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
A presentation on the book ‘Winning’ by Jack Welch
Sunday, March 27, 2011
"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
Mission & ValuesMission & Values
Sense of Direction
Inspiration
ProfitabilityProfitability
Mission Statement
Top
Management
Mission & ValuesMission & Values
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.
Mission & ValuesMission & Values
Creating values should be iterative. Involve everybody.
Make them tangible, identifiable, real, clear.tangible, identifiable, real, clear.
Mission
StatementValuesWinning Proposition
Mission & ValuesMission & Values
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
DifferentiationDifferentiation
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.
DifferentiationDifferentiation
- 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.
People ManagementPeople Management
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.
People ManagementPeople Management
- 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
People ManagementPeople Management
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
Parting WaysParting Ways
an effective employee
evaluation system
criteria relating directly
performance
Twice a year evaluation, in
formal, face-to-face sessions
development
Parting WaysParting Ways
So before you say THE word avoid So before you say THE word avoid three mistakes…three mistakes…
No Surprises
Parting WaysParting Ways
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:
Crisis ManagementCrisis Management
- 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
Crisis ManagementCrisis Management
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
Organic GrowthOrganic Growth
- 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.
Organic GrowthOrganic Growth
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
Mergers & AcquisitionsMergers & Acquisitions
- Merger of equals
- Cultural fit
- Reverse hostage situation
- Integrating too timidly
- Conqueror syndrome
- Paying too much
- Resistance
The Merger & Acquisition Process
Mergers & AcquisitionsMergers & Acquisitions
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/
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