BOOK SUMMARY REVIEWWINNING BY JACK WELCH & SUZY WELCH
JOHN FRANCIS "JACK" WELCH,JR. (BORN NOVEMBER 19, 1935) ISAN AMERICAN CHEMICALENGINEER, BUSINESS EXECUTIVE,AND AUTHOR. HEWAS CHAIRMAN AND CEO OF GENERAL ELECTRIC BETWEEN 1981 AND2001. DURING HIS TENURE AT GE,THE COMPANYS VALUE ROSE4000%.
Introduction• The reason for writing this book is due to the massive of questions from people “what does it take to win”• Dealing with people is more complicated than dealing with figures• Winning is great because it provides people better opportunity in life qualities & growth• Have positive attitude and spread it around.• The Book is divided into 4 chapters – Underneath it all – Your company Talks about the Organization – Your Competition – Your Career Talks about Joining a Company
Mission & Values• Mission is where you are going to and values are the behavior which gets you there• Mission statement should be clear to every body and not only to executives and basically answers one question: How do we intend to win in this business?• Effective mission statements balance the possible & impossible• Give people a clear sense of the direction to profitable and the inspiration to feel they are part of something big and impartment• Setting missions is top management responsibility and everyone in the company should have something to say about values.• Company should understand their strength & weakness• Easier to debate your own thoughts in smaller organization• Values & behaviors should be backed up with rewards
CandorLack of candor basically blocks smart ideas, fast action, and good peoplecontributing all the stuff they’ve got. It’s a killer.•Candor leads to winning – Gets more people in the conversation which richer further the ideas – Generate speed in business by debating rapidly on the ideas – Cut costs by eliminating meaningless meetings & reports•Why people don’t use candor – Easier not to speak your mind – Creates anger, pain & confusion – Curry favor with other people.•To get candor – Reward it, appraise it & talk about it – Introduce it in a positive manner
Lessons Learned• Underneath It All – Chapter 1 (Mission and Values) • Values and Behavior backed by reward • Setting mission is top management responsibilities but the values should be bottom up. • Mission should be clear to everyone – Chapter 2 (Candor) • How to apply Candor – During appraisal performance – During Budgeting – Leading by Example – Introduce open annual forum
DifferentiationIs a way to manage people and business and people discussed differentiationvigorously but over the years, most people came to strongly support it as our wayof doing business.•In Business – Companies win by making clear and meaningful distinction between strong business from the weak – Requires a frame work that every one understand & follow – Differentiation cannot, and most not, be implemented quickly•With People – High performer with highest bonus (20% top) – Majority & enormously valuable (70% middle) – Minority who should go to where they belong and can excel (10% bottom)
Differentiation Continue• Differentiation’s main criticisms – Unfair due to favoritism – Mean & bulling – Puts people against each other & undermined team work – Belongs only to places the culture accepts – Benefits mainly the only top 20% – Favors people who are energetic & extroverted and under values people who are shy & introverted
Voice & Dignity• People want voice & dignity regardless of their age & background.• Listen to all ideas regardless from whom it comes from• Management judgment decides which ideas should go to practice from those which should not• Choose the right system you believe would work in your company ensuring every one is heard & respected“Some people have better ideas than others; some are smarter or more experienced or more creative. But everyone should be heard and respected”
Lessons Learned• Underneath It All – Chapter 3 (Differentiation) • Differentiation is a good concept but this concept does not have proven record to work – Chapter 4 (Voice and Dignity) • Team Building • Offsite meeting • Forum • Suggesting Scheme
Leadership This chapter look at how each one should run an organization using 6 principles First Principal is LEADERSHIP “It’s Not Just About You” Leadership requires distinct behaviors and attitudes Before you are a leader, success is all about growing yourself, When you become a leader, success is all about growing others Leader helps others realize their full potential as human beings Leader should have enough insight, experience and rigor to balance the conflicting demands of short and long term results. Based on Welsh there are Eight (8) Leadership rules ;Rule 1. Leaders relentlessly upgrade their team, using every encounter as an opportunity to evaluate, coach, and build self- confidence.Rule 2. Leaders make sure people not only see the vision, they live and breathe it.Rule 3. Leaders get into everyones skin, exuding positive energy and optimism.Rule 4. Leaders establish trust with candor, transparency, and credit.Rule 5. Leaders have the courage to make unpopular decisions and gut calls.Rule 6. Leaders probe and push with a curiosity that borders on skepticism, making sure their questions are answered with action.Rule 7. Leaders inspire risk taking and learning by setting the example.Rule 8. Leaders Celebrate “ Work is too much a part of life not to recognize moments of achievements. Grab as many as you can and make a big deal out of them “You are not a leader to win a popularity contest – you are a leader to lead”
Hiring Second Principal is HIRING “What Winners Are Made Of” What is the one thing you should ask in an interview to help you decide? Hiring good people is hard, hiring great people is brutally hard Getting the right people on board is a key to success Clever strategies and advanced technology are all nothing without great people Hiring right is so important and so challenging! There are various methods to successfully recruiting leaders that need to be considered. The 3 acid tests - Integrity, Intelligence & Maturity 4-E and 1-P framework - Positive Energy, Ability to Energize, Edge, Execute and Passion Hiring for the top "What does it take" • The various characteristics - The first characteristic is authenticity. - The second characteristic is the ability to see around corners. - The third characteristic is a strong penchant to surround themselves with people better, smarter than they are.“Don’t beat yourself up if get hiring the wrong some of the time. Just remember, the mistake is yours to fix”
People Management Third Principal is PEOPLE MANAGEMENT “You’ve Got the Right Players. Now What?” You have the right team! They need to work together, improve their performance, be motivated, and grow as leaders! They need to be managed Help your people work together, grow and stay motivated To manage people well, companies should follow the following six fundamental practices; Make Human Resources HR a priority by making them one of the most important departments in the company. Use a rigorous, none-bureaucratic and clear evaluation system where employees understand how well they have performed and how they may be able to improve. Motivate people where they become more productive, provide training, and recognize employees when they perform well. Face straight into charged relationship with unions, starts, sliders, and disrupters Treat the middle seventy percent of employees as most important Creating a flat organizational chart with blindingly clear reporting relationship and responsibilities “Very few companies have meaningful evaluation systems in place. That’s not just bad-it’s terrible!”
Lessons Learned• Your Company – Chapter (Leadership) • How to develop others and get the best out of them – Chapter (Hiring) • Be confidence bring top performance people, better, smarter than they are. • Elevate HR to a position of power and primacy in the organization • Apply rigorous evaluation system to bring the best out of the employees – Chapter (People Management) • Lean Organization (flat Chart)
Parting Ways Fourth Principal is PARTING WAYS “Letting Go is Hard to Do” Work is not paradise, sometime difficult decision has to be made “let go” Always work to make the process tolerable for all involved How to manage parting ways with as little pain and damage as possible There are three different reasons to “fire” or let employees go:- The first is to fire because of integrity violations Second is to lay off because of economical reasons The final reason to fire an employee is because of poor performance How to manage parting ways with as little pain and damage as possible:- - No Surprises - Minimize Humiliation “Yes , the employee has done a poor job. But until he departs, your job is to make sure he doesn’t feel as if he is in a leper colony”
Change Fifth Principal is CHANGE “Mountains Do Move” Change is an absolutely critical part of a business, at times you do need to change before you have to. Implementing change can be incredibly difficult and resisted, however managing change can be incredibly exciting and rewarding with the results Managing Change can incredibly exciting and rewarding, particularly when start to seeing results Be a change agent find ways to use a constant state of change to advantage Different reasons for implementing change: First, there should always be a clear reason for change Second, make sure you hire and promote individuals who accept change and want to work Third let go individuals who dislike and try to stop the change, even if their performance is satisfactory Lastly, seek for other opportunities that may arise from other business failures.“Managers often old on to resisters because of a specific skill set or because they’ve been around for a long time. Don’t!”
Crisis Management Sixth Principal is CRISIS MANAGEMENT “From Oh-God-No to Yes-We’re-Fine” Any businesses can experience a crisis, and they often happen unexpectedly. Crisis Happen as long as companies are made up of human beings, there will be mistakes. Don’t forget to run your business, even during a crisis Leaders reaction/act to crisis should be balanced Managers can waste a lot of time at the outset of crisis denying that something went wrong! Skip that step. Crises are never good for businesses and can hurt an organization if it is not handled well The five assumptions to follow when dealing with a crisis: First is to assume the situation is worse than it really is Second is to be honest with everyone and expose information before opinions and assumptions are made. Third is view the crisis in the worst possible way. Fourth, crisis always leads to change. Finally, the fifth assumption is to believe that your organization will survive, recover, and learn from the crisis. “With big crises, don’t ever forget you have a business to run”
Lessons Learned• Your Company – Chapter (Parting ways) • Staff to be treated with respect, to be informed – Chapter (Change) • Change is a process • Understand when to make Incremental • Crises Management – Cultural change – Mindset Radical
Strategy To be a winner, you should have that one thing that you are known for, you own trademark, and, always try and improve your business, never settle for being good enoughThere are 3 Steps to do so:•Come up with an "aha" for your business – What the playing field looks like now? – What the competition has been up to? – What youve been up to? – Whats around the corner? – Whats your winning move?•Put the right people in the right jobs to drive the "aha" forward – Matching people with jobs. That depends on the statue of the business.•Relentlessly seek the best practices to achieve your "aha" – Finding best practices, adopting them, and continually improving them (learning organization). So, Strategy is "making clear-cut choices about how to compete. You cannot be everything to everybody, no matter what size of your business or how deep its pockets."
BudgetingNegotiated Settlement: when business units set low target goals that are easilyachieved, and management team ask for higher, challenging targets, then both partiessettle for in-the-middle target. This allows the corporation to look good because theyhave accomplished their goals and are able to give bonuses.Phony Smiles: when top management leads individuals to believe their budgetingideas are great by giving them a smile and telling them how good of a job they havedone. In reality, top management already has a budgeting plan and disapproves thenew proposal.Budgeting should be led by the answers of the following two questions: – How can we beat last years performance? – What is our competition doing, and how can we overcome them? Look at obstacles and opportunities in the real world. Allocating resources becomes more of an operating plan than a budget.
Organic GrowthThree types of errors: 1. Not devote adequate resources, particularly in relation to staff. 2. They do not talk enough about how promising or the importance of the new business. Actually, instead of promoting their potential, they tend to hide it and plunge it in discretion. 3. Limit the autonomy of the new businessThere are three guidelines for a winning proposition: Just do theopposite of the notes above. 1. Spend plenty up front, and put the best and most enthusiastic in positions of responsibility. 2. Make an exaggerated commotion about the potential and importance of the new business. 3. Grant as much freedom as possible.
Lessons Learned• Your Competition – Chapter (Strategy) • Learning Process • Finding the right People – Chapter (Organic Growth) • Finding the right people
Mergers and Acquisitions• Companies merge together or acquire other businesses so that they can grow and become more profitable similar to ventures.• When companies acquire others or merge together many factors must be set into place. In this chapter, Jack Welch talks about seven pitfalls that could cause businesses to fail when acquiring or merging with other business: 1. The first pitfall is to assume that two mergers are equal. Mergers should not be equal because then there would not be any reason to merge together. There is nothing to gain or lose. 2. The second pitfall is focusing in strategic fit and failing to assess cultural fit between the two companies. This will cause conflict because employees will be focusing on different values and will not be targeting the same goals.
Mergers and Acquisitions3. The third pitfall is when the acquired company makes all the decisions as if it were never acquired. This will definitely cause conflict because each company will be using different management strategies instead of the acquirers.4. The fourth pitfall is merging the companies slowly. According to Jack Welch, “The objective made clear to everyone should be full integration within ninety days of the deal’s close”.5. The fifth pitfall is eliminating all management of the business that is acquired. The acquired business may have managers that are better suited for the job rather than the acquirer’s managers. Place talent managers where they fit best.6. The sixth pitfall is spending too much to purchase the company. It may not be worthwhile to purchase a business that will never be paid off.7. The final pitfall is to keep individuals that accept the change only and eliminate the ones who resist with good brain. Talent brains will allow the business to continue to operate smoothly and successfully.
Six SigmaAccording to Jack Welch, “Six Sigma is a quality program that, when all saidand done” such as:•Improve your customer’s experience and satisfaction.•Lowers your cost.•Builds better leaders.Six Sigma is an ongoing program throughout many businesses today tobecome more efficient and to continuously improve processes in all parts ofthe business.Six Sigma also teaches how to create better leaders to help lead the businessin the direction it wants to go.
Lessons Learned• Your Competition – Chapter (Mergers and Acquisitions) • Pitfall check list – Chapter (Six Sigma) • To have quality program in place and fallow up.
The Right JobPeople:It is virtually impossible to know where any given job will take you. Pay is not alwayseverything.“If you do not share organization overall values, personality traits and behaviors, thenyou are putting on a persona just to get along (what a career killer)”You need to find your people the earlier the better.Opportunity:Join a company where learning is truly a value, growth for every employee is a realobjective, somewhere you can say “I’m going to learn something here”Any new job should feel like a stretch not a layup.Options:Working for some companies is like winning an Olympic medal. For the rest of your career,you are associated with great performance. Like McKinsey, Microsoft, Wal-Mart.Obviously employee branding phenomenon should not totally lead you decision. Smallcompanies offer experiences and exposure you cannot beat.But remember every job you take is a gamble that could increase your options or shut themdown.
The Right Job (Continue)• Ownership: Working to fulfill someone else’s needs or dreams almost always catches up with you.• Work content: Something about the makes you want to come back day after day. Every job has its ups and downs If the job doesn’t excite you on some level, then don’t settle.• Those special cases: Authenticity may be the best selling point you’ve got. Never quit a job, it is much, much easier to get a job from a job. If you are performing well, two outside observers are likely to know, headhunters and competitors. Don’t be “Perennials” And if you are let go, then act like a winner and always have “reservoir of self-Confidence”“Finding the right job takes time and experimentation and patience, however it gets easier and easier”.
Getting Promoted• All careers, no matter how scripted they appear, are shaped by some element of pure luck. “it can zig zag for reason beyond your control, like an acquisition, or you might miss it because of politics or nepotism”.• Never give up: Deliver sensational performance Don’t make your boss use political capital.• The power of positive surprise Expand your job’s horizons, change your job in a way that makes the people around you work better and your boss look smarter. Don’t just be predictable.• Your own worst enemy. The most reliable way to sabotage your self is to be a thorn in your organization’s rear end.
Getting Promoted (Continue)• Other political capital drains Do not be a kind of person, for people to ask “hold on, can I trust this person” And do not tear down people around you, insulting or disparaging them in order to make your own candle burn brighter.• Furthermore Be careful, boss-subordinate relationship can easily fall into two career damaging traps.• Getting on the radar screen You can raise your visibility by putting your hand when the call comes.• Amassing mentors People always looking for that one right mentor to help them get ahead. “but there is no one right mentor. There are many right mentors”• Don’t be a downer No one likes to work under or near a dark cloud. Even if the “cloud” is very smart.• Never let set back break your stride
Hard Spots• Great Boss can be friends, teachers, coaches, allies, and sources of inspiration all in one, yet in contrast a bad boss can just about kill you. (kill the positive energy, commitment, and hope)“The world has jerks. Some of them get to be bosses so deal with it (do not let yourself to be the victim)”• Generally speaking, bosses are not awful to people whom they like, respect, and need. Think hard about your performance.• What’s the endgame for my boss? Deliver strong results and have a can-do approach until relief arrives. (act of God, or till you find another job) And remember there is a reason why kids don’t tattle on bullies. Unfortunately the same principle applies in the office Come to grips with the fact that you are staying with a bad boss by choice, which means you have forfeited you right to complain.• And remember exactly what made the bad boss bad and how it made you feel – so that when the time comes for you to be a boss, you won’t be the same.
The Work Life BalanceThe work-life balance concept is one of the most important concepts to individuals today•Priority management People who put business success first most likely have to give up some level of intimacy with their kids: it’s a swap – a deal you have made with yourself about what you keep and what you give up. “Your boss’s top priority is competitiveness (he will want 150% of you) to be captured for the company.” “People with great performance accumulate chits.” “And when push comes to shove at promotion time, bosses will always give the job to the devil they know.”•Best Practice 1: “Draw you boundaries around you activities, when at work, keep your head in work and do the same at home.”•Best Practice 2: “Have the guts to say NO, Not to something large as promotion but to smaller stuff”•And be careful you can’t live someone else’s concepts of your life in the name of balance•At times the work-life balance concept may conflict and you must decide what is best for you.