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LEADERSHIP SECRET 1 HARNESS THE POWER OF CHANGE Accept change. Business leaders who treat change like the enemy will fail at the ir jobs. Change is the one constant, and successful business leaders must be abl e to read the ever-changing business environment. Let your employees know that c hange never ends. Teach your colleagues to see change as an opportunity-a challe nge that can be met through hard work and smarts. Be ready to rewrite your agend a. Welch always encouraged his managers and employees to be prepared to re-exami ne their agenda and to make changes when necessary. PART I THE VISIONARY LEADER: MANAGEMENT TACTICS FOR GAINING THE COMPETITIVE EDGE
LEADERSHIP SECRET 2 FACE REALITY Face reality. Business leaders who avoid reality are doomed to failure. Act on r eality quickly! Those who truly face reality can¶t stop there. They must adapt the ir business strategies to reflect that reality, and they must do so quickly. Tur n your business around. Stick your head in the sand, says Welch, and you will fa il. Face reality, and you may turn a bad situation into a great one. PART I THE VISIONARY LEADER: MANAGEMENT TACTICS FOR GAINING THE COMPETITIVE EDGE
n ot supervision. Treat employees with respect and build the ir confidence. Employees do not need constant supervision. Instil confidence. Teach your managers to manage less. even though their training may be to manage more. PART I THE VISIONARY LEADER: MANAGEMENT TACTICS FOR GAINING THE COMPETITIVE EDGE . You will be surprised at the results. Emphasize vision. Get out of the way. L et them do their jobs.LEADERSHIP SECRET 3 MANAGING LESS IS MANAGING BETTER Manage less. Managing less lets managers think big thoughts and come up with new ideas to benefit the business.
LEADERSHIP SECRET 4 CREAT A VISION AND THEN GET OUT OF THE WAY Business is simple. what have your competitors don e? In the same period. Put the right people in the right job. what have you done to them? How might they attack you in the future? What are your plans to leapfrog them? Managing is allocating people and resources. Complications arise when people are cut off from vital infor mation. PART I THE VISIONARY LEADER: MANAGEMENT TACTICS FOR GAINING THE COMPETITIVE EDGE . and then get out of the way. Always keep the five key questions in mind: What does your global compet itive environment look like? In the last 3 years. Managers must persuade o thers to implement through the force of vision. give them what they need. Managers lead with vision.
and goals of the organization. culture. Do not try to set a detailed game pla n for every situation. Values should reflect the vision. but the strateg ies may need to change with the competitive environment. Create values that are consistent with the company vision . SET ONLY A FEW.LEADERSHIP SECRET 5 DON¶T PURSUE A CENTRAL IDEA. PART I THE VISIONARY LEADER: MANAGEMENT TACTICS FOR GAINING THE COMPETITIVE EDGE . CLEAR GOALS AS BUSINESS STRA TEGIES Set out a general framework for your team. Core values should be constant. INSTEAD. Make sure there is room to maneuver.
even if they don¶t make their numbers. PART I THE VISIONARY LEADER: MANAGEMENT TACTICS FOR GAINING THE COMPETITIVE EDGE .LEADERSHIP SECRET 6 NURTURE EMPLOYEES WHO VALUE COMPANY¶S VALUE Give employees more responsibility. Nurture the employees who live up to company values. and they will make better decisions. By maki ng your employees more accountable. but absolutely necessary. yes. you make your organization more productive. Consider reassigning them if their numbers continue to falter. Difficult. even if their numbers are good. Elimina te employees who do not live the company values.
PART II IGNITING A REVOLUTION: STRATEGIES FOR DEALING WITH CHANGE . Allocate resources to market-leading businesses. The boldest vision may be the best vision. See things for what they are. and jettison those that are not competitive. Welch had his finger on the pul se of the competitive environment. From the start. Begin with a vision. Nothing changes wi thout a clear vision of where change is supposed to lead. Keep a close tab on those key variables that create opportunities and challenges for your business. fix ailing companies.LEADERSHIP SECRET 7 KEEP WATCH FOR THE WAYS TO CREAT OPPORTUNITIES AND TO BECOME MORE COMPETITIVE Don¶t stick your head in the sand.
Don¶t make the mistake of defining markets so narrowly tha t you shut yourself out of growing market segments PART II IGNITING A REVOLUTION: STRATEGIES FOR DEALING WITH CHANGE . Define markets broadly. but laggards fall further behind when times get tough. Number one and number two businesses can with stand downturns.LEADERSHIP SECRET 8 BE NUMBER ONE OR TWO AND KEEP REDIFINING YOUR MARKET Develop market-leading businesses.
Don¶t assume that because all is well at themoment. (And are you sure all is well?) Don¶t lead by polls. Do what you know is right for the long-term health of the organization. regularly review expense s and head counts. he might have had to eliminate far more jobs in later years PART II IGNITING A REVOLUTION: STRATEGIES FOR DEALING WITH CHANGE . BEFORE IT IS TOO LATE Even in the good times.. .LEADERSHIP SECRET 9 DOWNSIZE. CEOs should not run companies as if they were popularity contests. Had Welch not restructured in the ea rly 1980s. Remember that tough actions today m ay prevent far more complex problems later. it will st ay that way.
old moves need to be part of a patient. The big .LEADERSHIP SECRET 10 USE ACQUISITIONS TO MAKE THE QUANTUM LEAP Go for the quantum leap. the other didn¶t. even if it goes against company culture. Keep hunting f or the little opportunities. One panned but. When Welch acq uired RCA. he rewrote GE¶s rule book. PART II IGNITING A REVOLUTION: STRATEGIES FOR DEALING WITH CHANGE . Think outside the box. sy stematic approach to mergers and acquisitions. Both the RCA and Hone ywell deals were audacious moves.
Unless the idea is acted on. Does your company have a way to make sure ideas are exchanged at every level and from every corner of the company? Fi nd and implement the best ideas. Make sure that great ide as are followed by implementation. it will have lit tle impact. Welch demolishe d the notion that the best ideas come only from within.LEADERSHIP SECRET 11 LEARNING CULTURE1:USE BOUNDRYLESSNESS AND EMPOWERMENT TO NURTURE A LEARNING CULT URE Emphasize idea sharing inside the company. PART II IGNITING A REVOLUTION: STRATEGIES FOR DEALING WITH CHANGE . no matter where they come from.
Reward employees for sharing kno wledge. Ma ke sure their ideas are translated into action. NO MATTER WHER E THEY COME FROM Make searching for new ideas a priority of every employee. In today¶s competitive environment. PART II IGNITING A REVOLUTION: STRATEGIES FOR DEALING WITH CHANGE . Hold idea-sharing mee tings on a regular basis. Find a way to reward managers and employees for sharing ideas and puttin g best practices to work at every level. Get a diverse group of managers together regularly.LEADERSHIP SECRET 12 LEARNING CULTURE II : INCULCATE THE BEST IDEAS INTO THE BUSINESS. organizations can¶t afford to leave anyone out.
LEADERSHIP SECRET 13 THE BIG WINNERS IN THE TWENTY-FIRST CENTURY WILL BE GLOBAL Get your house in order first. PART II IGNITING A REVOLUTION: STRATEGIES FOR DEALING WITH CHANGE . local sou rcing (by companies run by local managers) may be your third phase of globalizat ion. To compete in the global economy. are global. Make sure your domestic base is solid before vent uring abroad. Businesses . comp anies must develop a distinct strategy for each international market. not companies. E xporting often comes first. Local production may come second. Finally. Recognize that there are phases in globalization. Think globally and locally.
LEADERSHIP SECRET 14 DE-LAYER: GET RID OF THE FAT! Get rid of any layers of management that do not add real value to the process. A sk yourself: How can I improve communications with the folks down below on the f actory floor? If the answer is ³lose layers. Make the call based on objective criteria. PART III REMOVING THE BOSS ELEMENT: PRODUCTIVITY SECRETS FOR CREATING THEBOUNDAR YLESS ORGANIZATION . not relationships . Cutting executive jobs can be one of the most difficult decisions a m anager has to make.´ then lose them. Don¶t let emotions get i n the way.
Establish systems that foster self-confidence. Making the vision clear sparks people¶s passion and productivit y. Help people understand how the ir efforts are helping the company to succeed. and self confidence. These three attribute s build organizations that are able to change with the changing environment. PART III REMOVING THE BOSS ELEMENT: PRODUCTIVITY SECRETS FOR CREATING THEBOUNDAR YLESS ORGANIZATION . simplicity. The most effective communications are those that are e asy to understand.LEADERSHIP SECRET 15 SPARK PRODUCTIVITYTHROUGH THE ³S´SECRETS ( SPEED. Find ways to let people take risk s and win.SIMPLICITYAND SELF CONFIDENCE ) Promote the three ³S¶s´: speed. Sta rt with a simple message.
Welch removed layers and sector heads that did not add value. removin g layers. PART III REMOVING THE BOSS ELEMENT: PRODUCTIVITY SECRETS FOR CREATING THEBOUNDAR YLESS ORGANIZATION . Welch l ikes to compare his company to the corner grocery store. approvals²in short. Check reality: Do you know your customers? This is a good yardstick. consider restructuring. anything that bloats and slows the compa ny. and do they know you? If not.LEADERSHIP SECRET 16 ACT LIKE A SMALLCOMPANY Assume that your big company can act small. you have your work cut out for you. Welch had to work at it. Do you know your custom ers. but he knew he could instil the passion and informality of a small company into the soul of GE. If your organization is too bloated. Structure for smallness. boundaries.
Involve everybody. They also set a posit ive pattern for others in the company. Model behavio urs with senior managers. consider holding a Work-Out session (see Leadership Secrets 18 to 20). PART III REMOVING THE BOSS ELEMENT: PRODUCTIVITY SECRETS FOR CREATING THEBOUNDAR YLESS ORGANIZATION . To achieve boundaryles sness in your organization. If boundaries are deeply ingraine d. Welch credits his CEC meetings with helping to spread the flow of ideas throughout all of GE¶s diverse businesses. involve everybody. Anything that disrupts communications between departments a nd employees or between employees and outside constituents is bad.LEADERSHIP SECRET 17 REMOVE THE BOUNDRIES Root out boundaries.
Turn workers into owne rs.LEADERSHIP SECRET 18 UNLEASH THE ENERGY OF YOUR WORKERS Unleash productivity by involving everyone. Owners²literal and figurative² have a far greater stake in the business. PART III REMOVING THE BOSS ELEMENT: PRODUCTIVITY SECRETS FOR CREATING THEBOUNDAR YLESS ORGANIZATION . attitudes don¶t change overnight. Have pa tience. Welch waited until 1988 before implement ing Work-Out. He knew that other aspects of his plan had to take effect before h e could make his move. Make sure that everyone knows how im portant his or her contribution is to the overall effort.
Managers who could not deal with the re quirements of Work-Out were fired. The succes s of this sort of program depends on employees speaking candidly. PART III REMOVING THE BOSS ELEMENT: PRODUCTIVITY SECRETS FOR CREATING THEBOUNDAR YLESS ORGANIZATION . If a full-blown Work-Out session is not possible. The Work-Out program was clear evidence of Welch¶s com mitment to transferring power within GE. consider a half-day minisession.LEADERSHIP SECRET 19 LISTEN TO THE PEOPLE WHO ACTUALLY DO THE WORK Turn hierarchy upside down.without fear of penalty. Enable people to speak out freely. Follow the guidelines presented in this leadership secret but compr ess the entire session into a half-day program.
Nourish dignity. Think of Work-Out as a pr erequisite to more ambitious initiatives such as Six Sigma. The most important thing a leader does. is ³treasure and nourish The voice and dignity of every person. Build programs on a foundation like Work-Out. Jack Welch asserts. Every company has these foo lish habits that should have been abolished years ago.LEADERSHIP SECRET 20 GO BEFORE YOUR WORKERS AND ANSWER ALL THEIR QUESTIONS Search out practices that have stopped making sense.´ PART III REMOVING THE BOSS ELEMENT: PRODUCTIVITY SECRETS FOR CREATING THEBOUNDAR YLESS ORGANIZATION . Root them out and elimina te them.
LEADERSHIP SECRET 21 STRETCH YOUR GOALS AS OFTEN AS YOU CAN Get the most out of your employees. fine²as long as they¶ve truly tried to stretch. Push for the impossible. Each employee should be ³stretched´ to the maxim um. Set Stretch goals and then push to exceed them. Instil l in your employees the idea that they should go beyond ordinary goals. If people don¶t reach those go als. PART IV NEXT GENERATION LEADERSHIP: INITIATIVES FOR DRIVING AND SUSTAINING DRIVI NG AND SUSTAINING DOUBLE-DIGIT GROWTH .
and so on.´ Don¶t let low quality standards necessitate endless reworking. features. Don¶t rely on other company initiatives or strategies to t ackle the problem of quality. Quality can be jus t as important as price. Use quality to make sure t hat your products are your customers¶ only actual value choice. PART IV NEXT GENERATION LEADERSHIP: INITIATIVES FOR DRIVING AND SUSTAINING DRIVI NG AND SUSTAINING DOUBLE-DIGIT GROWTH . Find the ³hidden factory.LEADERSHIP SECRET 22 MAKE QUALITY A TOP PRIORITY Tackle quality head-on. Attack it directly.
to lead the q uality charge. PART IV NEXT GENERATION LEADERSHIP: INITIATIVES FOR DRIVING AND SUSTAINING DRIVI NG AND SUSTAINING DOUBLE-DIGIT GROWTH . Welch ident ified a core group. with clear qualifications and characteristics. As soon as pay and promotion prospects were linked to Six Sigma. look at all products and processes. Link compensation to quality performa nce. Start with a quality cadre. Then he broadened the base. participat ion soared and change took root.LEADERSHIP SECRET 23 MAKE QUALITY THE JOB OF EVERY EMPLOYEE Think about quality universally. When implementing a Six Sigma like quality prog ram.
Nothing is more important than follow-through. You w ill need to make sure that quality does not fall off in the future. Measure. improve. and control to achieve a new discipline in your company. Consider initiating customer surveys to assess your quality eff ort. PART IV NEXT GENERATION LEADERSHIP: INITIATIVES FOR DRIVING AND SUSTAINING DRIVI NG AND SUSTAINING DOUBLE-DIGIT GROWTH .LEADERSHIP SECRET 24 MAKE SURE EVERYONE UNDERSTANDS HOW SIX SIGMA WORKS Understand the component part s of Six Sigma quality. Your custome rs know quality. analyze.
Make sure your employees are aware that the point is to satisfy customers. Monitor customer reaction to the initiative on a continuing basis. Don¶t assume that the c ustomer is as happy as you are. Keep the customer as the main focus.LEADERSHIP SECRET 25 MAKE SURE THE CUSTOMER FEELS QUALITY Customers must be brought into the process. Make sure that your customers feel t he results of your quality program as quickly as possible. PART IV NEXT GENERATION LEADERSHIP: INITIATIVES FOR DRIVING AND SUSTAINING DRIVI NG AND SUSTAINING DOUBLE-DIGIT GROWTH .
b e aware that some of your long-standing ideas about your business may need to be adjusted. GE Capital Services² far from the light-bulb trade!²has been an astounding success. PART IV NEXT GENERATION LEADERSHIP: INITIATIVES FOR DRIVING AND SUSTAINING DRIVI NG AND SUSTAINING DOUBLE-DIGIT GROWTH . Stay flexible.LEADERSHIP SECRET 26 GROW YOUR SERVICE BUSINESS: IT¶S THE WAVE OF THE FUTURE Think hard about the services that might be directly associated with your produc ts. Is your company leaving money on the table by not pursuing after market serv ice opportunities? Think equally hard about services that are further removed fr om your core product lines. As you make the move into services.
E-business. Elimination of human error in the orderfulfillment process can further enhance profitability PART IV NEXT GENERATION LEADERSHIP: INITIATIVES FOR DRIVING AND SUSTAINING DRIVI NG AND SUSTAINING DOUBLE-DIGIT GROWTH . Web brochures are not en ough. Welch was criticized for being a late move r on the Internet. with its minimal transaction costs. What products can you sell in cyberspace? Take advantage of the Web¶s effici encies. Look for appropriate e-business opportunities. can be highly profitable . but GE avoided many of the problems on the ³bleeding edge´ of tec hnology.LEADERSHIP SECRET 27 TAKE ADVANTAGE OF E-BUSINESS OPPORTUNITIES Look before you leap into e-business.
LEADERSHIP SECRET 28 MAKE EXISTING BUSINESSES ARE INTERNET READY. as in most a spects of business. On the Internet. Don¶t worry that your business model wi ll not work on the Internet. PART IV NEXT GENERATION LEADERSHIP: INITIATIVES FOR DRIVING AND SUSTAINING DRIVI NG AND SUSTAINING DOUBLE-DIGIT GROWTH .´ Your goal should be to take existing products and processes on-line rather than attemptin g to build up from zero. Think ³Web enabled´ rather than ³Web threatened. Think inside and outside.DON¶T ASSUME THAT NEW BUSINESS MODELS ARE THE ANSWER Adapt your business model to the Internet. the two key challenges are (a) to develop great people insid e and (b) to present a compelling value proposition to the customer.
Think in terms of days and weeks rather than years. Build on strengths. Success on the Internet in part grows out of bei ng a fundamentally strong company PART IV NEXT GENERATION LEADERSHIP: INITIATIVES FOR DRIVING AND SUSTAINING DRIVI NG AND SUSTAINING DOUBLE-DIGIT GROWTH . using the latest technologies.LEADERSHIP SECRET 29 USE E-BUSINESS TO PUT THE FINAL NAIL IN BUREAUCACY Manage in Internet time. Re invent the company to compete in Internet time. allows managers to communicate instantly with employees. in combina tion with intranets. Exploiting Internet time will change the fundamentals of you r business. The Internet.
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