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Differentiation winning


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Summary of the 'Differentation' chapter from the book 'Winning' by Jack Welch

Published in: Business, Technology
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Differentiation winning

  1. 1. Differentiation [Ref - “Winning” - Jack Welch] Jayakumar Balasubramanian
  2. 2. Differentiation is nothing new <ul><li>“ I didn't invent differentiation I learned it on the playground when I was a kid. When we were making a baseball team, the best players always got picked first, the fair players were put in the easy positions, and the least athletic ones had to watch from the sidelines. Everyone knew where he stood” </li></ul><ul><ul><ul><ul><ul><li>- Jack Welc h </li></ul></ul></ul></ul></ul>
  3. 3. The Hardware aspect - Business <ul><li>Most often “Differentiation” is only applied when it comes to people (software), which is not correct. </li></ul><ul><li>It equally applies to businesses (hardware) as well. Businesses needs to be differentiated. A company has only so much money & managerial time. Winning leaders invest where the payback is the highest. </li></ul><ul><li>Clear-cut definition of a “strong” business – No.1 or No.2 in its market. It it wasn't, the managers had to fix it, sell it , or as a last resort, close it. </li></ul><ul><li>Running your company without differentiation among your businesses or product lines may have been possible when the world was less competitive. With globalization and digitization, forget it! </li></ul>
  4. 4. The Software aspect - People <ul><li>Top 20%, Middle 70%, Bottom 10% </li></ul><ul><li>It requires managers to act on this distinction. I emphasize the word “act” because all managers naturally differentiate in their heads, very few make it real </li></ul><ul><li>Top 20% - Showered with bonuses, stock options, praise, love, training and a variety of rewards </li></ul><ul><li>Middle 70% - Enormously valuable to any company. Keep this segment of people engaged and motivated is the major challenge </li></ul><ul><li>Bottom 10% - They have to go. People belong to this segment most often go on to successful careers at companies, where they truly belong </li></ul>
  5. 5. Differentiation – In picture
  6. 6. Reasons to hate differentiation <ul><li>[Reason – 1] Differentiation is unfair because its always corrupted by company politics. The 20-70-10 is just a way of separating the people who kiss the boss's rear from those who don't </li></ul><ul><ul><li>Creating Merit based system </li></ul></ul><ul><ul><li>When merit lacks, organization/team will fail in the long run </li></ul></ul><ul><li>[Reason – 2] Differentiation is mean and bullying. Its like the playground in the worst possible way – weak kids are made into fools, outcasts and objects of ridicule </li></ul><ul><ul><li>Everybody actually know where they stand </li></ul></ul><ul><ul><li>Why should we stop getting grades at age 21? </li></ul></ul>
  7. 7. Reasons to hate differentiation <ul><li>[Reason – 3] I am just too nice to implement 20-70-10 </li></ul><ul><ul><li>Protecting under-performers always backfires. </li></ul></ul><ul><ul><li>The worst thing is, it affects people who are performing </li></ul></ul><ul><ul><li>The awful thing is that often firing happens when the under-performers are in their late forties or fifties. </li></ul></ul><ul><li>[Reason – 4] Differentiation pits people against one another and undermines teamwork </li></ul><ul><ul><li>Differentiation rewards those members of the team who deserve it </li></ul></ul><ul><ul><li>It only annoys under-performers </li></ul></ul>
  8. 8. Reasons to hate differentiation <ul><li>[Reason – 5] Differentiation is fine for the top 20% and the bottom 10%, because they know where they are going. But it is enormously demotivating for the middle 70%, who end up living an awful kind of limbo. </li></ul><ul><ul><li>It actually ensures top 20% need to increase the top level </li></ul></ul><ul><ul><li>Provides opportunity to coach/groom the 70% (especially the top ones) who are aspiring to get into the top 20% </li></ul></ul><ul><ul><li>Creates challenge across various levels </li></ul></ul><ul><li>[Reason – 6] Differentiation favors people who are energetic and extroverted and undervalues people who are shy and introverted, even if they are talented </li></ul><ul><ul><li>World generally favors who are energetic & extroverted </li></ul></ul><ul><ul><li>There are professions for everybody </li></ul></ul>
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