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. Last Updated: 07/27/2016

Welch Points to Beer As Boon to Business

bloombergFormer GE chief Jack Welch
Jack Welch, former CEO of General Electric turned management guru, told a rapt audience of Moscow businesspeople on Monday that the key to running a successful company was leadership, transparency, vision -- and beer.

The straight-talking Welch spent two hours addressing around 120 Russian men and women affiliated with the soon-to-be-opened Skolkovo business school, imparting advice gleaned from 20 years as the head of General Electric, during which time he developed the company into one of the most successful in the United States.

"You gotta be totally transparent," Welch said in response to a question on how companies should relate to analysts. "You gotta tell them your plans."

"You might fool them once, but if you're going to be there for a long time, you'll get in trouble," Welch said. "You cannot over communicate."

Welch's messages resonated in a country whose economy is marked by increasing state control and rampant corruption.

"The more welcoming a country is to foreign investment -- through its resources, its people or its government -- makes it more attractive than one that is not," Welch told reporters after the Skolkovo class.

Knowing how to manage creeping state control over the economy "is the toughest question of the day," Welch said. "It's a balancing act."

"What's the risk-reward equation related to getting lawyers and fighting or working your way through it? There's no one size fits all."

Yet Welch's outlook on Russia appeared upbeat, and he subtly dismissed a question on the role of dissent in the country's withering democracy. He also praised the new global drive of Russian companies, driven by the metals sector.

"Russia, with its incredible wealth right now, the only thing it could do wrong is not use that wealth to expand globally," he said.

Participants in the class, who included Yevroset CEO Yevgeny Chichvarkin and Olga Yeremeyeva, executive director of juice maker Nidan, asked Welch to call upon his personal experience in leading General Electric.

One participant asked Welch what he thought were the best ways, aside from money, to reward performance.

"I hate certificates. I hate plaques. I hate those things," said Welch. "I like money. That is the best motivator, along with job content."

Another key move, Welch said, was celebrating the victories of staff and showing appreciation. "In my early days, I'd bring a keg of beer in every Friday night," he said.

Participants rushed the stage as soon as Welch was done speaking, reaching for autographs and posing for photographs.

Chichvarkin said he found the class "very useful." Notorious for his own off-the-cuff speaking style, Chichvarkin said: "Today, I kept quiet since there was such a giant here."

Welch said he was conducting no private business during his two-day trip to Moscow. He was invited to the city by Troika Dialog chief Ruben Vardanyan, co-founder of Skolkovo, which is due to open its doors outside Moscow in 2009.

The school says it plans to be Russia's first private business school, with hopes to challenge the likes of Harvard and France's INSEAD.