Two decades ago, there was one industrial guru above other, when it came to business influencers. At least in the America centered World. That man was Jack Welch, the CEO of General Electric (GE) from 1981 to 2001. Many of his former subordinates became executives or CEO of other major companies. Fortune magazine called Jack Welch ”the Manager of the Century, Business Week called him ”an Icon of American Business”.
Was he really so brilliant? Are his teachings still relevant? Some, yes. Some visions may have gone out of date. ”No other management book will ever be needed”, Warren Buffett himself claimed on Winning. I’m not so certain.
The book Winning has three big themes: Optimistic outlook, Candor and Executive training programs. It also includes a highly interesting list of sins on mergers and acquisitions. But above all, Welch emphasizes the importance of having the right people on board – and keeping them motivated. Without the right people, engaged, your company has but a little chance to be in the winning side.
Welch gives sound career advice. For instance, you should never consider yourself a victim. Even if you get sacked for no personal reason and actually are the victim somehow – don’t act as one. Move on, there is nothing good in dwelling in self pity, blaming others – even if they actually would deserve to pay for your misfortunes. Having a positive attitude is the first key element of a successful career. Very few employers want to hire negative people on their staff.
Welch uses the term Candor a lot. According to the author, none of the other principles will work unless you are in a candid environment as opposed to mean spirited. With candor or candid environment, you can have honest and open evaluations in your company, team or organization. People know where they stand, thanks to the candor in your organization.
As so many of Jack Welch’s former executives succeeded in the later career, it is interesting to learn more about Welch’s thinking behind GE’s Executive Training Programs. One element is be a company which the best talents want to join in. According to Welch, he got the raw idea was from Pepsi, but then later develop it for GE. Welch had a hidden agenda with his executive training program: ensuring, that they always had someone ready to step in, when ever they lost a great leader.
Winning inspiring tips on budgeting, differentiation, leadership, hiring and managing people, dealing with change, crisis management, start-ups, finding the right job, on how to get promoted and dealing with a bad boss, balancing life and career – and yes, mergers and acquisitions.
Welch instructs to that candidates should pass these three screens, first:
– Do they have integrity? Are they telling the truth and keeping their word?
– Are they intelligent? Do they have enough curiosity and breadth of knowledge? to lead other smart people.
– Are they mature? Are they able to handle stress and setbacks, respect other’s emotions? Can they be confident without being arrogant? Do they have a sense of humor?
According to Welch, ”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.”
Then, there are the four E’s and a P. While hiring at GE, Welch looked for people with positive Energy. That is, thriving on action, relishing change, making friends easily, loving work, play and life. Also, he looked for people, who could Energize others. A great recruit should also have Edge. That is, having the ability to make tough decisions, even when all the information isn’t in. Being able to Execute is also vital. That is, being able to take the decision and make things happen, overcoming all obstacles to complete the task. And the P? Passion. The recruit should be excited about her/his work, learning and growing, not to mention helping other to win.
Senior level leaders should have four additional abilities: Being Authentic. That is, being bold and decisive, yet real and likable. You should definitely not be a phony, not playing a part or role that’s not really them. Welch also looked for visionaries. Those, who can see the future and anticipate what most don’t expect – the ability to see around corners.
Strong and successful leaders surround themselves with people smarter than themselves. With this, I totally agree with Welch. When ever I see the opposite in business or politics, I smell big trouble.
One thing that should be respected more in other parts than the US, is honoring comebacks. Those, who have been knocked down and beat up badly, but recovered, bouncing back to run even harder. Those, who Welch calls people with Heavy-Duty Resilience.
The most important question in job an interview is why the candidate left his previous job, and the one before that. According to Welch, this tells you more about them than almost any other piece of data.
On Crisis Management
Welch has a few basic assumptions, that will certainly help crisis management:
– 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.
Welch has his own eight rules of leadership:
1. Relentlessly upgrade your team. In every encounter with them, evaluate, coach, and build self-confidence.
2. Instill the vision.
3. Spread energy and optimism.
4. Establish trust by being candid, transparent and giving credit where it’s due.
5. Make the unpopular decisions.
6. Probe and push. Make sure your questions are answered with action.
7. Inspire risk-taking and learning by doing both yourself.
Do you celebrate enough, Welch asks his audiences. Almost no one raises a hand, he told.
On managing people
Under Welch, GE started to have workouts, where the staff could speak their minds. A middle-aged appliance worker had an eye-opening thing to say: ”For twenty-five years, you paid for my hands when you could have had my brain as well – for nothing.”
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 with candor and action, from trouble-makers to big-headed stars.
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.
On mergers and acquisitions
During his active career, Jack Welch made thousands of mergers and acquisitions. Instead of focusing on accounting and finance, one should contemplate on the cultural change that the merger and/or acquisition will bring about. Focus on the people or you are likely fail. Big time.
The six sins of mergers and acquisitions:
1. Beware any Merger of Equals. In very few industries this is a norm and it works. Welch mentions exceptions to his rule being e.g. consultancy or law firms. The problem with equal merging companies is the question of either party’s willingness to adopt the practices, policies, or people of the other. Who’s in charge? After spending months on dueling over power, mergers of equals routinely come undone over that question.
2. The cultural fit of two companies is as important as strategic fit. Some cultures do not combine, only combust. Even if a merger or acquisition seems to make perfect sense regarding products, technologies, and numbers, a merger could end up being disastrous – if the two merging companies operate with completely different values.
3. Beware of Reverse Hostage situation. Sometimes the acquired company is virtually in charge after the negotiations. That may well happen, if the acquirer wants a company a bit too badly and starts to make concessions after another. Don’t end up asking: “Why did I pay so much for something I don’t really own?”
4. Be Bold. Integration process should ideally be complete within 90 days after. Otherwise, uncertainty can become fear. And that is bad news, both for morale and operations.
5. Don’t be Conqueror. Learn and listen. By marching your troops into your new territory and installing your people everywhere, you may loose significantly. For the new and expanded company to thrive, it needs the best team. Even if that means having to let go of some of your own. That is the price you have to pay.
6. Beware of Deal Heat. Don’t pay too much. Many times, companies end up paying a 20%, 30% or even higher premium. There is no last best deal, only overheated desire – pumped up by bankers and other bidders – that makes it feel that way.
On Work-Life Balance
Welch is brutally direct – honest? – when writing about work-life balance. Talk is talk, but even if in real life your boss may be concerned about your personal life, he’s more concerned about the company winning in a competitive work environment. According to Welch, it is important to prioritize and give your hundred percent to what you are doing at the moment. When you are at work, stay focused on your work. At home, make every moment with your family matter. That notion is rather outdated, when you get messages and meeting requests via email, Whatsup, Slack, Zoom, MS Teams, Signal, Messenger, SMS…
An important notion, anyway. Your employer will not bring flowers on your grave. Few people on their dying bed regret working too little. Many ponder, whether they should have spent more quality time with their love ones. Welch, however is more pragmatic in his approach. Luckily his company view seems to value, that people actually have private lives, too. Though a bit hard to swallow, reading Welch’s slightly modernised 1960’s ideas on balancing work life and personal, is eye-opening.
No wonder it has been hard for women – or modern men with family – to advance in the old fashioned business culture.
After explaining, how the only way succeed is to sacrifice almost everything for you company, it’s a bit hollow to write, that once you’ve set your life priorities, get comfortable just saying “No” to things that would take away from your priorities.
Winning not a Business Bible, you shouldn’t take it by the word. Same goes for the Bible, mind you. However, the book is inspiring for us who want to see growth around us, especially in our businesses. And reach for being better and better, every day. The goal being: Winning. It’s rarely a zero-sum game, anyway.
Winning: The Ultimate Business How-To Book
By Jack Welch & Suzy Welch (Harper Collins, 2005)
Review by Jan Erola