Friday, September 16, 2005

Bringing Good Things To Life: Jack Welch’s “Winning”

I must admit at the outset of this posting that I have never been a huge fan of Jack Welch - or of GE, for that matter. At one point in my life, I lived in Lynn, MA – very much a GE company town. I knew many neighbors - men and women who had given their whole careers to GE (or, to be more precise, “The GE,” as denizens of Lynn were wont to say) – without much to show for it at the end of the day except for a pension and a pat on the back. I recall the turmoil over plant closings, lay-offs, strikes and contretemps between the workers and “Neutron Jack.” More recently, I have known employees of GE in the executive ranks – Renaissance Men – who have found the GE culture to be stultifying and not a healthy place for them to express their creative and entrepreneurial passions. So, I was skeptical when I saw that Jack Welch had penned another book on business. I did not intend to read the book, but changed my mind after several colleagues whose opinion I respect told me that it was worth reading. They were right.

Harper Business, an Imprint of Harper Collins Publishers, is working hard to increase their market share of the business publications sector. They clearly have a winner in Jack Welch’s latest offering. “Winning” is the most transparent of the writing I have read from Jack Welch. In the course of describing winning moves and strategies – at GE and in like-minded companies – Welch does not hesitate to point the finger at himself for lapses in judgment and mistakes along the way during his long tenure with GE. His genuine transparency made the book more readable to me than it would otherwise have been, and softened my view of Jack as an executive and as a human being. It does not hurt that Welch grew up on Boston’s North Shore and is a lifelong Red Sox fan! That fact covers a multitude of sins!

In the years since he stepped down as CEO of GE, Welch has traveled the world – speaking and consulting to a wide range of audiences and businesses. The structure of this book is that he has taken the frequently asked questions he has encountered in his travels, and grouped the questions and his responses under three broad categories: Your Company, Your Competition and Your Career. While I found the entire book to be worthwhile and full of informative stories and ideas, I will concentrate on sharing insights from three sections of the book I found to be particularly compelling.

In the chapter on Strategy entitled “It’s All In The Sauce,” Welch makes the following observations:

The first step of making strategy real is figuring out the big “aha” to gain sustainable competitive advantage – in other words, a significant, meaningful insight about how to win. To do that, you need to debate, grapple with, wallow in, and finally answer five sets of questions.

The five slides we’re going to look at here are a way to test you strategy . . .

SLIDE ONE – What The Playing Field Looks Like Now

Who are the competitors in this business, large and small, new and old?

Who has what share, globally and in each market? Where do we fit in?

What are the characteristics of this business? Is it commodity or high value or somewhere in between? Is it long cycle or short? Where is it on the growth curve? What are the drivers of profitability?

What are the strengths and weaknesses of each competitor? How good are their products? How much does each one spend on R&D? How big is each sales force? How performance-driven is each culture?

Who are this business’s main customers, and how do they buy?

SLIDE TWO – What The Competition Has Been Up To

What has each competitor done in the past year to change the playing field?

Has anyone introduced game-changing new products, new technologies, or a new distribution channel?

Are there any new entrants, and what have they been up to in the past year?

SLIDE THREE – What You’ve Been Up To

What have you done in the past year to change the competitive playing field?

Have you bought a company, introduced a new product, stolen a competitor’s key salesperson, or licensed a new technology from a start-up?

Have you lost any competitive advantages that you once had – a great salesperson, a special product, a proprietary technology?

SLIDE FOUR – What’s Around The Corner?

What scares you most in the year ahead – what one or two things could a competitor do to nail you?

What new products or technologies could your competitors launch that might change the game?

What M&A deals would knock you off your feet?

SLIDE FIVE – What’s Your Winning Move?

What can you do to change the playing field – is it an acquisition, a new product, globalization?

What can you do to make customers stick to you more than ever before and more than to anyone else?

(pages 172-180)

* * * * *

In the section on Mergers and Acquisitions, Welch shares salient observations drawn from the successes and mistakes he made while steering the ship at GE. He warns of seven common pitfalls. His point about the importance of post-acquisition integration and cultural fit strikes me as particularly poignant. I have observed too many integrations turn into disasters because not enough attention had been paid to the intangibles and issues of incompatible value systems. (pages 220-221)

Finally, I felt that in the section about The Right Job, he offers a very succinct and helpful chart to help someone contemplating a job transition to assess the pros and cons of a new job opportunity. (page 257)

If you have not yet taken the time to read this insightful book, I add the weight of my recommendation.



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