When Jack Welch was named CEO of General Electric, Welch saw a company in trouble even though the business world saw GE as an intrinsically healthy corporation, secure in its position as a world industrial leader. Welch knew that the company was too large to fail yet GE was too unwieldy to adapt for further growth. The changes he instituted restructured and revolutionized GE and made Welch the most respected CEO in business today. After reading the book there were three parts that really stood out for me. Chapter 3: Cultivate managers who share your vision was the most important chapter to me.
It talks about putting the right managers in the right positions. Welch says, “What we are looking for? are leaders? who can energize, excite, and control rather than enervate, depress, and control” (p. 35). Managers in a company should bursting with energy and are able to develop and implement a vision and not just talk about those visions. They must also know how to spread enthusiasm throughout the entire company. One of the keys to being a great business leader is getting employees excited about their work. One of the ways to get employees excited about their work is to allow employees more freedom and responsibility then they have now.
In order to make this happen, middle managers have to be team members and coaches. They need to facilitate more than control. Managers should be energizers and not enervators. Welch suggests that the only way to last at GE is to get on board, to become a team player, and to adapt oneself to the company’s values and culture when describing the different types of managers that will or will not succeed. The first type of manager delivers on commitments and shares the company’s values. The second type does not meet commitments and does not share the company’s values.
The third type misses commitments but does share the company’s values. Welch himself cares more that a manager sticks to the company’s values than meets the numbers. The fourth type delivers on the commitments but does not subscribe to the company’s values. Welch broke these managers into three categories, type A, type B, and type C managers. Type A managers were defined as team players that subscribe to the company’s values. People trust them; they make impacts on decisions, and are leaders who seek to develop high value in other leaders below them.
They were to be kept and promoted. Type B managers make sure that they are productive and can continue to grow. They are to be nurtured in the hope that might improve. Type C managers were to be fired. They were defined as blah and neutral who are afraid of A’s and they do not know they are C’s. In that past restaurant I worked at we used the A, B, C system not only for managers but for all staff as well. Everyone thought it was a bad idea at first but after two months they thought it was useful. We had an unbelievable staff after the system was in place.
I have worked with A, B, and C managers and it can make the workplace frustrating if you do not have the right people in the right places. The second most important chapter to me was Chapter 5: Be simple, be consistent and hammer your message home. This chapter talks about consistency can help get your message across to many people. “The only was to change people’s minds is with consistency,” (p. 51) states Welch who believes in relentless consistency in everything. Since GE’s values are so important to Welch, he had them inscribed and distributed to every single GE employee. He states:
“There isn’t a human being in GE that wouldn’t have the Values Guide with them. In their wallet, in their purse. It means everything and we live it. And we remove people who don’t have those values, even when they post great results” (p. 53). The values on GE’s Value Guide are: GE Leaders? Always with Unyielding Integrity: §Have a Passion for Excellence and Hate Bureaucracy §Are Open to Ideas from Anywhere? and Committed to Work-Out §Live Quality? and Drive Cost and Speed for Competitive Advantage §Have the Self-Confidence to Involve Everyone and Behave in a Boundaryless Fashion §Create a Clear, Simple, Reality-Based Vision?
and Communicate It to All Constituencies §Have Enormous Energy and the Ability to Energize Others §Stretch? Set Aggressive Goals? Reward Progress? Yet Understand Accountability and Commitment §See Change as Opportunity? Not Threat §Have Global Brains? and Build Diverse and Global Teams (p. 53). According to Welch, a business leader is obligated not only to create vision, but also to make sure employees are living that vision at every level of the organization. To Welch, one of the most crucial aspects of being consistent and following up is making sure that he delivers the identical no-nonsense message to everyone.
“You don’t get anywhere if you keep changing your ideas. The only way to change people’s minds is with consistency. Once you get the ideas, you keep refining and improving the; the more simply your idea is defined, the better it is. You communicate, you communicate, and then you communicate some more. Consistency, simplicity, and repetition is what it’s all about? ” (p. 55). As Welch pounded his message home over the years, he won the hearts and minds of the GE workforce and converted critics into believers.
I think consistency is a large part of a company’s foundation that holds everything together. Some managers forget to communicate and consistency is lost about many issues. If managers are consistent with policies and standards then many employees will quit trying to see what they can or cannot get away with. I think that having a manager that upholds and lives the company’s values help the company grow and progress. The company’s value card also helps every employee, at every level, on the same page of what the company is about and helps him or her practice and live the values of the company.
I think that if employees are aware of the company’s values they are more likely to practice and live them. This also helps employees take more pride in their jobs. It helps them believe that by living the company’s values they are making a difference. Chapter 18 was the third most important chapter for me. Entitled, ? Stretch! Reach for the Stars! ‘ chapter 18 talks about making goals within the company and learning how to obtain them. “In a boundaryless organization with a bias for speed, decimal points are a bore” (p. 165). Welch believes in doing the best possible and then reaching beyond.
This is what he calls stretching. This means exceeding goals and figuring out performance targets that are achievable, reasonable, and with GE’s capabilities. “We have found that by reaching for what appears to be impossible, we often actually do the impossible’ and even when we don’t quite make it, we inevitable wind up doing much better that we would have done” (p. 165). Welch insists on asking managers and employees to reach for their dreams. In order to emphasize the importance of stretch Welch pointed out a Japanese executive who used the “bullet-train mentality.
” In order to double the Japanese bullet-train speed, it would be necessary to do far more than refining the engine. Every Aspect of the infrastructure surrounding the bullet-train would have to be looked at and possibly altered. Welch says that you have to think outside the box. Stretching allows people to constantly reach for the goal. People are getting more comfortable with the idea that you get the best out of people by getting people to do the best they can and measuring their progress towards their goal.
As sure as one becomes sure that they are able to obtain their goal, it is time for another stretch. Welch also says that if a team falls short of their goal, you should not punish them for not meeting big targets. Throughout the company, stretch targets are making seemingly impossible goals exciting and bringing out the best from the teams. “In stretching for these “impossible targets, we learn to do things faster than we would have going after “doable” goals, and we have enough confidence now to set new stretch targets” (p. 170).
Welch emphasizes that one should not settle for second best when you are able to achieve more. When you reach for the stars, you may fail but stretching yourself and stretching your business you are going to bring better performance results to your business. He also says to be creative, more imaginative, and more thoughtful about your business. The more you think about how to get more out of your business, the higher your stretch targets and the better off your are going to be. I think that all employers and manager should encourage their employees to reach for the stars.
This will help employees realize what they are capable of doing. Managers need to help employees realize and make goals along with making sure that they meet their goals. I believe that Jack Welch and the GE Way is a great tool for any manager. He Welch helped turn a great company into an even greater company. Many of his ideas can be used in the workplace and in everyday life. His ideas are not complex or complicated to understand. It will just take time to incorporate them into your life or business. When you do, you will realize that even you life or business can be better.