Jack Welch in his own words: Winning

Jack Welch, ex-CEO of General Electric

To baby boomers and Gen-X, this a corporate titan who’s name you will remember. He led a renaissance in GE, driving its market capitalization from $14B to $400B+ 20 years later. He famously whittled down GE’s portfolio (think: corporate strategy) to be #1 or #2 in any industry they competed in. He smartly used the General Electric Financing arm as a quasi-bank, giving the conglomerate a sterling AAA credit rating for many years.    

He was continually on the cover of Fortune, BusinessWeek, and Forbes magazines.  

Quotes from Winning

Yes, this is the title of his famous book, Winning (affiliate link) from 2005. Some of these are truisms, some might come across as cold and calculated. Some you might not agree with, that’s fine. Still, lot of good stuff here.

Everything in blue font are his words from Winning:

1. I’ve been asked literally thousands of questions. But most of them come down to this: What does it take to win?

1. Mission and Values, Candor

1. An effective mission statement basically answers one question: How do we intend to win in this business?
2. Setting the mission is top management’s responsibility.
3. (#4 through #8) are from Banc One – led by Jamie Dimon at the time) Never let profit centers conflicts get in the way of doing what is right for the customer.
4. Give customers a good, fair deal. Great customer relationships take time.
5. Always look for ways to make it easier to do business with us.
6. Communicate daily with your customer. If they are talking to you, they can’t be talking to your competitor.
7. We should know our business best. We don’t need consultants to tell us what to do.
8. Lack of candor basically blocks smart ideas, fast action, and good people contributing all the stuff they got. It’s a killer.
9. To get candor, you reward it, praise it, and talk about it. Most of all, you yourself demonstrate it in an exuberant and even exaggerated way.

2. Differentiation: Cruel and Darwinian? Try fair and effective 

1. A company only has so much money and managerial time. Winning leaders invest where the payback is the highest. They cut their losses everywhere.
2. Basically, differentiation holds that a company has two parts, software and hardware. Software is simple – it’s your people. Hardware – depends. If you’re a large company, your hardware is the different businesses of your portfolio. If you’re a smaller company, hardware is your product lines.
3. Every company has strong businesses or product lines and weak ones and some in between. Differentiation requires managers to know which is which and invest accordingly. To do that, you have to have a clear-cut definition of “strong.”
4. When differentiation is working [in performance management], people know where they stand.
5. So why would we stop getting grades [performance reviews] at age 21? To prevent meanness? Please!
6. Protecting under-performers always backfires.

3. Leadership: It’s not just about you

1. Leaders relentlessly upgrade their team, using every encounter as an opportunity to evaluate, coach, and build self-confidence.
2. Take every opportunity to inject self-confidence in those who have earned it. Use ample praise, the more specific the better.
3. There were times I talked about the company’s direction so many times in one day that I was completely sick of hearing it myself.
4. Leaders get into everyone’s skin, exuding positive energy and optimism.
5. Leaders never score off their own people by stealing an idea and claiming it as their own.
6. Leaders establish trust with candor, transparency, and credit.
7. Leaders have the courage to make unpopular decisions and gut calls.
8. You are not the leader to win a popularity contest – you are the leader to lead.
9. Just because you’re the boss doesn’t mean that you’re the source of all knowledge.
10. Leaders celebrate. Work is too much a part of life not to recognize moments of achievements.
11. Over time, many of us develop an instinct for integrity. Just don’t be afraid to use it.
12. Effective people know when to stop assessing and make a tough call, even without total information. Little is worse than a manager who can’t cut bait.

4. Hiring, people management

1. The best leaders in brutally competitive environments have a sixth sense for market changes. They can imagine the unimaginable.
2. A good leader has the courage to put together a team of people who sometimes make him look like the dumbest person in the room.
3. A good rule of thumb is NOT to hire someone into the last job of his or her career, unless it’s to be head of a function or CEO.
4. Don’t beat yourself up if you get hiring wrong some of the time. Just remember, the mistake is yours to fix.
5. Elevate HR to a position of power and primacy in the organization. . . If you managed a baseball team, would you listen more closely to the team accountant or the director of player personnel?
6. The best HR people are a hybrid: one-part pastor who hears all the sins and complaints without recrimination, and one-part parent, who loves and nurtures, but gives it to you fast and straight when you’re off track.
7. Very few companies have meaningful evaluation systems in place. Yet people evaluation systems are too often just exercises and paper pushing.
8. You simply cannot manage people to better performance if you do not give candid, consistent feedback through a system that is loaded with integrity.
9. Create effective mechanisms – read: money, recognition, and training – to motivate and retain.
10. Plaques and public fanfare have their place. But without money, rewards lose a lot of their impact.
11. A winning company does not let good people walk out the door for lack of recognition, financial or otherwise.
12. Companies cannot promise their people lifetime employment. But they can promise to give their people every chance for employability, skills that will make them more attractive if they are forced to part ways.
13. A star’s ego can be a dangerous thing. I’ve seen talented young people promoted too quickly and their let their ambition spin out of control.
14. Ideally, your star will be replaced within 8 hours. This sends the message that no single individual is bigger than the company
15. Most work in organization gets done by the people in the middle 70, those solid performers who don’t quite shine but work hard and well, and perhaps could shine with enough care and attention. You can’t allow the middle 70 toil away in a form of obscurity, like a well-behaved, mild mannered middle child in the family of attention-grabbing prodigies and troublemakers.
16. The middle 70 matters a lot. It is the heart and soul, the central core, of any company. If you’re going to manage people well, you simply cannot forget the majority of them.
17. Make your company flatter. Manager should have 10 direct reports at the minimum and 30 to 50% more if they are experienced.
18. Every employee, not just the senior people should know how the company is doing.
19. The three ways that managers get firing wrong: moving too fast, not using enough candor, and taking too long.
20. Every person who leaves goes on to represent your company. They can badmouth or praise.

5. Change: Mountains to move

1. Attach every change initiative to a clear purpose or goal. Change for change sake is stupid.
2. If a company has been through enough change programs, employees consider you like a gas pain. You’ll go away if they just wait long enough.
3. By my estimate, real change agents comprise less than 10% of all business people. These are the true believers who champion change, know how to make it happen, and love every second of the process. The rest are resistors.
4. [For a crisis], first assume the problem is worse than it appears. Second, assume there are no secrets in the world and that everyone will eventually find out everything. Third, assume you and your organization’s handling of the crisis will be portrayed in the worst possible light. Fourth, assume there will be changes in process and people.
5. Almost no crisis ends without blood on the floor; assume your organization will survive, ultimately stronger for what happened.

6. Strategy

1. When it comes to strategy, ponder less and do more.
2. [For strategy], first come up with a big “ah-ha” for your business, a smart, realistic, relatively fast way to gain a competitive advantage. Second, put the right people in the right job to drive the big a-ha forward. Third relentlessly seek out the best practices to achieve your big a-ha whether inside or out, adapt them, and continually improve them.
3. Strategy means making clear-cut choices about how to compete. You cannot be everything to everybody, no matter what the size of your business or how deep your pockets.
4. If you’re headed in the right direction, and are broad enough, strategies don’t really need to change all that often.
5. Any strategy, no matter how smart, is dead on arrival unless the company brings it to life with people – the right people.
6. Best practices are not only integral to making strategy happen, they are a sustainable competitive advantage if you continually improve them, with IF being the key word here. That’s not a mindset, it’s a religion.
7. I don’t want to oversimplify strategy.  But you shouldn’t agonize over it.  Find the right “ah ha” and set the direction, put the right people in place, and work like crazy to execute better than everyone else, finding best practices and improving on them.

7. Budgeting: Reinventing the ritual

1. The budgeting process at most companies has to be the most ineffective practice in management. It sucks the energy, time, fun, and big dreams out of an organization. It brings out the most unproductive behaviors in an organization, from sandbagging to settling for mediocrity.
2. The people in the field are operating with one simple goal, albeit unstated: to minimize their risk, and maximize their bonus.
3. What good is beating targets you set in a windowless room?

8. Organic growth: So you want to start something new?

1. Managing a $50,000 new product line in its first year is harder than managing a $500M business in its 20th year.
2. [For growth] Put your best, hungriest, and most passionate people in leadership roles. For a new business to succeed, it has to have the best people in charge, not the most available.
3. Startups need cheerleading – constant and loud. Admittedly, there is one big problem with making a huge scene about a new venture. How dumb you look if it fails.
4. New ventures should report at least two levels higher than sales would justify.  If possible, they should report directly to the CEO.
5. Err on the side of freedom; get off the new venture’s back.
6. The best way to get autonomy is to earn it.

9. Mergers and acquisitions: Deal heat and other deadly sins

1. Mergers do fail.
2. Merger success is never a layup.
3. The first pitfall is believing that a merger of equals can actually occur. Despite the noble intentions of those attempting them, the vast majority of them self-destruct because of the premise.
4. Cultural fit is trickier. . . In reality, of course, companies have unique and often different ways of doing business.
5. It is uncertainty that causes organizations to descend into fear and inertia. The objective should be full integration within ninety days of the deal close.

10. Six Sigma: Better than a trip to the dentist

1. Done right, Six Sigma is energizing and incredibly rewarding. It can even be fun.
2. A huge part of making your customers sticky is meeting or exceeding their expectations, which is exactly what six sigma does. One thing that is sue to kill stickiness is inconsistency in your services or products.
3. Six Sigma is not about averages. It’s about variation and removing it from your customers’ interface with you.
4. Perhaps the biggest but most unheralded benefit of Six Sigma is its capacity to develop a cadre or great leaders.

11. The right job: Find it and you’ll never really work again 

1. Yes, trade-offs, because very few jobs are perfect.
2. You need to find “your people,” the earlier in your career the better.  No job is ideal without the presence of shared sensibilities.
3. Any new job should feel like a stretch, not a layup.
4. Working for some companies is like winning an Olympic Medal. For the rest of your career, you are associated with great performance and success. The consulting firm McKinsey & Company is like that.
5. Every job you take is a gamble that could increase your options or shut them down.
6. Authenticity may be the best selling point you’ve got.
7. Finding the right job takes times and experimentation and patience. After all, you have to work at something for a while before you know if you can even do it, let alone if it feels right. 
8. Finding the right job gets easier and easier the better you are. Maye that sounds harsh, but it’s the reality. At the end of the day, talented people have their pick of opportunities. The right jobs find them.

12. Getting promoted: sorry, no shortcuts

1. How does a person get promoted?  The first answer is luck. All careers, no matter how scripted they appear, are shaped by some element of pure chance.
2. [To get promoted] Do deliver sensational performance, far beyond expectations, and at every opportunity expand your job beyond its official boundaries.
3. [To get promoted] Don’t make your boss use political capital in order to champion for you.
4. The most reliable way to sabotage yourself is to be a thorn in your organization’s rear. 
5. The boss-subordinate relationship is easy to neglect. Your boss is in your face, and your peers are on your mind, while your subordinates do what you say.
6. Get on the radar screen by being an early champion of your company’s major projects and initiatives.
7. There is no one right mentor. There are many right mentors. Some mentoring relationships last a lifetime, while others lasted just weeks.
8. Don’t be a downer. Have a sense of humor, be fun to hang out with. Don’t be a bore or a sourpuss. Don’t act important, or worse, pompous. 

13. Hard spots: That damn boss

1. The world has jerks. Some of them get to be bosses.
2. [The boss] may make you want to feel sorry for yourself. In any business situation, seeing yourself as a victim is completely self-defeating.
3. When you get a bad boss, first find out if you are the problem. That’s not easy, but in many cases, a bad boss is just a disappointed one.
4. Assess your trade-offs and ask, “Is it worth it?”  If the answer to the question is “no”, then start constructing an exit plan that gets you out the door with as little damage as possible.

14. Work life balance

1. Your boss’ first priority is competitiveness.
2. Most bosses are perfectly willing to accommodate work-life balance challenges if you have earned it with performance. The key word here: IF.
3. It’s not that bosses want you to give up your family or your hobbies. They’re just driven by the desire to capture all your energy and harness it for the company.
4. Keep your head in whatever game you’re at. . . In other words, compartmentalize.
5. Have the mettle to say “no” to requests and demand outside your chosen work-life balance plans.
6. Outside work, clarify what you want from life. 
7. At work, clarify what your boss wants, and understand that. If you want to get ahead, what he or she wants comes first. You can eventually get what you want, but the arrangement is negotiated in that context.
8. Make sure you work in a supportive culture where performance matters and you can earn flexibility chits with great results.  

Not just rainbows and ponies

Jack Welch got the the nickname “Neutron Jack” because of his willingness to make difficult decisions (read: layoff 100,000 people and close multiple factories) in his first few years in office. He canonized the HR practice of rank/rating employees, where the bottom 10% were let go.  New book out (haven’t read yet), which clearly takes a negative view of Welch’s legacy called, The Man who Gutted Capitalism (affiliate link), David Gelles, 2022.