This article is an excerpt from the Shortform book guide to "Winning" by Jack Welch and Suzy Welch. Shortform has the world's best summaries and analyses of books you should be reading.
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What is Winning by Jack Welch about? Are you ready to take the top spot in the business world?
In Winning, Jack Welch shares how you can make it big in the world of business. If you’re a leader trying to make a name for yourself and your company, this is the book for you.
Read below for an overview of Jack Welch’s Winning.
Winning by Jack Welch
In Winning, Jack Welch shares advice on how to win in the business world, whether you’re running your own company or trying to climb the corporate ladder.
Welch began his career at General Electric (GE) in the 1960s as a junior engineer. Over two decades, he worked his way up in the company, eventually becoming chair and CEO in 1981, where he remained for two decades until his retirement in 2001. Welch transformed GE into the most valuable company in the world and, in the process, became one of the nation’s best-known business leaders. His ideas on business strategy and corporate management continue to guide the business world. His first book, Jack: Straight from the Gut, is an autobiography on his career at GE. Winning (2005), on the other hand, is a business guidebook containing the most useful information he gathered during his successful career.
General Principles of Business
We’ll begin with some of Welch’s big-picture principles for running a successful company: candor and differentiation.
Candor
According to Welch, candor is one of the most important qualities to cultivate in your organization. People should be encouraged to be outspoken, direct, and honest in their communication.
Welch claims that establishing candor in your organization helps in three key ways:
- It produces ideas. When everyone in your company is accustomed to speaking their mind, and accustomed to others speaking their minds, without fear of punishment or ridicule, more meaningful and productive conversations occur. More ideas are presented, and these ideas are discussed and criticized until the best idea wins out.
- It saves your organization time. Because ideas are being openly debated and discussed, your organization can get to the best ideas quicker. Instead of people keeping their mouths shut or tiptoeing around criticisms of their coworkers’ or bosses’ ideas, people will speak their minds and move on.
- It saves your organization money. A candid organization is less likely to waste money on meetings where nothing of substance is said or reports that don’t contribute value to the company’s bottom line. Instead, employees can focus on the things they feel are actually important.
According to Welch, the method for creating a more candid company culture is straightforward: Recognize and reward candid behavior as much as possible. Over time, people will grow accustomed to direct and honest communication, and they’ll grow to appreciate and see the value in it.
Differentiation
Another guiding principle Welch advocates is what he calls “differentiation,” one of his most influential yet controversial ideas. Differentiation is a process in which you identify the best- and worst-performing people, products, and services within your company, then nurture your best performers and remove your worst. Welch claims that differentiation can greatly improve your organization’s chance of success.
When it comes to products or services, differentiation means determining the most profitable sectors of your business and allocating resources to those key areas. With people, it means promoting or rewarding your best employees and firing your worst.
How to Manage Your Company
Now we’ll look at some of Welch’s advice regarding best business practices, such as hiring, people management, and adaptation.
How to Hire Effectively
Welch emphasizes the importance of having strong hiring practices as a way to ensure the right people are working for your business. He claims that hiring is a tricky process, and though a strong résumé and experience are important, you’ll often have to rely on instinct to determine who will be best for the job. Through trial and error, Welch has identified five key characteristics to look for when hiring an employee:
- Vigorous: You want employees who are active and optimistic. Such people work hard and get along well with others.
- Inspirational: You want employees who can inspire and motivate others through both their words and actions.
- Decisive: In business, people have to make tough decisions, and they often don’t have as much time or information as they’d like to have. You want employees who try to analyze situations and make the best possible decisions when they can, but who are also not afraid to make a quick decision when necessary.
- Effective: Make sure your employees know how to get the job done. Welch admits that effectiveness can be easily overlooked—sometimes people seem to have great potential and the right characteristics but for whatever reason can’t implement decisions effectively.
- Enthusiastic: Finally, you want employees who are excited about the work they’re doing. No matter your work ethic or business experience, it’s enthusiasm that truly sets people apart.
How to Manage Your Employees
Once you’ve hired the right people, you must set them up for success and manage them effectively. Welch provides several tips for managing employees:
Establish a strong human resources department: Welch argues that HR is crucial to the success of any company and yet is often overlooked or disregarded. HR, when implemented correctly, should be a transparent organization that addresses employees’ concerns, fosters compromise between departments, and helps people develop. Businesses are filled with people, and there will always be interpersonal conflict—office politics, hurt feelings, and disagreements. A strong HR department that has true power helps alleviate conflict and ensure that the company is as healthy and strong as it can be.
Create a strong system for evaluating performance: According to Welch, most companies don’t have a good method for evaluating employees. Though every company’s will differ, Welch says that an evaluation system should be direct (clearly stating what the employee did well and where they can improve), data-driven (using quantitative data to measure performance), and should occur at least once a year (though more frequent evaluations may be helpful).
Delineate clear roles and responsibilities, with as few hierarchy layers as possible: Welch points out that many companies, especially bigger ones, suffer from a lack of clarity regarding each employee’s role within the company. To avoid this, design a detailed organizational chart that clearly shows the work each employee is responsible for and who they report to. This will promote transparent communication and ensure that everyone knows what they should be doing on a daily basis.
Welch recommends having as few layers of hierarchy in your company as possible because they cost the company time and money. He claims that some companies keep adding levels within their ranks as they grow; others add layers so they can more easily promote top performers. But a company with too many hierarchy layers becomes difficult to manage and for employees to navigate. It also tends to add unnecessary costs and complicate even the most basic business decisions, requiring employees and managers to run every decision up the chain of command. Instead of having several rungs of managers within one department, it’s better to have one manager who oversees the department and reports directly to the CEO.
How to Adapt
Along with hiring the right people and having an effective management system, successful companies must also know how to adapt to changing market conditions. Yet enacting change within a company can sometimes feel like an uphill battle—employees are often resistant to change, and it can be costly and time-consuming. Welch gives three pieces of advice on how to adapt successfully.
Adapt purposefully: Because change is a necessary part of business, a common mistake companies make is to enact change without a clear direction in mind, jumping on the latest trend or trying to adapt in several ways at once. This can lead to a disorganized work environment in which time and money are wasted and employees don’t buy into the new way of doing things.
But if you instead adapt thoughtfully, with a clear goal, things will go much more smoothly. To do this, Welch recommends backing your changes with as much data as possible. This will ensure that the changes are actually good for the business and will be implemented correctly.
For instance, if you’re a car company looking to adapt to the rapidly growing market for electric vehicles, you should research everything that might affect this transition—the expected market share of EVs, the expected cost of research and development, design, marketing, and manufacturing, customer sentiment regarding greener energy, quantity and quality of potential competitors, and so on. With this data, you’re more likely to make a sound business decision, and when your employees see the amount of research that’s gone into the decision, they’re more likely to be on board with the change.
Dismiss the obstructors: Though a purposeful and data-backed change will help sway the skeptics, there will always be employees who remain resistant. Welch says you have to get rid of the people who aren’t on board with the change. Not only will they provide little value, they’ll also lower the morale and motivation of everyone else.
Search for opportunities everywhere: Sometimes, it’s obvious what changes your company needs to make—for example, buying out a struggling competitor for pennies on the dollar or transitioning to e-commerce with the rise of the internet. But Welch claims that to be a truly successful and adaptive company, you need to be constantly on the lookout for less obvious changes. This might mean staying up to date on the latest technologies or emerging industries. By staying ahead of the curve on potential changes your company can make, you ensure that you’re one step ahead of the competition and, when a new market trend develops, you’re not the last one to realize it.
Advancing Your Career
Now let’s explore some of Welch’s tips on how to further your career. We’ll look at his advice on finding the right job, getting promotions, and handling work-life balance.
Finding the Right Job
Welch claims that finding a job that’s the right fit for you can only be done through trial and error. There is simply no way of knowing how much you’ll like a job, or how good you’ll be at it, until you try it out. Furthermore, it’s important to understand that no job is perfect and there will always be things you don’t like about it. It’s not about finding the perfect job, but the one that best suits your needs and capabilities.
That said, there are things to look for that can help you determine if a job is the right fit:
People: Perhaps the most important part of any job is the people you work with. Welch claims that no matter how much you enjoy the work or how much money you make, you’ll be miserable if you don’t enjoy being around your coworkers. Pay careful attention to whether the organization and the people within it share your general attitude toward work and life. If you find early on that the people you work with aren’t “your kind of people,” it may be better to cut your losses and search for another job.
Opportunities: Welch argues that a job should provide you with opportunities both while you’re working there and after you leave it. By that he means that a job should help you grow as a person and learn new things while also giving you the credentials to further your career elsewhere if you choose to do so. Finding a job that challenges you is important because learning and growing keeps you motivated and mentally sharp. And a job that gives you credentials gives you options if your priorities change.
Joy and meaning of the work: Though a job with the right people and opportunities is important, the work itself must also bring you happiness and meaning. Welch claims that if you find yourself making excuses for having a job, like that the money is too good to pass up, it may be better to find something else. He also says you don’t need to think too hard about whether you’re passionate about the work—when you find a job you’re truly passionate about, you’ll know.
How to Improve Your Chances of Promotion
Welch argues that getting promoted often requires a fair amount of luck, but there are some things you can do to improve your chances.
Expand your role: One major way to increase your chances of getting a promotion is to expand your position to include more responsibilities. This will help you prove your value to the company and stand out from the crowd. For example, if you’re a salesperson looking to become a sales manager, you could expand your role by coming up with a new sales strategy that everyone can use.
Embrace change: Since adapting to change is crucial in business, employees who embrace change are more likely to receive promotions. Quickly and wholeheartedly embracing the new project or initiative your company is implementing is a surefire way to impress your bosses and prove your worth.
Seek out advice from multiple mentors: Welch says you should seek out advice from as many mentors as you can, both formal and informal. By gathering as much useful information as you can, you’ll stand out from the crowd. You might have one person who fits the classic mentor mold (an older, more experienced person in your industry that you meet with regularly), but you should also look for advice from people younger than you, people outside your work, and anywhere else you can find it.
Handling Work-Life Balance
There’s no perfect way to balance work and your social life, but if you want to advance your career, you’ll have to make some sacrifices. How much you’re willing to sacrifice is up to you, but Welch says that to make the best decision for yourself, there are a few things you need to understand about work-life balance:
You and your boss have different priorities: Your boss’s priority is to get as much value out of you as possible. This doesn’t mean most bosses expect you to give everything to the company, but they’ll take as much as they can get. A boss gets paid to keep their employees productive, and most bosses will be willing to work with you on work-life balance if you’ve proven your value to the company and can remain productive.
Figuring out how to balance work and life is ultimately up to you: Welch says that some bosses are more accommodating than others, but ultimately, it’s your job to figure out how to balance work and life. A boss can help with scheduling or help you be more efficient, but you’re the one who has to implement that advice. You have to decide what your values are and what you need to do to make them a reality. If that means quitting a job that you feel demands too much of your time, so be it, but only you can make that decision.
Once you understand your boss’s priorities and your own values, here are two things you can do to best achieve your desired work-life balance:
Keep work and life separate: However you prioritize your work and life, Welch says it’s important to remain focused on the task at hand and the people you’re with. When you’re at work, give it your full attention. Don’t plan your family vacation when you’re supposed to be working or text your spouse during a meeting. Similarly, try to limit the amount of time you work when you’re with family and friends. Don’t check your emails while playing with your kids or constantly talk business on a night out with friends.
Set boundaries: Once you’ve determined your priorities, Welch says you must be able to say no to requests that disrupt your chosen work-life balance. Welch points out that saying ‘no’ can be hard for many career-oriented people, as they think being an agreeable person shows they’re willing to work hard. But if you say yes too often, achieving the goals you set for yourself becomes nearly impossible.
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Like what you just read? Read the rest of the world's best book summary and analysis of Jack Welch and Suzy Welch's "Winning" at Shortform.
Here's what you'll find in our full Winning summary:
- Business advice from one of the best-known corporate leaders in the US
- How to win the business world, whether you own a business or work for one
- Advice such as how to hire effectively and how to adapt your company
