Today I will give you a Summary of Winning by Jack Welch and Suzy Welch. It’s a book on management from the former CEO of GE when it became the biggest company in the world. It has lots of great insight and is highly acclaimed by Warren Buffett, Bill Gates, Tom Brokaw and Rudy Giuliani, former mayor of New York City. I loved it and highly recommend you read it!

Underneath it all – Basic Truths for Success

Jack Welch starts the book off with 4 core values that he feels are the key to success in any company. I will go into them in more detail.

Mission and Values

Your company needs a specific mission and values, that will help you make decisions. They need to be tangible, easy to understand and to follow. They cannot be too vague. They must also be created by the top executives because the top executives are going to be held accountable for the company accomplishing the mission and living the values.

GE’s mission was to be #1 or #2 in every business that they were in. That is easy to measure and very tangible.

Bank One’s values were “We treat customers the way we would want to be treated.” They then listed specific behaviors such as:

“Never let profit center conflicts get in the way of doing what is right for the customer.”

“Don’t forget to say thank you.”

“Give customers a good, fair deal. Great customer relationships take time. Do not try to maximize short-term profits at the expense of building those enduring relationships.”

In addition to being specific and tangible, it’s important to make the mission and values support each other.

Candor

It’s important to talk about real issues quickly, get ideas and feedback fast and make decisions with good information quickly.

You don’t want to be cryptic or hold back information when talking about business.

If you want your employees to be honest with you, then you need to reward it, appreciate it, recognize it and endorse it constantly.

Employees will not be candid if they think they will lose their job.

However, being candid is the fastest way to get ahead.

This may be a cultural change, but it’s worth it.

Differentiation – Fair and Effective

Jack Welch says what will change a business from good to outstanding is to cultivate the strong and let go of the weak. With business lines that means take what is doing well, and make it stronger. For GE they made a commitment that they wouldn’t do business in any industry if they weren’t the #1 or #2 in it.

For people, he says there are top performers – your top 20%, your stars. You reward and support them. There is the middle 70%, who you also train and support. And then there is the bottom 10%, which you have to let go. The only way for this to be effective is to have fair, effective and very honest evaluations that give people real steps on how to improve their performance.

If the evaluations are fair, and informal evaluations and feedback are frequent, then people will know where they stand in the company, and will improve if they want to remain, and will leave or be prepared to leave when you let them go.

“Protecting underperformers always backfires. The worst thing, though, is how protecting people who don’t perform hurts the people themselves.”

He also gives examples about how differentiation works across cultures as well, as he saw it implemented in Japan with great results.

Voice and Dignity – Every Brain in the Game

The only to make a great business is the have everyone heard. However when Jack started as CEO he noticed that many people asked him questions that they refused to ask their own bosses. In order to fix the situation he created Work-Out sessions.

An outside mediator would have 30 to 100 employees together to talk about improvements that need to be made. The boss would say yes or no to 75% at the end of the meeting, and would resolve the last 25% in 30 days. The boss would then leave and everyone would discuss freely to create recommendations.

Jack says that everyone needs some forum or way where they can speak and be heard. Everyone should be heard and respected.

Your Company

What I love about Jack’s book are the personal examples that he has that really bring it to life. You also get to look at the internal workings of a large company, and it’s really interesting to see what happens behind the scenes.

Leadership – It’s Not Just About You

“Before you are a leader, success is all about growing yourself.
When you become a leader, success is all about growing others.”
Jack makes a list of 8 actions that leaders do.
1) Leaders relentlessly upgrade their team, using every encounter as an opportunity to evaluate, coach, and build self-confidence.
He says this can be fun. It makes meetings and site visits and opportunity to build the self confidence of your people, give praise where it is deserved. The more specific the better.
2) Leaders make sure people not only see the vision, they live and breathe it.
3) Leaders get into everyone’s skin, exuding positive energy and optimism.
4) Leaders establish trust with candor, transparency, and credit.
5) Leaders have the courage to make unpopular decisions and gut calls.
6) Leaders probe and push with a curiosity that borders on skepticism, making sure their questions are answered with action.
7) Leaders inspire risk taking and learning by setting the example.
8) Leaders celebrate.

Hiring – People Management – Parting Ways

Make your HR department as important in your organization as the COO. The Head of HR should be at every executive table. The people in your organization are the life blood, and they need to be valued.

When hiring, look beyond the paper. Give real situations, listen to how they would react. Are they asking the right questions? Are they thinking and acting like the person you want to hire? If you have a bad feeling in your gut don’t hire them. Look for people with integrity, intelligence and maturity.

Jack uses a 4-E (and 1-P) Framework: Positive Energy, Ability to Energize Others, Edge (the courage to make yes-no decisions), Execute – the ability to get the job done and Passion.

When firing people, if you have a good evaluation system in place with plenty of candor, then the person being fired will expect it. They may even quit or find another job before you even fire them.

Change

Change is necessary in business and it’s important to get the whole team on board when making changes. Jack recommends these four principles to have change go smoothly.
1) Attach every change initiative to a clear purpose or goal. Change fore change’s sake is stupid and enervating.
2) Hire and promote only true believers and get-on-with-it types.
3) Ferret out and get rid of resisters, even if their performance is satisfactory.
4) Look at car wrecks.

Crisis Management

GE had a lot of crisis they had to manage and Jack recommends the following when dealing with them:
Assumption 1: The problem is worse than it appears.
Assumption 2: There are no secrets in the world, and everyone will eventually find out everything.
Assumption 3: You and your organization’s handling of the crisis will be protrayed in the worst possible light.
Assumption 4: There will be changes in processes and people. Almost no crisis ends without blood on the floor.
Assumption 5: The organization will survive, ultimately stronger for what happened.