll only come up a couple times a year.”Of course, something is better than nothing. Talking about mental health awareness on World Mental Health Day is great. But when mental health support is integrated into the company culture, it’s more effective. “What about all the other days in the year when life is still happening?” she asked. “There needs to be consistent messaging and consistent training.” It’s an ongoing conversation, not a box to check. It’s integral, not words on a website for new hires to hear about once a year. Rather, offer training once a quarter, or whatever makes sense in your organization,” Carson said. One big piece of integrating wellness is utilizing managers, as they are those who are reaching employees every day. So keep managers trained and sensitive to the needs of their people, and companies will see better employee well-being. In today’s evolving work environment, integrating well-being into an employee value proposition is no longer optional, it’s essential. When well-being becomes an everyday priority, companies don’t just improve retention; they cultivate a more resilient, motivated workforce that’s better prepared to face challenges together. Ultimately, it’s about creating a workplace where employees can thrive personally and professionally, benefiting both the people and the organization as a whole.Carrie Snider is a Phoenix-based journalist and marketing copywriter.

Carrie Snider | November 19, 2024