It took me forever to get through this one, but I really loved a lot of Welch’s practical advice and hard-won wisdom. I took detailed notes for me and you (lucky you).
No, I don’t agree with everything in it, and you probably won’t either. But as they say, eat the fish and spit out the bones. I honestly believe there is something for everyone in a book like this. Take a look and let me know what you think.
First the official description, then my notes:
Jack Welch knows how to win. During his forty-year career at General Electric, he led the company to year-after-year success around the globe, in multiple markets, against brutal competition. His honest, be-the-best style of management became the gold standard in business, with his relentless focus on people, teamwork, and profits.
Since Welch retired in 2001 as chairman and chief executive officer of GE, he has traveled the world, speaking to more than 250,000 people and answering their questions on dozens of wide-ranging topics.
Inspired by his audiences and their hunger for straightforward guidance, Welch has written both a philosophical and pragmatic book, which is destined to become the bible of business for generations to come. It clearly lays out the answers to the most difficult questions people face both on and off the job.
Winning is great. It’s better for you, your family, your community, and the economy.
The best teams win, so find the best players.
Don’t overthink and underact.
“The mission announces exactly where you are going, and the values describe the behaviors that will get you there.” The mission statement answers how you intend to win. Be super specific about what those values actually mean otherwise they are meaningless.
The importance of candor
Candor is essential to winning. It saves everyone time and money and gets to the core issues quickly. It also generates more ideas faster. People aren’t candid because they are lazy and afraid. It’s easier not to be honest, but it kills success.
There needs to be an open culture where everyone feels safe to speak their mind and anyone can debate and critique at will. If people on the ground level do not feel like it safe to speak their minds, then the ground level problems will keep happening.
Differentiation is vital to success. Make a clear and meaningful distinction between winners and losers. Pour more resources into what’s working and improve, sell, or eliminate what’s not. “Cultivate the strong and cull the weak.”
Put people in these categories: top 20, middle 70, and bottom 10. Shower praise and rewards on the top 20. Motivate and equip the 70 to get better. Fire the bottom 10 – if you have clear expectations and honest evaluations they should know they don’t belong and hopefully leave on their own initiative. Tell them where they stand and that they have a year left before they have to go, and usually they’ll exit before then. Everyone should know what’s expected and where they stand. It’s like school. You get grades for a reason. “Grades guide us.” “Protecting underperformers always backfires.” It takes courage to implement differentiation but it’s a service to everyone.
- Leaders relentlessly upgrade their team using every encounter as an opportunity to evaluate, coach, and build self confidence. There is no event in your day that cannot be used for people development. Leaders should be like gardeners walking around with water and fertilizer and only occasionally weeding.
- Leaders make sure people not only see the vision; they live and breathe it. They repeat it constantly, it is clear, and it is so ingrained in others that you could wake them from their sleep and they could repeat it to you. Reward those who love the vision. What gets rewarded gets repeated (by them and others).
- Leaders get into everyone’s skin, exuding positive energy and optimism. Energy and emotions are contagious. Get out of your office and into everyone’s skin. Go around carrying a good virus. The right attitude makes work more than work.
- Leaders establish trust with candor, transparency, and credit. They don’t keep secrets, they keep their word, and they are open about how things are going and how people are doing. “When you made a leader, you weren’t given a crown. You were given a responsibility to bring out the best in others. For that, your people need to trust you.”
- Leaders have the courage to make unpopular decisions and gut calls. “You are not a leader to win a popularity contest. You’re a leader to lead.”
- Leaders probe and push with a curiosity that borders on skepticism, making sure their questions are answered with action. Individual contribution is about knowing the answers. Leadership is about asking the questions. Leaders should constantly be asking what if, why not, and how come? “Just because you’re a leader, saying something doesn’t mean it will happen.” Ultimate responsibility for what actions the organization does or doesn’t take falls on the leader. “If you don’t make sure your questions and concerns are acted on, it doesn’t count.” Encourage debate. Ensure action.
- Leaders inspire risk taking and learning by setting the example. They share their past experiences of failure and model a growth mindset. “In the best case scenario, all your people will be smarter than you. It doesn’t mean you can’t lead them.”
- Leaders celebrate! It doesn’t have to be some forced cheesy party. It’s doing things for others that they love like buying them tickets or giving them gifts. Things they actually want. “Celebrating makes people feel like winners and creates an atmosphere of recognition and positive energy.”
How to hire the right people
“Nothing matters more in winning than getting the right to people on the field.”
- They have positive energy
- They energize others
- They have edge – they are willing to pull the trigger with imperfect information
- They execute – some people have the first three but not the 4th, which makes them relatively useless to the organization “Winning is about results.”
- They have passion – They really care about everyone winning
If hiring a leader, all of the above PLUS:
- They have to have authenticity, likeability, and emotional intelligence. “Leaders cannot have an iota of fakeness.”
- They have to be able to see around corners – having a sixth sense about the future and the best decisions to make
- They surround themselves with people who are smarter and better than they are
- They must be resilient – getting up quickly after falling, using mistakes as stepping stones
“Just remember, every hiring mistake is yours.”
Jack’s top hiring question: “What was it that caused you to leave your last job and the one before that?” Dig deep on this. “Why a person has left a job tells you more about them than almost any other data.”
“Friendship and experience are never enough.”
Companies are people, so managing people well is the most important thing.
- ELEVATE HR to a position of power and primacy. “The head of HR should be the second most important person in the organization.” They are there to help managers manage well.
- Use a vigorous evaluation system. It should be clear and simple. It should have regular face to face evaluations and should be constantly monitored for effectiveness.
- Use money, recognition, and training to motivate and retain. Employees should be rewarded in the wallet and the soul. Help the right people want to stay.
- Face straight into charged relationships. Principles first. Unions can divide. Stars can become monsters. No one person should ever become bigger than the company. Everyone should always be replaceable and you should be ready to replace anyone within 8 hours. You should always have a slate full of people ready to move up. Evaluate people based on who they are now, not who they were then. Don’t let anybody coast. Don’t let disruptors poison the organization.
- Fight gravity and treat the middle 70 like the heart and soul of the organization. DO NOT take them for granted. Be proactive about coaching, rewarding, training, etc. Don’t treat everyone in the middle 70 the same, either. Within that group there is a top 20 and a bottom 10. Failing to recognize the top performers only encourages them to seek employment elsewhere.
- Design the organization chart to be as flat as possible, with blindingly clear reporting relationships and responsibilities. Everyone should know where they stand, who they report to, and what’s expected of them. Who is responsible for what results? Every layer in an organization adds cost, complexity, and confusion. It slows everything down. “Make your company 50% flatter than you feel comfortable with.”
Two principles are important. The first is no surprises. The second is minimal humiliation.
Fire for lack of integrity right away and make sure everyone knows why that person was let go so that their bad behavior is clearly communicated to be unacceptable in the organization.
Three typical firing mistakes:
- Moving too fast – the person should never be surprised when they’re being let go. There should be ample warning and clear performance benchmarks.
- Not using enough candor – you have to have the courage to be honest
- Taking too long – the dead man walking effect. If everyone knows it’s inevitable, what are you waiting for?
“Every employee who leaves is a spokesperson for the company.”
Try to help them land their next job if possible; somewhere that is a better for who they are. Your goal should be to give them a soft landing and an easy, expected exit.
Change: mountains do move
“You do need to change, preferably before you have to.”
- Attach every change initiative to a clear purpose or goal. Don’t change for change’s sake.
- Hire and promote only true believers and “get on with it” types. A lot of people talk change but few actually embrace it.
- Ferret out and get rid of resistors, even if their performance is satisfactory. “They foster an underground resistance and lower the morale of the people who support change. They are change killers. Cut them off early.”
- Look at car wrecks. Take advantage of the inevitable misfortunes of others. Seize every opportunity.
Do these and change will become business as usual. “Change should be a relatively orderly process.”
- Assume the problem is worse than it appears. Assume it will only get worse, not better. Assume it’s up to you to own it and fix it.
- Assume that everyone will eventually find out everything. Communicate first and clearly to avoid the telephone game / information degradation effect. “The more openly you speak about the problem, its causes, and its solutions, the more trust you earn from everyone watching – inside the organization and out.”
- Assume you and your organization’s handling of the crisis will be portrayed in the worst possible light. If you don’t own up and speak out, your silence will be taken as an admission of guilt.
- Assume there will be changes in processes and people. Almost no crisis ends without blood on the floor. You’ve got to make to changes to fix the root issues and clean up your mistakes.
- Assume your organization will survive and ultimately be stronger for what happened.
- Have tight controls to ensure everything is done the right way.
- Have good internal processes like hiring, reviews, and training.
- Create a culture of integrity.
Crises are often like snowballs. They start small, pick up speed, get bigger, and eventually end.
Don’t forget about the lessons that the crisis taught you. Use it as a kind of immunity going forward.
You need a big AHA in order to win. It is a significant and meaningful insight about how to win.
- What does the playing field look like now?
- What has the competition been up to?
- What have you been up to?
- What scares you most? How could you lose? You have to assume that your competitors are better than you and getting better.
- What’s your winning move?
You have to have the right people in the right places with iterative best practices for your winning strategy to work. Best practices can come from any industry, not just your own.
A flexible operating plan based on winning is better than an inflexible budget based on bonuses.
Making organic growth possible for new ventures
Spend plenty upfront and put the best, hungriest, and most passionate people in leadership roles. Act as if it’s going to win big. Startups need support and cheerleading. Promote it like it’s the next big thing. Be willing to fail. You doom it from the start if you don’t go all in. Err on the side of freedom. Lengthen the leash as much as you can do wisely. Let it be autonomous instead of part of your mothership.
Mergers and acquisitions
They can be difficult, but also hugely rewarding. They are a way to grow fast. 1+1=3.
Pitfalls: 1) believing a merger it equals can actually occur 2) failing to address cultural fit. 3) becoming hostage to the demands of the other 4) integrating too timidly (once the deal is made, it should take 90 days or less) 5) one side dominating the other 6) paying too much – beware of deal heat, the pressure to overspend. There will be other deal opportunities down the road 7) resistance
“Six sigma is a quality program that improves your customer’s experience, lowers your cost, and builds better leaders by reducing waste and inefficiency and designing a company’s products and internal processes so that customers get what they want, when they want it, and when you promised it.” It’s about delivering consistent results. “Variation is evil.”
Finding the right job
You find it through trial and error, not some predefined career path. The better you are, the easier it is to find it. And yes, money matters.
Signals of a good fit: you like the people you work with, there are shared values and sensibilities, you have the freedom to be yourself, you have opportunities to grow and learn and get promoted, the business itself is going somewhere good, the job is a natural fit for your passions and talents and the work feels meaningful, the money is right.
You have to want it. Deliver great performance beyond what is asked. Be the obvious candidate for moving up. Make everyone around you better, including your boss. No bad surprises. Participate in and exemplify the best parts of the company culture. You should be bigger than the role and it should be obvious. Be likeable. Be great to the people under you, stay positive and spread it around. Find good mentors. Serve people instead of using people. Volunteer for new initiatives. Stay upbeat in the face of setbacks.
Don’t make your boss use political capital to champion you or defend you. Your boss should never need to apologise for you. Don’t be cagey and guarded with your boss.
What to do with a bad boss
Key thing: don’t let yourself be a victim.
Questions to ask:
- Why is my boss acting like a jerk? Are they that way to everyone, or just me? Am I the problem? Most people have a better view of themselves than others do. Do you have authority issues?
- What’s the endgame for my boss? Are they most likely on their way out? What are they actually about?
- Are the trade-offs I’m making to work with this boss worth it? If yes, stay. If no, go.
The better you are, the longer your leash. Most bosses care more about the bottom line than your work-life balance but will give you room to roam if you consistently get results.
The greater your results, the greater your flexibility.
The more you earn, the easier it is to have work life balance because you can buy a lot of it.
Work-life balance is ultimately your responsibility, not your bosses.
- Keep your head in whatever game you’re at. When you’re at work, be fully at work. When you’re at home, be fully at home.
- Have the mettle to say no to things outside of your work-life plan.
- Make sure your work-life balance plan doesn’t leave you out. Make time for rest and self-care so you can sustain yourself over the long haul and not burn out.