Winning
by Jack Welch, Suzy Welch
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Book Reviews of Winning
Book Review: Outstanding management book
Summary: 5 Stars
This is a book that is a must read for managers who are growing as leaders. I found lots in common with Louis Gerstner's book on 'Who says elephants can't dance?' about leadership in large organisations - Jack Welch at GE and LVG at IBM.
The main points of his book are:
1. Mission statements should not be generic statements that could apply to every company. They should answer one question - How do we intend to win in this business. GEs is being 'the most competitive enterprise in the world by being No 1 or No 2 in every market - fixing, selling or closing every underperforming business. Values similarly need to spec out the required behaviours. Bank One's value on customer first was expanded as follows:
a) Never let profit centre conflicts get in the way of what is right for the customer
b) Give customers a good, fair deal. Do not maximise short term profits at the expense of builing those enduring relationships
c) Always look for ways to make it easier to do business with us
d) Communicate daily with your customers. If they are talking to you they can't be talking to competitors
e) Don't forget to say thank you
Welch also forcibly states that these need to be backed up or they will just become platitudes.
2. Candor brings people into the discussion, generates speed, cuts cost. But very few organisations practice candor
3. Differentiation treatment of stars, the middle and underperformers is vital to keep the best motivated and get rid of the dead wood which is required for a healthy company
4. Get everyone involved. People should not be scared of speaking out in front of their bosses.
5. At the leadership stage it's about developing leaders, leaders get people excited and optimistic, leaders establish trust with candor, transparency and credibility, leaders have the courage to make unpopular decisions and take gut calls, leaders probe and push with curiousity that borders on suspicion, making sure that their questions are answered with action, leaders inspire risk taking by setting an example, leaders celebrate successes.
6. When hiring look for acid tests (integrity, intelligence and maturity) and 4E 1P (positive Energy, ability to Energize others, Edge the ability to make tough decisions, Execution and Passion). For hiring leaders you need to check for authenticity, ability to see around corners, the penchant to surround themselves with people better than themselves and heavy duty resilience. When interviewing look for people who start peppering you back with questions, trust your gut, exaggerate the challenges of the job to weed out low commitment, REALLY check the referees. According to Welch you should know within two years whether you got the right guy. If you had just one question to ask you should ask why the person left the previous job.
7. People management - elevate HR, use rigorous, non bureacratic appraisals monitored for integrity with the same intensity as Sarbannes Oxly, use money, recognition and training to motivate and retain, face straight into charged relationships with unions, stars, sliders and disrupters, treat the middle 70 like the heart and soul of the company, design a flat organisation
8. Separations - Fire for integrity violations and spread the news, when firing on performance - no surprises and minimize humiliation.
9 Change - Only when required, get rid of resisters
10 Crisis management - Assume it's bad, assume that EVERYTHING will eventually be public knowledge, assume that you will be portrayed in the worst possible light, assume that the company will survive stronger for the wear
11 Strategy - Come up with a smart, realistic way to gain sustainable advantage (who are the competitors large small and large, current and future, is it commodity? growth curve? what are the drivers of profitability? Competitor SWOT - R&D, Sales force? culture? who are the customers adn how do they buy?), put the right people in the right jobs to drive it forward, seek out internal and external best practices and implement and improve them. Strategy involves making choices.
12. Budgeting - Use budgets to stretch and inspire not to negotiate. Base appraisals on market share and growth over base, not on targets.
13, New businesses - Spend upfront and put in most passionate people in leadership roles, make a hue and cry about it, give the venture more freedom than less, fight for resources if required.
14. M&A - no such thing as a merger of equals, cultural fit is as important as strategic fit, don't give away too much in negotiations, integrate boldly and quickly, don't 'conquer' your acquisition, don't pay so much that it can never be recovered, get over your angst and resistance fast if you are an employee
15. Six sigma - improve processes by reducing variability. Huge gains to bottom line and customer satisfaction.
16. The right job (like the people, opportunities to grow, options for the future, your own choice, interesting work content)
17. Getting promoted - Overdeliver, don't burden your boss into campaigning for you, manage your relationships with your subordinates, head major company initiatives, search out inputs and mentors, have a positive attitude and move it around, don't let setbacks break your stride.
18. Bosses - Don't be a victim. Over the long term you'll get everything if you take responsibility for it.
19. Work life balance - If you're a boss make work so engaging that people want to spend less time at home. If you're an employee overdeliver so that you can get what you want in terms of a work life. If you constantly publicly struggle with the balance you will get pigeon holed as ambivalent, entitled, uncommitted, incompetent or all of the above. You prioritise and you compromise. They are your decisions so deal with them and don't bother others about them.
Book Review: How to Win Explained Well
Summary: 5 Stars
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Introduction
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I thoroughly enjoyed reading WINNING. The book provides individuals insights, even tactics on how to be successful, particularly in a profession. The aim of the book is to answer the question, "How can I win?" for individuals and organizations.
I will now provide some highlights of the book I found to be particularly useful.
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How to Win as an Individual?
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Candor and a positive attitude, both will earn one credibility, trust, and admiration
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Leadership
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Leaders (managers) must evaluate performance , coah teams, and build self-confidence in individuals to be effective. It is critically important for Leaders to establish trust. See the above on how to win.
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How to Hire?
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Look for Integrity, Intelligence, and Maturity in individuals. A very important note is that individuals can be mature at any age and immature at any age. Do not stereotype young or old people regarding their maturity because of their age. Look for the 4 Es in a person, which are
(1) ENERGY
(2) Ability to ENERGIZE others
(3) EDGE (courage)
(4) EXECUTE (accomplish goals)
and also one P, which is PASSION.
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People Management
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To effectively manage people, an organization needs to take people seriously. Human Resources needs to be elevated in an organization to a position of substantial power, possibly equal in importance to the CFO. Further, reliable mechanisms must be in place to reward top performers with money, recoginition, and training. HR must closely look after the development and growth of an organizaiton.
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How to Part Ways
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You will have to read the book, but Jack and Suzy Welch discuss how to part ways with individuals due to integrity violations, economic downturns, and nonperformance.
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How to Deal with Change?
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Change for the sake of change is "stupid." Change is ultimately good, necessary, and important. However, while undergoing change, particularly radical changes, a clear purpose or goal must be communicated.
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Dealing with Crisis Management
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In the book, steps and assumptions are outlined to effectively deal with an organizaitonal crisis.
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Strategy
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In the book, strategy is defined as "making clear-cut choices about how to compete." To accomplish this end, you must examine the market, competition, yourself, the future, and possible winning moves to win.
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Budgeting
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(I really loved this chapter). An organization needs the right budget process! "Compensation for individuals and busiensses is not linked to performance against budget. It is linked primarily to performance against the prior year and against the competition, and takes real strategic opportunities and obstacles into account" (p. 198).
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Mergers and Acquisitions
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Assess the cultural fit as well as the strategic fit. The cultural fit of the two companies is equally if not more important than the strategic fit.
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How to Find the Right Job?
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Look at the people involved, opportunities, options, ownership, and work content of the position.
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Promotion?
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Amass mentors, see how to win.
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Bad Bosses
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Refuse to be a victim! Ride it out. If you deal with a bad boss, you will be ultimately rewarded (perhaps).
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Work-Life Balance
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Set priorties at work, at home, in your life. If you can, when at work, work. When not at work, play. The more you blend the two, the more stressed you will become.
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Tying Up Loose Ends
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In regards to China, discern the opportunities for your company, not the negatives.
Quotas in organizations are a disaster. Never appoint irresponsible people to responsible positions. All organizations should be a meritocracy, and people should ascend on merit.
The European Union (EU) in the long-term will be beneficial for the world.
Sarbannes-Oxley Act is beneficial but a bit extreme and requires a few important revisions.
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Conclusion
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I think the book is definitely worth reading. I truly enjoyed the insights provided in the book about managing GE. If I may say so, I believe Jack Welch is a positive realist. He believes in people, and that is made obvious throughout the book. I think he was an excellent and honest manager, and it is very important for people who want to win to read WINNING; it explains how to do it.
Book Review: How to be a winner!
Summary: 4 Stars
According to Jack Welch, winning in business is great because when companies win, people thrive and grow. There are more jobs and more opportunities for everyone. Winning makes people feel upbeat about the future, and gives them the opportunity to give back to society. Winning companies and the people who work for them are the engine of a healthy economy. Winning lifts everyone it touches--it makes the world a better place. However, it goes without saying that you have to win the right way--cleanly and by the rules. Companies and people that don't compete fairly don't deserve to win, and, thanks to well-honed internal company processes and government regulatory agencies, the bad guys are usually found and kicked out of the game.
But what does it take to win? Here are some notes I took:
An effective mission statement basically answers one question: How do we intend to win in this business? Effective mission statements balance the possible and the impossible. They give people a clear sense of the direction to profitability and the inspiration to feel they are part of something big and important. However, a mission cannot, and must not, be delegated to anyone except the people ultimately held accountable for it.
The executive team has to go out of their way to be sure they've created an atmosphere where people feel it is their obligation to contribute.
Act in a boundary-less fashion: Always search for and apply the best ideas regardless of their source; be tolerant of the bureaucracy; and see change for the growth opportunity that it brings. Take the value "We treat customers the way we would want to be treated."
Never let profit-center conflicts get in the way of doing what is right for the customer.
Give customers a good, fair deal. Great customer relationships take time. Do not try to maximize short-term profits at the expense of building those enduring relationships.
Communicate daily with your customers. If they are talking to you, they can't be talking to a competitor.
Leaders make sure people not only see the vision, they live and breathe it.
Leaders get into everyone's skin, exuding positive energy and optimism. An upbeat manager ends up running a team or organization filled with upbeat people.
Leaders have the courage to make unpopular decisions and gut calls. Leaders who long to be loved by everyone will fail.
When you're a leader, your job is to have all the questions. You have to be incredibly comfortable looking like the dumbest person in the room.
If you want your people to experiment and expand their minds, set the example yourself. Consider risk-taking.
Leaders celebrate. Celebrating makes people feel like winners and creates an atmosphere of recognition and positive energy.
Hiring good people is hard. Hiring great people is brutally hard. Nothing matters more in winning than getting the right people on the field. However, before you think about assessing people for a job, they 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 third test is maturity. Mature individuals can withstand heat, handle stress and setbacks and enjoy success with equal parts of joy and humility.
Every employee should know how the company is doing. That way, if layoffs occur, at least people will have some level of preparation.
After a crisis is over, there is always the tendency to want to put it away in a drawer. Don't--teach its lessons every chance you get. In doing so, you'll spread the immunity.
Come up with a plan for stretching dreams to the sky.
Always ask the following two questions: How can we beat last year's performance? What is our competition doing and how can we beat them? If you focus on these two questions, the budgeting process becomes a wide-ranging, anything-goes dialogue between the field and headquarters about opportunities and obstacles in the real world.
To give any new venture a fighting chance to succeed, you have to set it free and spend more money on it. Managing a $50,000 new product line in its first year is harder than managing a $500 million business in its 20th year.
With good leadership, a merger should be complete within 90 days.
Once you understand the simple maxim "variation is evil," you're 60 percent of the way to becoming an expert. The other 40 percent is getting the evil out.
Book Review: Jack Once Again . . . with Some Details
Summary: 4 Stars
Most authors will tell you that they don't understand what their book is about until about four years after the book comes out. What happened in the meantime? They were asked sincere questions by readers that revealed the metamessage buried within the text.
Jack: Straight from the Gut wasn't a very good book as my review on September 11, 2001 suggested.
Winning is a pretty good book that covers much of the ground that was missed in the earlier book. What happened in the meantime? Mr. Welch has answered hundreds of questions from bewildered readers who didn't understand how to apply what the said in the first book . . . and he married his third wife, who helped him with this book. Ms. Welch is a former editor of Harvard Business Review and her fingerprints are all over this book. Thank God!
The book begins with a defense and explanation of his basic approach to business based on investing in star businesses and performers, keeping the next 70% motivated and dumping the bottom 10%. It's a much better explanation than in Jack. You may buy his argument . . . or you may not. Most will not.
The second section is about leadership, Jack Welch style. It will remind you of books you've read about general managers, coaches, and heads of player personnel management baseball teams. Unless you plan to devote your life to climbing to the top of a large company, you'll probably opt for the Free Agent Nation instead.
The third section is quite well done. I recommend it to you. Chapter 11 on how to develop a strategy is worth the price of the book. I have already started recommending this chapter to my graduate business students. Chapter 12 on budgeting is a solid contribution to the subject. Chapter 14 is a tell-it-like-it-is description of how M & A goes wrong and how to avoid it. Nice!
For those starting out careers, I recommend Chapter 16. It's good advice.
Chapter 19 was a disappointment. But what does a work-a-holic know about work-life balance?
The structure of each chapter was well designed. After a brief introduction, Mr. Welch outlines a few key points. He then puts a little more perspective on the problem with an example (often from GE) and goes on to explain each of the key points with one or two examples. A number of insightful questions from his conferences and public appearances are included.
His tone is much improved from Jack. He acknowledges his weaknesses throughout . . . which he only did concerning his early years in Jack. He also candidly shares an insider's view of what is said behind closed doors in many major companies. It's that candor that makes this book special.
A famous management guru once told me about meeting Mr. Welch when he was a young executive. The other GE people knew that Mr. Welch would make a great CEO, but they were afraid that he would antagonize too many people along the way. Instead, Mr. Welch learned how to use his energy and candor to stimulate useful action. And now, in this book, he seems to have learned to start to see himself more objectively.
For me, the main disappointment about this book was that again he doesn't explain much about the success of GE Capital, which was the major achievement while he was at GE that drove the company forward. I learned more from one answer on this subject that Dennis Dammerman gave me at a conference than from reading two books by Jack Welch. Perhaps that suggests that Mr. Welch doesn't really know why it worked. In this book, Mr. Welch acknowledges that Mr. Dammerman was his mentor in all things financial, even though Mr. Dammerman was his subordinate.
But compared to the usual "didn't I do a great job" book by large company CEOs, this one is worth reading . . . both for what it says and what it doesn't say.
Draw your own conclusions about how much of this advice you feel is relevant for the future. I suspect that much of the advice won't hold up. For example, there's almost nothing in here about business model innovation beyond pushing geographical expansion by putting top performers in charge and being willing to set up new organizations.
Book Review: In spite of the lame title, it _is_ a good book...
Summary: 4 Stars
"Leadership - it's not just about you, it's about them." This is my favorite quote. On the whole I must say I liked this book. Contrary to some other leadership or management books, Welch doesn't restrict himself to one management approach and say it would work for most situations. He covers most aspects of managing an organization. And he does it well - overall. He advocates respect for all, candor, transparency and fairness when handling people and projects. He preaches following your business ideas and avoiding ponderous processes.
While the main intended audience is the top manager of an organization, someone who has the ability and responsibility to shape performance evaluation goals, budget planning and strategy, everyone would benefit from reading this book. Some ideas are ground breaking; others are common sense and still others I completely disagree with.
I found very interesting Welch's view of the connection between performance and budget adherence. If your report wants to go over the budget in a significant fashion, wouldn't you want to have a chance to approve or not the expenditure first? Perhaps he wants his reports to discuss new projects any time of the year without the stress of going over budget limits.
Welch describes how to let go of people. I agree with this approach: thoughtful but quick. Don't let things fester, it hurts more the longer you wait. However, I disagree with the importance of face time. There are ways to effectively manage around it. As to the example of disconnect with values and the employee who wanted to fly his own plane to meetings, I couldn't disagree more. This desire to have cookie cutter executives is too conformist, old fashioned and frankly boring.
Admittedly the author takes the 20,000 foot view of things. But some things he just plain gets wrong. For example, he refers to Dell and Wal-Mart as proactive cost cutters and that it is the core of their business approach. That is just not so. Dell succeeds because of an innovative just in time building and shipping pipeline. Wal-Mart succeeds because of an innovative data mining for purchase statistics and customer buying patterns. There is no doubt that bottom dollar is part of the Wal-Mart customer experience, but this chain can only achieve low cost because it knows with razor sharp accuracy what its customers want. As to Dell, low cost alone is not what attracts customers; it's also the quality of its products and its quick no-fuss ordering system.
Some of the chapters introduce terms that aren't defined. Best practices and six sigma, differentiation, budgeting and strategy could include or exclude some important details depending on the reader. And, in each of these instances, he mistakes the process for the philosophy and why some managers stay away from them. For Six Sigma, the problem isn't that people have been scared by experts. It is that too often it is implemented ad nauseam. It is the same thing for ISO9000, SEI or Malcolm Baldrige. Designated people spearhead the initiative and get so caught up with its minutiae they forget its intent. And it gets worse every time it is taught all the way down the line. By the time it is implemented, it is such a pain in the rear end, people can't wait to get on with it and do some real work. And there lies the problem. The original purpose is lost.
In closing, I would be remiss if I didn't mention something about work life balance. While Welch recognizes that people have to make choices and take responsibility for them, he advocates keeping those choices private from your manager. This may be right for yesterday's and today's workplace. But as more women continue to enter the workforce and rise to the top, as more men continue to grow their involvement with their family, the market will put pressure on corporations to make room for those needs. Things will change. It's only a matter of time. Until then, follow the author's advice and go with the flow.