Winning,
by Jack Welch
A Money
Book Summary
Winning ,
by Jack Welch (with Suzy Welch), 372 pp.
Fortune called Jack
Welch "manager of the century." Businessweek called him
"an icon of American business." Warren Buffett says of Winning:
"No other management book will ever be needed."
That's some hefty praise from high
places. Several reasons the book is so great.
First, it's based
on stuff that's been applied in the trenches. Welch worked for GE
forty years, climbing his way through the ranks until he led as chairman and CEO. Under his
leadership, the corporate giant surged forward in both profits and global
dominance.
Second, it's written clearly and simply, no MBA required.
Each chapter is organized for optimum retention: "Tell them what
you're gonna tell them. Tell them. Tell them what you told them."
Third, it's contagiously exciting. This guy
loves to win and shows the rest of us how he and a multitude of others
have won.
Fourth,
it's not filled with "the same old stuff". Even the
principles you've heard before are presented through his own interesting
experiences.
Fifth, Welch traveled
the world in his retirement, doing over 150 question and answer sessions
with groups of thirty to five thousand. Attendees could blast him with any
questions they wanted to. This gave him time to sift through what he
learned in a lifetime of experience, reflect on what worked, and put
solutions in succinct and memorable ways. In his mind, all the questions
were all basically about how to win. Thanks, Jack Welch, for putting your
answers in a book.
Here are some of my takeaways:
1. Competition is fun!
Enjoy it!
2. Mission and Values
How do you plan on winning at this
business? Answer that question, and you have your mission.
Values are the behaviors you plan
to exhibit in achieving your mission.
In order to make your mission and values
actually impact your organization, you've got to reward those who
practice them and punish those who don't. Many people were fired from GE
because they didn't fit with GE's mission and values. (pp. 20,21)
Favorite Quote:
"...integrity
is just a ticket to the game. If you don't have it in your bones, you
shouldn't be allowed on the field." (p. 14)
3. Candor
In order to get ahead, you need great
ideas - lots of great ideas. To get the best ideas, turn your
business into an idea machine. Nurture a constant flow of ideas from
every level of your organization - not just your top managers. The only
way to foster such idea-sharing is to develop a culture of candor, where
people aren't afraid to speak their minds. Reward them for their candor,
even if it makes themselves and others - yes, you - look
bad.
Favorite Quote:
"...I would
call lack of candor the biggest dirty little secret in business."
(p. 25)
4.
Differentiation
In professional sports,
athletes who perform best are rewarded lavishly. Those who don't play
well are paid the minimum salary and eventually fired. Businesses
should operate the same way. It may seem cruel and Darwinian, but
in the long run, people are happier doing what they're good at. If
they're not excelling, you're ultimately doing them a favor by moving
them out of an environment where they know they're a drag on the
organization. They'd be happier some place else.
5.
Work-Outs
The problem: management gets
ideas from only a few vocal people. The vast majority are either scared
to speak up or feel they have no right to speak up because they haven't
been asked. A "Work-Out" is a way to get these untapped ideas
flowing.
Groups of thirty to a
hundred gather, led by an outside facilitator. The boss shows up at the
beginning, explaining what they will be doing and promising that he/she
will give "an on-the-spot yes or no to 75 % of the
recommendations" and to "resolve the remaining 25 percent
within thirty days." Then, the boss disappears in order to not
stifle discussion, leaving the meeting in the hands in the facilitator.
The boss returns at the end of the meeting to hear the recommendations
and make decisions. "...Work-Outs led to an explosion in
productivity. They brought every brain into the game." (p.
56)
Favorite Quote:
"For
twenty-five years, you paid for my hands when you could have had my
brain as well - for nothing." (A middle-aged appliance worker at
a Work-Out) (p. 56)
6.
Leadership
Welch lays out eight rules
of leadership which always worked.
Rule #1 -
Relentlessly upgrade your team. In every encounter with them,
"evaluate, coach, and build self-confidence."
Rule #2 - Instill the
vision.
Rule #3 - Spread
energy and optimism.
Rule #4 - Establish
trust by being candid, transparent and giving credit where it's due.
Rule #5 - Make the
unpopular decisions.
Rule #6 - Probe and
push. Make sure your "questions are answered with action."
Rule #7 - Inspire
risk-taking and learning by doing both yourself.
Rule #8 -
Celebrate!
When Welch speaks to groups,
he often asks the question, "Do you celebrate enough?" The
response? "...almost no one raises a hand." (p. 78)
7. Hiring
First, candidates should pass
three screens:
Screen
#1: Do they have integrity - telling the truth and keeping
their word.
Screen
#2: Are they intelligent - having enough curiosity and
"breadth of knowledge" to lead other smart people.
Screen
#3: Are they mature - able to
handle stress and setbacks, respect other's emotions, be confident
without being arrogant and have a sense of humor.
Second, look for four E's
and a P.
Positive
Energy
- thriving on action, relishing change, making friends easily, loving
work, play and life.
Can
Energize
Others - "It takes a deep
knowledge of your business and strong persuasion skills...."
Has Edge
- the ability to make tough decisions, even when all the information
isn't in.
Can Execute
- to take the decision and make it happen, overcoming all
obstacles to complete the task.
Passion
- They're excited about their work, learning and growing, and
helping those around them win.
On hiring a
senior level leader. Four additional traits:
Authenticity
- bold and decisive, yet real and likeable - not phony, not playing a
part that's not them.
"The
ability to see around corners" - a visionary who can see the
future and anticipate what most don't expect.
A knack
for surrounding themselves with people smarter than themselves.
"Heavy-Duty
Resilience" - someone who's been knocked down and beat up
badly, but bounced back to run even harder.
The number
one question to probe in an interview:
"...why
the candidate left his previous job, and the one before that."
This "tells you more about them than almost any other piece of
data." (p. 96)
8. Managing
People
1. Give HR
(Human Resources) "power and primacy." Who are the best HR
types? "Pastors and parents in the same package."
2.
Rigorously evaluate with a proven system.
3. Motivate
and retain with money, recognition and training.
4. Confront
difficult people issues, from trouble-makers to big-headed stars, with
candor and action.
5. Spend
half of your time evaluating and coaching the middle 70 percent - those
who are neither disrupting nor shining.
6. Have as
flat an organizational chart as possible. The more layers, the more
vices. Everyone should be crystal clear on who they report to and what
their responsibilities are.
9. On
Firing and Layoffs
Abide by two
controlling principles:
1 -
Nobody should be surprised when they are let go. Employees should
be informed enough about the nature of their business that they
understand who might be laid off in an economic downturn or change in
the industry. If they aren't performing well, they should be
well aware of this through regular formal and informal reviews. If
they can't improve, they should know they will have to move on.
2 -
Minimize the humiliation. Encourage him that there's a better job
out there for him, better matched to his temperament and skills. Help
him move toward that next job.
10. Deal
With Change
In
this era of change, you change or die. Here's how to make change more
palatable.
1. Make
sure everyone in your company knows why you're changing.
2. Hire
and promote only those who deal well with change. Many will call
themselves "change agents," but you know the real deal when
you discover someone who reacts fearlessly in the face of the
unknown.
3. Get rid
of those who resist change.
4. Seize
opportunities, even if they're brought about by someone's misfortune.
Buy real estate when prices plummet. Be there when a company fails, to
see if pieces can be bought up at a bargain price. Purchase undervalued companies in a
country that's going through recession. It takes a strong stomach to
ignore the nay sayers; but it can lead to great profits.
11. Crisis
Management
To handle a
crisis, make the following assumptions:
-
It's
worse than you first imagined.
-
Everyone
will eventually find out everything.
-
The
media will portray you in the worst possible light.
-
As a
result, processes and people must change. Blood will be on the
floor.
-
You
will survive, smarter and stronger.
12.
Strategy
"In
real life, strategy is actually very straightforward. You pick a general
direction and implement like hell." (p. 165)
"If you
want to win, when it comes to strategy, ponder less and do more."
(p. 166)
First,
come up with a "Big Aha" - a way to gain a
"sustainable competitive advantage." It's an idea, an insight
on how to win. It could be developing a new product, or making an old
product unique.
Second,
put together the team that can make it happen.
Third,
"relentlessly seek out" the best ways to achieve your
"Big Aha," leaving no stone unturned. Look both inside and
outside of your company. Be "boundaryless," having "an
obsession with finding a better way - or a better idea - whether its
source is a colleague, another GE business, or another company across
the street or on the other side of the globe." (p. 185) Adopt,
adapt and continually improve upon them. Exhibit an "unyielding
emphasis on continual improvement." (p. 167)
14.
Budgeting
"...the
budgeting process at most companies has to be the most ineffective
practice in management." (p. 189)
Traditionally,
companies either budget with a negotiated settlement or a phony
smile.
In the negotiated
settlement, a business or division comes to the senior
management complaining about barriers to growth and say they'll be doing
well to beat 6 percent growth next year. The management thinks
more optimistically and argues that they can deliver 12 percent. They
wrangle for awhile and finally settle on a goal of 9%. All act
disappointed with their compromises at the meeting but go home giving
high fives that they got what they wanted: management can get enough
growth from the division to look decent and the division heads feel they
can easily meet or surpass their goals and get their bonuses.
In phony
smile budgeting, the division heads come to the senior
management with grand plans, asking for the money to pull off the dreams
they feel they can make happen. Management asks some questions and
shakes hands smiling, but later gives the word that they can only afford
to give them one half what they ask for. Demoralized, the division
leaders divvy up the money a little here and a little there, rather than
put it where it could be used for the biggest gains.
Welch took
GE from those types of budgets to budgets that answer two questions:
"How
can we beat last year's performance?"
"What
is our competition doing, and how can we beat them?"
Look at
obstacles and opportunities in the real world. Allocating resources
becomes more of an operating plan than a budget. You might need to
reallocate resources mid-way through the year because of new
opportunities or new competition. One division might be rewarded for
growing at only 6% but beating the competition in a difficult
environment, whereas another division grew by 15%, but may not get
rewarded as much since they didn't take full advantage of a growth
opportunity. This encourages divisions to set "stretch goals"
rather than be limited to "meeting their budgeted
goals."
15.
Start-Ups
First,
put your best people at the helm and give them plenty of resources to
make it happen.
Second,
encourage it with much fanfare from the top.
Third, get
off their backs and give them the freedom to make their own
decisions.
16. Mergers
and Acquisitions
During his
career at GE, Welch was involved with over one thousand mergers and
acquisitions. Here he warns of seven pitfalls to avoid.
17.
Quality Improvement
GE adopted
the quality improvement program Six Sigma in 1995. He believes that it
is tops in improving efficiency and productivity, lowering costs,
reducing defects, building customer loyalty and building great leaders.
16. Find the Right Job
"Every time I ask
successful people about their first few jobs, the immediate reaction is
almost always laughter." p. 255
First, get a job
and learn something about yourself. What do you like or dislike about
it? What are you good at and bad at?
Second, get
another job that's more in line with the strengths and desires you
discovered in your last job.
Third, repeat the
process until you find yourself in a job you love.
Even then, there will be
trade-offs. Maybe there's a person you have to work around that you don't
like. Perhaps the boss has irritating quirks. Don't expect to find an
absolutely perfect job in an imperfect world.
Here are some signals to
look for when you're exploring a potential job:
Signal #1: You
like the people there - they're your type.
Signal #2:
You'll get the opportunity to learn and grow.
Signal #3: You'll
get credentials that will help you move forward in a healthy industry.
Signal #4: It's
your own decision - not something your parents or spouse are pushing you
into.
Signal #5:
The work itself is fun, meaningful and rewarding.
Random advice on finding
a job:
If you're looking for a
new job, don't quit your old one. People would much rather hire a person
who's presently working. And while you're working, work hard.
"Nothing will get you a new job faster than terrific performance in
your old one." (p. 271)
17. How to Get Promoted.
Do more than you're
asked. Perform beyond all expectations. If you can, expand your job in
such a way that your boss and colleagues all look better.
Manage those below you in
such a way that when they're asked about you, they'll say that you are
fair, you care and you were willing to show tough love.
Help the leadership to
champion new initiatives.
Find the right mentors.
Some may be mentors for weeks, others for years. Some may be older,
others younger. Some bosses, some subordinates. Welch had dozens of
informal mentors throughout his career.
Learn from the business
media. Welch learned tons about business throughout his career by
devouring every business magazine and newspaper he could get his hands
on.
Be positive and fun, not
a negative bore.
Don't buck the company
values.
18. How to Deal With a
Bad Boss
Ask yourself why he's
acting like a jerk. For example, is he a jerk to everyone, or just to
me?
Most workers overrate
their job performance and how well-liked they are among colleagues.
Look honestly and objectively at your own attitudes and performance for
clues.
Meet privately with your
boss to ask him frankly what is wrong. If something surfaces, commit
yourself to a plan for improvement.
Nine out of ten times,
complaining to the boss's boss will only hurt you.
If the boss will be
around for the foreseeable future, ask yourself, "Is it worth
it?" If not, seek employment elsewhere. If you stay, you forfeit
the right to complain. You're there by choice.
19. On Balancing Life
and Career
Your boss may be
concerned about your personal life, but he's also concerned about the
company winning in a competitive work environment.
Your strong performance
at work should grant you a hearing when you ask for accommodations
related to your life outside of work.
Hints:
1. Compartmentalize
your life. When you're home, be 100% at home. When you're at work, be
100% at work.
2. Once you've set your
life priorities, get comfortable saying "no" to things that
would take away from those priorities.
3. Don't leave yourself
out of your priorities.
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