Welch on creating strategic advantage

Citation

Wilson, I. (2005), "Welch on creating strategic advantage", Strategy & Leadership, Vol. 33 No. 6. https://doi.org/10.1108/sl.2005.26133fae.002

Welch on creating strategic advantage

Welch on creating strategic advantage

WinningJack Welch, with Suzy WelchHarper Business, 2005, 372 pp.

Jack’s b-a-c-k!

Four years after his first best-selling book, Jack Welch, the former CEO of General Electric and now promoter for no-nonsense management, jumps back into the literary arena with Winning (Harper Business, 2005) – teaching us how to develop a winning strategy.

For both of his books, Welch has been fortunate in having professional writers as collaborators. John Byrne of Business Week assisted with Jack: Straight from the Gut (Warner Business Books, 2001), and Suzy, Jack’s wife and former Harvard Business Review editor, gets a credit for the current volume. But, make no mistake about it, the voice is that of Welch himself – direct, forceful (some would say overbearing), specific, and blessedly free of “executive (consultant)-speak.” Those of us who have worked for him will instantly recognize both the tone and the message of these two volumes.

In Jack, we saw the evolution of his thinking through the prism of his career, from lowly chemical engineer to internationally recognized, and controversial, CEO. In Winning, he presents us with his view of the complete picture – the philosophy and the action (he regards the two as inseparable) – of what it takes to win in today’s brutally competitive world.

Even the structure of the book reflects the man himself: one part philosophy to three parts action. In a section entitled “Underneath It All,” he spells out what he sees as the fundamental values underlying his approach to business – the importance of a sense of mission; the need for candor (the lack of which is the “biggest dirty little secret in business”); the essential role of “differentiation” (rewarding the high performers, getting rid of the sub-par performers); and his belief that “every person in the world wants voice and dignity, and every person deserves them.”

The action sections of the book deal with three Cs – company, competition, and career. The first is concerned with the essential role of people in creating a winning culture – leadership, people management (hiring, motivating, letting go), managing change and crisis management. In the second, “Your Competition,” Welch gives specific directions for three tasks: creating strategic advantage, reforming budgeting into a creative process, and growing organically and through mergers and acquisitions. He also attempts to demystify the quality program Six Sigma – a topic that everyone talks about, but very few understand. And finally, in “Your Career,” he brings the focus and the discussion down to the personal level, how to find the right job, how to get promoted, how to deal with working for a bad boss, and how to tackle the very personal problem of work-life balance (a problem on which he, engagingly, admits he is not an authority – “Do as I say not as I did”).

Every step of the way he is both specific and personal – developing lists of actions to take (see, for instance, the box on “The role of leaders in winning”), and bringing the very general down to the personal level with examples drawn from his own career and also from lessons he has learned from others. He draws inspiration from the prominent and the humble – ranging from his fellow CEOs to the Upper Crust Pizza in Boston (their “strategy is all about product”!).

All told, the book is a remarkably easy read despite the complexity of the subject matter. The fact that it is as persuasive as it is stems from the power and clarity of Welch’s arguments and the strength of his record – though he has to pull out all the stops to sell his controversial policy of upgrading the work force by constantly winnowing out the bottom 10 percent.

Undoubtedly, most readers would like to be the Jack Welch of their particular arena. And, indeed, much of what he advocates can be broadly applied, even in the non-corporate sector. But I would offer one cautionary note, “Be careful what you wish (and work) for.” Every organization, every culture, every manager is unique, so there can be no cookie-cutter approach to winning. By all means, take Welch’s advice and experience to heart; but find your own path. “Adapt, not simply adopt” should be your motto. I believe that Welch would agree.

The role of leaders in winning

1. 1.

   Leaders relentlessly upgrade their team, using every encounter as an opportunity to evaluate, coach and build self-confidence.

2. 2.

   Leaders make sure people not only see the vision, they live and breathe it.

3. 3.

   Leaders get into everyone’s skin, exuding positive energy and optimism.

4. 4.

   Leaders establish trust with candor, transparency and credit.

5. 5.

   Leaders have the courage to make unpopular decisions and gut calls.

6. 6.

   Leaders probe and push with a curiosity that borders on skepticism, making sure their questions are answered with action.

7. 7.

   Leaders inspire risk taking and learning by setting the example.

8. 8.

   Leaders celebrate.

(Excerpted from Winning, Harper Business © 2005)

Ian WilsonConsultant, lecturer and author on strategic management, strategic vision, scenario planning and corporate governance (Jason415xx@aol.com), had a 25-year career with General Electric, including positions on the company’s strategic planning staff and as a public policy adviser to the chief executive officer. He went on to become a senior consultant at SRI International. His recent books include: The New Rules of Corporate Conduct, Quorum Books, 2000, and The Subtle Art of Strategy, Praeger Books, 2003. He is writing a book on how to do scenario learning.