Winning by Jack Welch - A Book Presentation

Disclaimer

Certain topics in the book had originally caused controversy.

All efforts have been made to ensure that the book underAll efforts have been made to ensure that the book under

review in this presentation is depicted in its original form and

without personal influence of the presenters except for logical examples.

Any error observed in content delivery is unintentional and regretted.

by Yousuf Zahid

[email protected]

A presentation on the book ‘Winning’ by Jack Welch

Sunday, March 27, 2011

[email protected]

"We are what we repeatedly do.

Excellence, then, is not an act, but a habit.”

Aristotle

“Winning isn’t everything,

it’s the only thing.”

Vincent Van Gogh

Jack Welch?Jack Welch?

So who is Jack Welch anyway?

John Francis "Jack" Welch, Jr.

b. November 19, 1935

PhD - Chemical EngineeringPhD - Chemical Engineering

Manager of the Century - Fortune

Former Chairman & CEO of GE

One of the three most admired business

leaders in the world - Financial Times

And what did Jack do that made him a “legendary” leader?

Jack Welch knew how to win.

Led the company to year-after-year success

around the globe, in multiple markets

against brutal competition.against brutal competition.

Market capitalization rose from

$13 billion to $400 billion making it the most

valuable and largest company in the world.

Honest, be-the-best style of management

became the gold standard in business.

With his relentless focus on people, teamwork & profits.

Now comes “the” BookNow comes “the” Book

No other management book will ever be needed. Warren E. Buffett

A candid and comprehensive look at how to succeed in business. Bill Gates

Critical Praise for Winning

A candid and comprehensive look at how to succeed in business. Bill Gates

...candid and accessible...insights and wisdom to share. Business Week

The right stuff. The Wall Street Journal

...smart, practical and not afraid to address tough subjects. Newsweek

Now is the time. New York Times

#1 Wall Street Journal and international bestseller

And do you remember what winning means?And do you remember what winning means?

Winning: –noun 1. the act of a person or thing that wins.

2. Usually, winnings. something that is won, especially money.

3. that wins; successful or victorious, as in a contest:

the winning team.

So what does it take to win?So what does it take to win?

Business is about people.

In fact, life is only about people.

At the end of the day, it is only

people that matter.people that matter.

People in companies

must find a way to win.

Winning is brutally hard but achievable.

This book offers no easy formulas.

There are none.

It, however, gives you guidelines to follow,

rules to consider, assumptions to adopt

and mistakes to avoid.

WINNINGWINNING

Lets begin the journey…

Welch has divided the book into four parts:

Company Attitude

The Company & its PeopleThe Company & its People

Managing Organizations & Competition

Your Career

Winning

What’s Ahead

So much hot air about something so real

An effective mission statement basically answers one question:

How do we intend to win this business?How do we intend to win this business?

Mission & ValuesMission & Values

Requires companies to make choices about people, investment people, investment & resources.resources.

Prevents them from falling into the common mission trap

of asserting they will be all things to all people at all times.

Mission statements balance the possible and the impossible.

Define Strengths & Weaknesses


Sense of Direction

Inspiration

ProfitabilityProfitability

Mission Statement

Top

Management


According to Welch, it is the defining moment for a company’s leadership.

Values are marching orders.

They are how the mission, the means to the endthe means to the end - winning.


Creating values should be iterative. Involve everybody.

Make them tangible, identifiable, real, clear.tangible, identifiable, real, clear.

Mission

StatementValuesWinning Proposition


Mission and values rupture due to the little crises of daily life in business

So no more hot air. Aim for real action.

Remember the tragic demise of Arthur Andersen and Enron?

The biggest dirty little secret in business

can·dor/kandər: - Noun, the quality of being open and honest in expression; frankness.

CandorCandor

can·dor/kandər: - Noun, the quality of being open and honest in expression; frankness.

CandorCandor

Candor is hard to implement

and is time consuming.

To get candor, you reward it, praise it

CandorCandor

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.

The Candor Effect

Ideas Pick

Cuts Cost!

CandorCandor

People Talk!

Get Idea Rich!

Ideas Pick

Pace!

Candor works because candor unclutters.

Cruel & Darwinian? Try fair and effective

D I F F E R E N T I A T I O ND I F F E R E N T I A T I O ND I F F E R E N T I A T I O ND I F F E R E N T I A T I O ND I F F E R E N T I A T I O ND I F F E R E N T I A T I O ND I F F E R E N T I A T I O ND I F F E R E N T I A T I O N

A company has only so much money & time.

Winning leaders invest where the

DifferentiationDifferentiation

Winning leaders invest where the

payback is the highest.

They cut their losses everywhere else.

Differentiation is a way to manage people

and businesses.

Welch suggests that differentiation should


Welch suggests that differentiation should

be linked to a candid performance appraisal

system and has advised to assess employees,

separating them into three categories.

Top 20%

Star performers

- rewarded and nurtured.

Middle 70%

Future stars, core workers

- train and cultivate them.


- train and cultivate them.

Bottom 10%

They have to go. Period.

So differentiate if you want the best people in your team.

Its transparent, fair and speeds up the whole process.

VoiceVoiceVoiceVoiceVoiceVoiceVoiceVoice&DignityDignityDignityDignityDignityDignityDignityDignity

Every brain in the game

&DignityDignityDignityDignityDignityDignityDignityDignity

In China, a young woman asked Welch

“how any businessperson in her country

could practice candor and differentiation

when only the voice of the boss is allowed?”

Voice & DignityVoice & Dignity

At a Work-Out session, Welch asked a

co-worker, “Why aren’t you asking those

questions to your own boss?” The answer

came, “I can’t bring that up. I’d get killed.”

Voice & DignityVoice & Dignity

Some people have better ideas than the others; some are smarter or more

experienced or more creative. But everyone should be heard and respected.But everyone should be heard and respected.

It’s not just about you

LEADERSHIP

… upgrade, evaluate, coach their team.

… make sure that people live & breathe the vision.

… radiate positive energy & optimism.

… establish trust with candor, transparency & credit.

LEADERS

LeadershipLeadership

… have the courage to make unpopular decisions

& gut calls.

… make sure questions are answered with action.

… inspire risk taking and learn by setting examples.

… celebrate.

Examples: Benazir Bhutto & Mian Muhammad Mansha

LeadershipLeadership

Question: Are leaders born or made?

Answer: Both

What winners are made of

Hiring

What is the one thing you

should ask in an interview

to help you decide whom

to hire?

HiringHiring

to hire?

Hiring good people is hard.

Hiring great people is brutally hard.

Test for Test for Test for

The Acid Test

HiringHiring

Test for

Integrity

Test for

Intelligence

Test for

Maturity

The 4E & 1P Framework

Positive

Energy

Positive

Energy

Can Energize

Others

Can Energize

Others

HiringHiring

Has an EdgeHas an Edge Can ExecuteCan Execute

PassionPassion

Ability to see around

corners

Hiring for the Top

HiringHiring

Encircled with smart

people

Authenticity

Heavy-Duty Resilience

Put it all together and you’ll hire a person who’s going to win!

You’ve got the right players. Now what?

People Management

According to Welch, HR is a package of parent & pastor

- Elevate HR to a position of power and primacy.

HR must have special qualities to help managers

People ManagementPeople Management

HR must have special qualities to help managers

build leaders and careers.

- Use a rigorous, non-bureaucratic evaluation system.

Example: Unilever Pakistan & Shell Pakistan

- Create effective mechanisms:

money, recognition and training:

to motivate and retain.


to motivate and retain.

- Face straight into charged relationships:

unions, stars, sliders and disrupters.

Example: Cellular Industry of Pakistan

- Treat the middle 70% like the heart

and soul of the organization.


- Design the org chart to be as flat as possible,

with blindingly clear reporting relationships

and responsibilities.

Example of Company where Middle 70% is taken for granted: Woodward

Example of Organization with Tall and Ineffective org structure: Police Dept.

The Welch Way: HR Business Model


Letting go is hard to do

Parting Ways

Parting of Ways - Reasons

Firings for Layoffs due Firings for

Parting WaysParting Ways

Firings for Integrity

Violations

Layoffs due to Economic Downturns

Firings for Non-

performance

THE PRELUDE

Characteristics of an effective

Clear and simple

Quantitative and qualitative criteria relating

Professional development


an effective employee

evaluation system

criteria relating directly

performance

Twice a year evaluation, in

formal, face-to-face sessions

development


So before you say THE word avoid So before you say THE word avoid three mistakes…three mistakes…

No Surprises


No Surprises

No Humiliation

No Procrastination

Example of Company where its done wrong: Geo TV

Mountains do move

Change

ChangeChange

ChangeChange

Technology

Change is an absolutely critical part of business.

You do need to change before you have to.

- Attach every change to a clear goal.

- Hire and promote only true believers and go-getters.

Welch advises to follow these four practices:

ChangeChange

- Hire and promote only true believers and go-getters.

- Search and remove the resisters, even if their performance is satisfactory.

- Look out for wrecks and exploit change.

Example of Company that exploited a Wreck: China Mobile (Zong)

From ohFrom oh--GodGod--no to yesno to yes--we’rewe’re--finefine

Crisis Management

Mistakes,

Controversies,

Blowups

Accidents, Theft,

Fraud

Roots of Roots of

Don't deny there's a problem, act.

Crisis ManagementCrisis Management

Socio-Economic &

Polito-Legal Turmoil

The Unthinkable &

The Unimaginable

Roots of Roots of CrisesCrises

- Worse than your imagination.

Assumptions which give a plan of action

to solve crises:


- Everyone will come to know.

- Media will crucify you.

- Systems and people must change.

- You will survive; becoming smarter and stronger.

Example of Company that survived and then flourished: PTCL

Example of Company that took all the wrong steps: Dewan Group

Crisis Radar for Pre-emptive Measures


It’s all in the sauceIt’s all in the sauce

Strategy

StrategyStrategy

Welch’s strategy approach in three steps:

- Come up with a big aha for your business.

- Put the right people in the right jobs.

- Seek out best practices to achieve the goal.

WHAT THE PLAYING FIELD LOOKS LIKE NOW

StrategyStrategy

- The competitors?

- The market share?

- Characteristics of this business?

- Strengths and weaknesses of competitors?

- The customers?

StrategyStrategy

WHAT YOUR COMPETITION HAS BEEN UP TO

- Their past year performance?

- New products, technologies, distribution channel?

- New entrants?

StrategyStrategy

WHAT YOU'VE BEEN UP TO

- Your past year performance?

- Introduced a new product, strengthened the team?

- Lost any competitive advantages?

StrategyStrategy

WHAT'S AROUND THE CORNER

- What scares you most in the year ahead?

- How could your competitor harm you?

StrategyStrategy

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?

Strategy means making clear-cut choices about how to compete.

StrategyStrategy

Ponder less, do more.

Example of Organization with Worst Strategic Planning: KESC

Reinventing the ritual

Budgeting

The Wrong Way

- Negotiated Settlement Approach

BudgetingBudgeting

- Negotiated Settlement Approach

- Phony Smile Approach

The Better Way

Link budgeting to strategic planning process

and focus on two questions:

BudgetingBudgeting

and focus on two questions:

- How can we beat last year's performance?

- What is our competition doing, and how

can we beat them?

So you want to start something new

Organic Growth

Organic growth is the process of business expansion by

increasing overall customer base (market share performance),

increased output per customer, new sales,

Organic GrowthOrganic Growth

increased output per customer, new sales,

new products or services (portfolio growth)

or any combination of the above.

Example of Organic Companies: Engro Foods & Nestle Pakistan


- Spend plenty and put the best people in leadership roles.

- Make a commotion about the new venture.

- Get off the new venture's back.

Welch provides three guidelines for making organic growth a winning proposition.

Deal heat and other deadly sins

Mergers and Acquisitions

Handled right, a merger or acquisition could give you a 1 + 1 = 3

… or even 1 + 1 = 11

Mergers & AcquisitionsMergers & Acquisitions

But there are seven pitfalls to avoid. You have to deal the heat.

- Merger of equals


- Merger of equals

- Cultural fit

- Reverse hostage situation

- Integrating too timidly

- Conqueror syndrome

- Paying too much

- Resistance

The Merger & Acquisition Process


Better than a trip to the dentist

Six Sigma

Six SigmaSix Sigma

Six Sigma is a quality program to improve a company’s operational efficiency,

improves customer’s experience, lower costs and build better leaders.

Six SigmaSix Sigma

improves customer’s experience, lower costs and build better leaders.

Six SigmaSix Sigma

Our journey endsOur journey ends

Last Word

Footnote

In Good To Great, Jim Collins discusses companies' "Hedgehog Ideas”, their core,

driving business: what can we be the best in the world at, that we love to do?

GE posed a particular problem for him.GE posed a particular problem for him.

It didn't enter a market where it couldn't be first or second,

and nevertheless it was in a tremendous number one of different markets.

Collins finally decided that GE's core business was developing CEOs,

and indeed, GE alumni are all over the country's executive suites.

“My philosophy of life is that

if we make up our mind what

we are going to make of our lives,

then work hard toward that goal,

we never lose - somehow we win out.”

Ronald Reagan

http://www.welchway.com/

Winning by Jack Welch - A Book Presentation

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