"Winning" is written by Jack Welch and, whether you love him or hate him, the guy has real experience in running a large corporation successfully. This is unlike so many other authors who can be somewhat academic. Welch began his career with the General Electric Company in 1960, and in 1981 became the company's eighth chairman and CEO. During his tenure, GE's market capitalization increased by $400 billion, making it the world's most valuable corporation.
Jack retired in 2001 and he is currently the head of Jack Welch, LLC, where he serves as an advisor to a small group of Fortune 500 CEOs and speaks to businesspeople and students around the world. Overall, "Winning" stresses being positive at many levels, causing companies and individuals to thrive and grow, creating jobs and more opportunities for everyone.. It covers the broad expanse of Jack's business experience. He devotes chapters to everything from mission statements to work-life balance. Jack claims that he set out to write this book to answer the repeated questions he gets at Q&A sessions around the world.
This results in a tome that is timely, well-informed and relevant. Because of the scope of this book, I will try to focus on the sections that I found most relevant to leadership. Mission According to Jack Welch, the words "mission and values" are among the most abstract, overused, and misunderstood terms in business today. However, they are also the most important. In his view, a good mission statement and supporting set of values must never come across as wishy-washy or too academic. He believes they have to be "so real they smack you in the face with their concreteness.
" Your mission statement needs to announce exactly where you are going. There should be no ambiguity. Moreover, he says, a proper mission statement needs to answer one key question: "How do we intend to win in this business? " This question is defining. It requires companies to make choices about people, investments and other resources. The question also forces companies to delineate their strengths and weaknesses in order to assess where they can profitably play in the competitive landscape. Welch recommends that everyone in a company be given an opportunity to have input into its value statement.
Getting full participation when you are formulating a value statement really makes a difference, he says. It gives you more insights and more ideas, and most importantly, at the end of the process you'll have more extensive buy-in. Naturally, an open, participatory process cannot happen overnight. It will take time, and an enormous amount of commitment. But Welch is confident it will be worth it in the end. Candor Next, there is candor or just telling it like it is. Jack believes lack of candor blocks smart ideas, fast action and good people contributing everything they have. When you have candor, everything just operates faster and better.
First you get idea-rich. Second, candor generates speed. Third, candor cuts costs. Put all of its benefits and efficiencies together and you realize you just can't afford not to have candor. Given the advantages of candor, you have to wonder why we don't have more of it. To get candor, you reward it, praise it and talk about it. You make public heroes out of people who demonstrate it. Most of all, you yourself demonstrate it in an exuberant and even exaggerated way - even when you're not the boss. Differentiation Differentiation is probably one of the things which Welch is most noted for at GE.
His 20-70-10 plan has been controversial to say the least. This practice highly rewards the top twenty percent of employees, encourages the middle seventy percent and eliminates the bottom ten percent. By doing this, Welch believes that companies win when companies cultivate the strong and cull the weak. Also he stresses that companies suffer when every business and person is treated equally. To Welch, differentiation is just resource allocation. Along with being the most efficient and most effective way to run a company, differentiation also happens to be the fairest and the kindest.
No one should ever be surprised that they are not performing well and are fired. This is why a company needs candor and honest evaluations. Ultimately, Jack reasons that 20-70-10 makes winners out of everyone. However, differentiation cannot and must not be implemented quickly. At GE, it took about a decade to install the kind of candor and trust that makes differentiation possible. Leadership No matter what the situation, or who your audience is, Welch believes there are a few basic techniques of leadership that will always work in creating a winning company. He refers to these as his eight rules of leadership.
First of all, leaders relentlessly upgrade their team, using every encounter as an opportunity to evaluate, coach, and build self-confidence. They take every opportunity to inject self-confidence into those who have earned it. "So give praise generously," says Welch, and the more specific the better. Second, leaders make sure people not only see the vision, but also live and breathe it too. Welch points out that there were many times where he talked about the company's vision and direction so much in one day that he was completely sick of hearing it himself. But he stuck with it anyway and it paid off.
Third, according to Welch, leaders have to get into everyone's skin, exuding positive energy and optimism. "Unhappy tribes have a tough time winning," Welch says. The job of a leader is to fight negativism, because the right attitude can bring so much more to a company. Fourth, leaders also have to establish trust by giving credit where it's due. They never cheat their own people by stealing an idea and claiming it as theirs. Fifth, leaders have the courage to make unpopular decisions and gut calls. "You're not there to run for office," he jokes. "You're already elected!
" It is the leader's job to decide what is best for the company, even if it means upsetting a few people. Sixth, leaders probe and push with a curiosity that borders on skepticism, making sure their questions are answered with action. The words: "We'll look into it," are an all-too-common business head fake. When nothing gets accomplished, saying, "I told you so" is worthless to the company's bottom line. Seventh, leaders inspire risk taking and learning by setting the example. Jack notes that often companies urge their employees to take risk only to reprimand them when they fail.
Then emphasizes the point, with which I completely agree, that it is ok to take risks and fail as long as you learn from the mistake. Eighth and finally, Leaders celebrate often. Celebrating makes people feel like winners, and encourages positive moral. If the leader does not celebrate a company's accomplishments, no one else will. I completely agree with Jack on this one. All too often companies I have worked for never told employees the company was doing well. There were no pats on the back or other praise when sales soared. The only thing you heard a lot about was when you made a mistake or sales were down.
Hiring Jack says that hiring good people is hard and hiring great people is brutally hard. Nothing matters more in winning than getting the right people on the field. To Welch, applicants should have to pass through three screens. The first test is for integrity. People with integrity tell the truth, and they keep their word. They take responsibility for past actions, admit mistakes, and fix them. The second test is for intelligence. The candidate has a strong dose of intellectual curiosity, with a breadth of knowledge to work with or lead other smart people in today's complex world.
The third ticket to the game is maturity. Mature individuals can withstand heat, handle stress and setbacks, and alternatively - when those moments arise - enjoy success with equal parts of joy and humility. Change Welch believes change is a critical part of business. Companies need to change often, preferably before companies have to. Most people hate it. They love familiarity and patterns, and cling to them. But attributing a behavior to human nature doesn't mean companies have to be controlled by it. Instead, it comes down to embracing four practices: 1.
Attach every change initiative to a clear purpose or goal. Change for change's sake is stupid and enervating. 2. Hire and promote only true believers and get-on-with-it types. 3. Remove the resisters, even if their performance is satisfactory. 4. Look at car wrecks. Although most of these practices seem pretty clear, I was sketchy about two parts of the list: the "true-believers" and what Jack meant by "car wrecks. " True-believers are the real change agents that know how to make change happen and love every second of the process.
Car wrecks are those terrible tragedies like stock market collapses, bankruptcies or debacles like Enron. Often companies just stand and stare at these occurrences like a car wreck instead of seizing the opportunities that they create. Crisis Management As long as companies are made up of human beings, there will be mistakes, controversies and blowups. The cold truth, Welch tells us, is that some degree of unwanted and unacceptable behavior is inevitable. He thinks that companies can be proactive in preventing some crisis in three main ways: tight controls, good internal processes and a culture of integrity.
Strategy In real life, strategy is actually very straightforward. Companies pick a general direction and implement as much as they can. Strategy means making clear-cut choices about how to compete. Welch stresses that companies cannot be everything to everyone. When developing a strategy, Jack recommends three basic steps: 1. Come up with a "big aha" for your business. This is a broad idea that's smart, realistic and able to deliver a sustainable competitive advantage. 2. Put the right people in the right jobs to drive the "big aha" forward. 3.
Relentlessly seek out best practices to achieve your "big aha," from inside and outside your company then adapt them, and continually improve them. To figure out the "big aha," Welch says that a management team needs to thoroughly debate, grapple with, and finally answer a series of tactical questions. These include: Then, when these questions are answered, it is important to hire the right people and implement quickly. Welch stresses the fact that too many companies agonize over strategy too long. That is where the competition can get ahead.
Six Sigmab Welch is a big fan of Six Sigma, the quality improvement program that GE adopted from Motorola in 1995. He thinks nothing compares to its effectiveness when it comes to improving a company's operational efficiency, raising its productivity and lowering its costs. Six Sigma has two primary applications. First, it can be used to remove the variation in routine, relatively simple, repetitive tasks. And second, it can be used to make sure large, complex projects go right the first time. This will improve the customer's experiences by eliminating unpleasant surprises and broken promises, and overall save time and money.
Work-Life Balance Although Jack admits he is the worst example of work-life balance, he defines it as how people manage their lives and allocate their time. According to Welch, work-life balance can be conceptualized in terms of trade-offs: the little deals you make with yourself about what you want to keep, and what you are prepared to give up. Then it's about living with the consequences. Welch freely admits that he's no expert on just how individuals should prioritize the various parts of their lives, and has always felt that choice is deeply personal anyway.
But, as a line manager, he has dealt with dozens of work-life balance situations and dilemmas, and witnessed hundreds more as a senior manager of managers. Based on all these experiences, Welch believes he has a good sense of how most managers think about work-life balance. The basic reality is that the boss's top priority is competitiveness. Of course he wants his employees to be happy, but only inasmuch as it helps the company win. In fact, if he's doing his job right, he is making people's jobs so exciting that their personal life becomes a less compelling draw. Most bosses are therefore willing to accommodate work-life balance requirements if an employee has earned it with performance.
The key word here is "if. " Bosses know that the work-life policies in the company brochure are mainly window dressing, and that real work-life arrangements are negotiated one-on-one in the context of a supportive culture, not in the context of company policy. With that in mind, Welch urges managers to keep their heads in whatever game they are in and stay focused on where they are and whom they are with. In other words, they need to compartmentalize their work and home problems into two different bins. That said, Welch also challenges those that have the mettle to say no to their bosses once in a while.
Ultimately, they will respect it. Above all, he says, we need to make sure our work-life plan doesn't leave us out of the equation. Each of us is ultimately responsible for maintaining a proper personal balance. Conclusion Arguably more so than any top business leader today, Jack Welch knows what it takes to win. During his forty-year career at General Electric, he led the company to year-after-year success, in multiple markets, often against brutal competition. His candid style of management still remains the gold standard in American business, with his relentless focus on people, teamwork, and profits.
Based on his own career progression, Welch knows that winners can come from anywhere within an organization. That's why "Winning" speaks to business people at every level, in companies large and small. He believes in helping every single person with ambition in their eyes and desire running through their veins, which includes everyone from front-line workers, to first-time entrepreneurs, to senior executives in large organizations. Welch wants to answer the questions that everyone needs answered, and to Jack Welch, all that really matters is a positive mindset and a passion for success. As long as you have that, the rest will fall into place.