A presentation on the book ‘Winning’ by Jack Welch by Yousuf Zahi Zahid d .
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Sunday, March 27, 2011
"We "W e 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
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So who is Jack Welch anyway?
John Francis "Jack" Welch, Jr. Jr. b. November 19, 1935 PhD - Che Chemica micall Engineeri Engineering ng Former Chairman & CEO of GE Manager Mana ger of of the Century Century - For Fortune tune One of the three most admired business leaderss in the world leader world - Financial Times
And what did Jack do that made him a “legend “legendary” ary” leader?
Jack Welch knew how to win. Led the company to year-after-year year-after-year success around the globe, in multiple markets against brutal competition. Honest, be-the-best style of management became the gold standard in business. With his relentless focus on people, teamwo teamwork rk & profits. Market capitalization rose from $13 billion to $400 billion making it the th e most valuable and largest company in the world.
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Critical Praise for Winning
No other management book will ever be needed. Warren E. Buffett A candid and comprehensive look at how to succeed in business. Bill Gates ...candid and accessible...insights and wisdom to share. Business Week ...smart, practical and not afraid to address tough subjects. Newsweek The right stuff. The Wall Street Journal Now is the time. New York York Times T imes
#1 Wall Street Journal and internat i nternational ional bestseller
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o you remem er w a w nn ng means
Winning: –noun 1. the act of a person person or thing thing that that wins. 2. Usually Usually,, winnings. something something that is won, especially money. money. 3. that wins; successful or victorious, as in a cont contest: est: the winning team.
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Business is about people. In fact, life is only about people. At the end of the t he day, day, it is i s only . 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, however, gives you guidelines to follow, follow, rules to consider, consider, assumptions to adopt and mistakes to avoid.
Lets begin the journey…
Welch has divided the book into four parts: Company Attitude The Company & its People Managing Organizations & Competition Your Career
What’s Ahead
Winning
So much hot air about something so real
Mission&Values
An effective mission statement basically answers one question: How do we intend to win this business?
Requires companies to make choices about people, investment & resources. Prevents them from falling into the common mission trap of asserting they will be all things to all people at all times.
Mission&Values
Mission statements balance the possible and the impossible impossible..
Define Strengths & Weaknesses
Profitability
Inspiration
Sense of Direction
Mission&Values
Mission Statement
Top Management
According to Welch, it is the defining moment for a company’s leadership.
Mission&Values
Values are marching orders. They are how the mission, the means to the end - winning.
Creating values should be iterative. Involve everybody. Make them tangible, identifiable, id entifiable, real, clear clear..
Mission&Values
Mission Statement
Winning Proposition
Values
Mission and values rupture due to the little crises of daily life in business Remember the tragic demise of Arthur Andersen and Enron?
So no more hot air air.. Aim for real action.
The biggest dirty little secret in business
Candor
can·dor /kand /kandr: - Noun, the the quality quality of being open and honest in expression; frankness frankness..
Candor
Candor
Candor is hard to implement and is time consuming. , and talk about it.
,
Most of all, you yourself demonstrate it in an exuberant and even exaggerated way.
Candor
The Candor Effect
Cuts Cost!
Ideas Pick Pace! People Talk! Get Idea Rich!
Candor works because candor unclutters.
D I F F E R E N T I A T I O N
Cruel & Darwinian? Try fair and effective
Differentiation
A company has only so much money & time.
payback is the highest. They cut their losses everywhere else.
Differentiation
Differentiation is a way to manage people and businesses.
be linked to a candid performance appraisal system and has advised to assess employees, separating them into three categories.
Differentiation
Top 20% Star performers - re rewar warded ded and nurtur nurtured. ed. Middle 70% Future stars, core worker workerss - ra n an cu va e em. 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. process .
Voice g n y y gn Every brain brain in the game
Voice&Dignity
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?” 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&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.
LEADERSHIP It’s not just about you
Leadership
LEADERS … upgrade, evaluate, coach their team. … make sure that people live & breathe the vision. … radiate positive energy & optimism. … establish trust with candor, transparency & credit. … 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: Exampl es: Benazir Bhutto & Mian Muhammad Mansha
Leadership
Question: Are leaders born or made? Answer: Both
Hiring What winners are made of
Hiring
What is the one thing you should ask in an interview to help you decide whom to hire? Hiring good people is hard. Hiring great people is brutally hard.
Hiring
The Acid Test
Test for Integrity
Test for Intelligence
Test for Maturity
Hiring
The 4E & 1P Framework
Positive Energy
Can Energize Others Passion
Has an Ed dge ge
C Can an Execute
Hiring
Hiring for the Top Top
Ability to see around corners
Authenticity
Encircled with smart people
Heavy-Duty Resilience
Put it all together and you’ll hire a person who’s going to win!
People Management You’ve got the right players. Now what?
PeopleManagement
According to Welch, HR is a package of parent of parent & pastor
- Elev Elevat ate e HR to a position position of of power power and primacy. HR must have s ecial ualities to hel mana ers build leaders and careers. - Use a rigorous, non-bureaucratic evaluation system.
Example: Unilever Pakistan & Shell Pakistan
PeopleManagement
- Cr Creat eate e effective effective mechanism mechanisms: s: money,, recognition money recognitio n and training: training : . - Fa Face ce straigh straightt into into charged relationships: relationships: unions, stars, sliders and disrupters.
Example: Cellular Industry of Pakistan
PeopleManagement
- Tre reat at the the middle 70% like the heart and soul of the organization. - Design the org chart 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.
PeopleManagement
The Welch Way: HR Business Model
Parting Wa Ways ys Letting go is hard to do
PartingWays
Parting arting of of Wa Ways - Reasons easons
Firings or Integrity Violations
Layo s ue to Economic Downturns
Firings or Nonperformance
PartingWays
Clear and simple
THE PRELUDE Professional development
Characteristics of Characteristics an e ec ve employee evaluation system
Twice a year evaluation, in formal, face-toface sessions
Quantitative and qualitative directly performance
Parting Partin g Ways
So before you say THE word avoid three mistakes…
Parting Partin g Ways
No Surprises No Humiliation No Procrastination
Example of Company where its done wrong: Geo TV
Change Mountains do move
Change
Change
Technology
Change is an absolutely critical part of business. You do need to change before you have to.
Change
Welch advises to follow these four practices: - Atta ttach ch every every change change to a clear goal. - Hir Hire e and rom romote ote onl true believers and o- etters. - Sear Search ch and rem remove ove the resisters resisters,, even if their performance is satisfactory. - Lo Look ok ou outt for for wrecks and exploit change.
Example of Company that exploited a Wreck: China Mobile (Zong)
Crisis Management From oh oh--God -GodGod-no -no to yes yes--we’re -we’re we’re--fine -fine
CrisisManagement
Don't deny there's a problem, act.
Mistakes, Controversies, Blowups
Accidents, Theft, Fraud
Roots of Crises Socio-Economic & Polito-Legal Turmoil urmoi l
The Unthinkable & The Unimaginable
CrisisManagement
Assumptions which give a plan of action to solve crises: - Worse than your your imagination. imagination. - Ev Everyone eryone will will come to know. know. - Med Media ia will will cruci crucify fy you. you. - Sys System temss and people people must change. change. - You will survive; becoming smarter and stronger stronger. Example of Company that survived and then flourished: PTCL Example Exampl e of Company that took all all the wrong steps: steps: Dewan Dewan Group
CrisisManagement
Crisis Radar for Pre-emptive Measures
Strategy It’s all in the sauce
Strategy
Welch’ss strategy approach Welch’ a pproach in three steps: - Co Come me up up with with a big aha for your business. - Put th the right people in the right jobs. - Se Seek ek ou outt best practices to achieve the goal.
Strategy
WHAT WHA T THE PLA PLAYING YING FIELD FI ELD LOOKS LIKE LI KE NOW - The competitors competitors? ? - Th The e mark market et share share? ? - Characteristics of this business? - Strengths and weaknesses of competitors? - The customers customers? ?
Strategy
WHAT WHA T YOUR COMPETITION COMPETITI ON HAS BEEN BE EN UP TO - Their past year performance performance? ? - New products, technologies, distribution channel? - New entrants entrants? ?
Strategy
WHAT YOU'VE BEEN UP TO - Your past year performance performance? ? - In Intr trodu oduced ced a new product, strengthened the team? - Lost any competitive advantages?
Strategy
WHAT'S WHA T'S AROUND THE CORNER - What scares you most in the year ahead? - How could could your your competi competitor tor harm you?
Strategy
WHAT'S WHA T'S YOUR WINNING MOVE? - Wha Whatt can yo you u do to to change the playing field? Is it an acquisition, a new product, globalization? globalization? - Wha Whatt can yo you u do to to make customers stick to you more than ever before and more than to anyone else?
Strategy
Strategy means making clear-cut choices about how to compete.
Ponder less, do more. Example of Organization with Worst Strategic Planning: KESC
Budgeting Reinventing Reinven ting the ritual
Budgeting
The Wrong Way - Phon Phony y Smile Smile Appr Approach oach
Budgeting
The Better Wa Way y Link budgeting to strategic planning process and focus on two questions: - How can can we beat last last year's year's performance? performance? - Wha Whatt is our competit competition ion doing, doing, and how how can we beat them?
Organic Growth So you want to start something new
OrganicGrowth
Organic growth is the process of business of business expansion by increasing overall customer base (market share performance), , , new products or services (portfolio growth) or any combination of the above.
Example Exampl e of Organic Companies: Companies: Engro Foods & Nestle Pakistan Pakistan
OrganicGrowth
Welch provides three guidelines for making organic growth a winning proposition. - Spend plenty and put the best people in leadership roles. - Make a commotion about the new venture. - Get off the off the new venture's back.
OrganicGrowth
Mergers and Acquisitions Deal heat and other deadly sins
Mergers&Acquisition Acquisitionss
Handled right, a merger or acquisition could give you a 1 + 1 = 3 … or even 1 + 1 = 11 But there are seven pitfalls to avoid. You have to deal dea l the heat.
Mergers&Acquisition Acquisitionss
- Cultural fit - Rev ever erse se hostage situation - Inte Integr gratin ating g too timidly - Conqueror syndrome - Paying too much - Resistance
Mergers&Acquisition Acquisitionss
The Merger & Acquisition Process
Six Sigma Better than a trip to the dentist
SixSigma
SixSigma
Six Sigma is a quality program to improve a company’s operational efficiency effic iency,, improves customer’s experience, lower costs and build better leaders.
SixSigma
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 osed a articular roblem 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 never lose - somehow we win out. out.”” Ronald Reagan
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