Winning
by Jack Welch, Suzy Welch
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Book Reviews of Winning
Book Review: An Excellent, Must Read book on General Management!
Summary: 5 Stars
This has to be my current overall "Favorite Management Book". It's just packed full of straight-forward, clear advice from the modern master of management (not to be confused with the past master Drucker and the future master Peters). Say what you will about his bloated retirement package, this man knows what it take to win and covers all the basics in this excellent book!
Below are just a few of the many, many, many great tidbits from the book:
* Have a positive attitude and spread it around. Never let yourself be a victim, and for goodness sake - have fun!
* All-purpose list of values are easily said but not easily followed and is just the price of admission (service, respect, etc.). Always, always, always, talk about the mission! Make values real by reward and punishment.
* Biggest dirty secret in business is lack of candor. With candor you get idea rich, gain speed, cut costs. People don't speak their mind because it's easier not to (no anger, pain, confusion, resentment). Not being candid is about self-interest, making your life easier.
* Differentiation: Companies win when management makes clear and meaningful distinction between the top and bottom performers. When it cultivates the strong and culls the weak. Differentiation is the fairest and kindest approach overall where everyone is a winner. Differentiation is about resource allocation. Managers invest where there is payback and cut losses elsewhere. Protecting non-performers always backfire! Drains energy, causes resentment, unfair, and no candor! In downturn, nice under performers are always the first to go. And they are always surprised and hurt! You are never too nice to differentiate, only too cowardly. Best Performance Review: straight, honest, you know where you stand, and what you need to do.
* The Rules of What a Leader Does: Relentlessly upgrade their team by using every interaction as an opportunity to evaluate, coach, and increase self-confidence. Make sure people not only know the vision but live and breathe it. Get into everyone's skin, exuding positive energy and optimism. Establish trust by practicing candor, transparency, and credit. Have the courage to make unpopular decisions and gut calls. Leaders probe and push with a curiosity that borders on skepticism. Making sure their questions are answered with action. Inspire leading and risk taking by setting example. Leaders celebrate.
* Hiring - 3 Acid tests: Integrity - Do they tell the truth and keep their word. Do they take responsibility for past actions, admit mistakes, and play to win by the rules. Intelligence - Can work with smart people and display intellectual curiosity. Maturity - Can withstand the heat and setbacks. Respects emotions of others. Handles success with humility.
* 4E and 1P Framework: First E is positive Energy. Second E is ability to Energize others (Candidates must have the first 2, they can't be trained in). Third E is Edge - Ability to make the tough yes/no decisions. Forth E is Execute - Ability to get the job done. Final P is Passion to win.
* Steps for change: Attach every change initiative to a clear purpose or goal. Hire and promote True Believers and Get on With It types. Ferret out and get rid of resistors, even if their performance is satisfactory.
* Strategy is about resource allocation. Choices about how to compete. Think about: What the playing field looks like now? What is the competition up to? What you've been up to? What's around the corner? What's your winning move?
* Leadership is helping other people grow and succeed. Don't do the predictable! Do more! Do something different!
Book Review: Useful, actionable, insightful management perspective
Summary: 5 Stars
Jack Welch discusses several aspects of management including the basics, people management, strategy, and career.
The basics
1. Candor: The importance of candor in eliciting meanigful discussions, smart ideas, and fast action.
2. Differentiation: Putting more resources behind successful businesses and getting out of the less successful ones. Making raises significantly higher for the outstanding people in an organization.
3. Listening to, evaluating, and acting on suggestions from *everyone* in the organization, not just the boss.
Management
4. Leadership: evaluate, coach, build self-confidence; ensure compensation plan encourages people to live and breathe the vision; enthuse team with positive can-do attitude; build trust; courage to make unpopular decisions; set example for risk taking and learning; celebrate / reward.
5. Hiring: screen for intelligence, energy, passion, capability to enthuse team, sound decision making, and execution.
6. People management: rigorous evaluation system; money, recognition, and training to motivate and retain; flat org charts with clear responsibilities. Includes insights into dealing with potentially charged relationships such as stars, sliders, disrupters, and unions.
7. Firing / layoff: be open, no surprises, minimize humiliation.
8: Change: communicate the purpose and vision clearly; hire-and-promote change supporters; get rid of resisters; anticipate the next disaster in the industry and position organization to benefit from it.
9. Crisis management: the problem is worse than it appears; there are no secrets; your handling of the crisis will be portrayed in the worst possible light; there will be change in people and processes.
Beating the Competition
10: Strategy: come up with a smart, realistic way to gain sustainable competitive advantage; put the right people in the right jobs to drive; continuously seek out and implement best practices to support strategy. Requires discussing competitive landscape, competitors' recent moves, your recent moves, scary future scenarios, and your winning move to make customers stick to your product / service.
11. Budgeting: How can we beat last year's performance? How can we beat competition? Compensation and operating plans are linked to above questions and subject to change.
12. Organic growth: Ensure that a new idea is adequately resourced, managed by your best people, and has high visibility. Err on the side of freedom: get off the new venture's back.
13. Mergers and Acquisitions: merger of equals unlikely to succeed except in financial services; cultural fit is important; avoid making so many concessions that the acquired ends up calling all the shots; complete merger witin 90 days; pick the best talent from the combined companies; avoid paying a premium that cannot be recouped in an integration; supporters are picked over resisters.
17. Six Sigma: reduce variation.
Career
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18. The right job: Considerations include the people you'll be working with, growth opportunity, opening future doors, and work content.
19. Promotion: deliver performance far beyond expectations; don't make your boss use political capital in order to champion you; manage downstream as carefully as managing upstream; champion major initiatives; seek input from several mentors; spread positive attitude; bounce back from setbacks.
The management issues are discussed clearly and Jack's experiences and insights will help you to improve.
Book Review: Welch Has Much More to Offer
Summary: 3 Stars
Jack Welch clearly is a legendary business leader, and an idol to me; however, a great writer he is not. The book offers a few insights - eg. the power of corporate vision and value, budgeting and rewarding performance in the real (dynamic) world - but his book is not nearly as specific and helpful as Larry Bossidy's (Welch's former #2) "Confronting Reality," and "Execution." Sadly, the book also does not reference how Welch greatly simplified planning and accountability by getting rid of the planners, and instead focusing on fast reaction - a lesson that some firms, government and public education still need to learn.
In addition, Welch does not address most of the vast changes simplifying much of management in the last few years - even though he pioneered much of their use. The job has become primarily one of reducing costs - especially by shifting work away from Americans. This is accomplished by:
1)Maximizing outsourcing (eg. to Canada - primarily to avoid U.S. healthcare costs; to China and India - primarily to greatly reduce production labor, call-center, and design and programming costs,
2)Maximizing use of illegal immigrants within the U.S. - eg. in the meatpacking, construction, and other food-processing and food-serving areas,
3)Maximizing use of legal temporary immigrants within the U.S. - eg. Indian citizens with H-1B and L1 visas in areas such as electronics design and manufacturing, and computer programming.
4)Maximizing use of aggressive accounting - eg. capitalizing expenses, pre-booking revenues, optimistic assumptions about corporate pension fund growth, creating new entities to "hide" excess debt etc., and taking "special write-offs" wherever possible.
5)Minimizing exposure to risk of major commodity price increases - eg. large-scale futures buying of aviation fuel.
Further American worker head-count reductions are accomplished by implementing new IT systems, process improvements (eg. Six Sigma, cycle-time reductions), "rank and yank" personnel evaluations (Welch does reference this topic, but sugar-coats it to seem beneficial to all), improved quality (eg. NYC subway cars now require much fewer inspections), and divesting or consolidating companies (mergers and acquisitions), divisions, functions (eg. personnel, IT, procurement), products, components, and suppliers. Cost reductions for those remaining American employees can be achieved by reducing salaries (eg. competitive contracting out "non-core" functions - defined as broadly as possible), infrastructure (eg. work-at-home, "owner-operator" truckers), health-care benefits (through increasing worker contributions) and pensions (eg. via canceling, or switching from "defined benefit" to "defined contribution" plans. And then all the preceding measures are forced through the supply chain by requesting price reductions and/or the "China price."
Finally, leveraging tax reductions, abatements, pension plan takeovers, exemptions from lawsuit liability and various regulations (eg. EPA, OSHA. zoning) and various other "freebies" from government has also become another major modern "management skill" (eg. via threatening or actually moving production and/or headquarters; promising to create new jobs, threatening lawsuits, making large campaign donations) that Welch fails to reference in "Winning."
In summary, "Winning" is somewhat interesting, but mostly superficial and irrelevant. And overall, "winning" is no longer a skill to be proud of, worth multi-million dollar payouts to CEOs, or necessarily good for America.
Book Review: One-on-one with Jack Welch
Summary: 5 Stars
Pretend that you have written a letter to Jack Welch, asking him to share what he has learned throughout his career thus far, especially what he has learned about "winning" in the business world. To your surprise and delight, he responds...inviting you to spend a long weekend with him on Nantucket, during which you will have his undivided attention. He anticipates almost all of your questions and has carefully prepared to answer them, fully and honestly. What we have in this volume is probably what Welch would share with you if given the opportunity.
How best to describe Winning? It is not an autobiography. It offers memoirs but only to the extent Welch draws upon his life and career to establish a context within which to pose a question, offer an example, make a key point, etc. Unlike so many other business books allegedly written by celebrity CEOs (but which were in fact primarily crafted by ghostwriters), this book is a refreshing exception. There is no doubt in my mind that Welch wrote it. Of course, along the way, he would have been a fool not to have obtained feedback from his wife, Suzy, given her own distinguished career. She is widely renowned for her talents, both as an editor and as a business thinker in her own right. But this is definitely Welch's book.
Much of what Winning offers is, of course, relevant to business but its greater value, for me, is derived from the personal relationship which Welch immediately establishes and then sustains with his reader. Oh sure, he shares generously of what he learned during a 40-year association with G.E. Those reminiscences are both informative and entertaining. However, as Welch points out, he learned almost as much about business after he retired as CEO as he did when he worked there. Since then, "I have been asked literally thousands of questions. But most of them come down to this: [begin italics] What does it take to win?" [end italics] His thoughtful and eloquent response to that question gives form and direction to this book.
To his credit, Welch never hesitates to acknowledge his poor decisions, his deficiencies as a corporate leader and manager, and his disappointments during what has been an otherwise extraordinarily successful business career. What also comes through loud and clear are his obsession with achieving superior performance (especially his own), his delight in taking on formidable challenges, his passion for "winning," whatever the competition may be, and his appreciation of each new day as well as the new opportunities which it offers. Also obvious is that he possesses what Hemingway once described as a "built-in, shock-proof crap detector."
What a privilege and pleasure it would be to spend that hypothetical long weekend with Welch. Presumably those who have done so would agree that reading this book gives at least some indication of what would be revealed during a series of one-on-one conversations with him. I disagree with Warren Buffett's claim that "No other management book will ever be needed." (Will all due respect to his friend, perhaps Welch also does.) However, I think Winning offers a wealth of sound, practical, at times unorthodox advice about leadership and management. For executives who aspire to be "winners," this is a must read.
I also highly recommend the unabridged audio set (11 hours on 9 CDs) during which Welch reads from this book. The set includes a lively as well as informative interview of him by Jane Friedman, president and CEO of HarperCollins.
Book Review: A handbook for action-brilliant simplicity-call to action
Summary: 5 Stars
Put aside your personal feelings of admiration or animus towards Jack Welch and his current wife. If you can read this book as coaching from a most successful CEO of a huge corporation, you will be able to get a lot more out of it. This is a practical book that is focused on real world activities rather than a book of theory or models to be debated in the world of business schools (although it would be a great read for any MBA). One of the amazing qualities Welch possesses is an infectious enthusiasm for business. When I heard him interviewed at the University of Michigan Business School for his last book and when I read his books, I get charged up to go out and do more. To be able to get others passionate about their work is a real talent and very valuable for any leader.
Keeping any organization vital, growing, and adapting to changes in the marketplace is a terrific achievement. Accomplishing that with an organization with hundreds of thousands of employees that spans the globe and that works within many different legal and cultural environments is staggering. If you don't believe it, I doubt if you have ever tried to run an organization of any size. One of the things you will notice while reading this book is how hard Welch works at keeping things as simple as possible.
At first, this might come across as simplistic rather than simple. However, there is genius in the right kind of simplicity. The right kind of clarity and openness can free up energy to act competitively, to innovate, and to strive for more learning and accomplishment. Being simplistic offers only an irrelevant model that does not contribute to understanding or the right kinds of activities. A simplistic model actually adds complexity to work because it encumbers people who are striving to implement the model while dealing with ever increasing complexities in their real world jobs that are unconnected to the model supposedly guiding their actions.
I especially liked the way Welch talks about strategy and how his five questions get to the point. Over and over again in this book, Welch stresses that these business processes should not take a lot of time to implement. He focuses on days and weeks, at most a few months, rather than years to accomplish strategic decisions, implementing mergers, and other business activities. How many of us have participated in painful and glacially slow change processes that never worked. Doing it along the lines of what is discussed in this book would have been a lot less painful and likely more successful.
Am I uneasy about anything discussed in the book? Not much. I do think that Welch comes across as somewhat callous and so focused on business activity that the truly human dimension might get lost. However, I have never worked for him so I don't really know. Unlike many, I think his doctrine of differentiation is a good thing. If an organization does not continually revitalize itself it not only makes itself uncompetitive, it robs those who are successful from opportunities to advance. As Welch describes the process of working with the bottom 10 percent and working with them to improve before letting them go, I think it is a good process.
This book contains solid information that I will refer to many times. I highly recommend it. Just don't mistake its hard won simplicity for mindless superficiality. There is brilliance in what Welch discusses.