We’re less than a month away from the release of Jack and Suzy Welch‘s newest work, The Real Life MBA: Your No-BS Guide to Winning the Game, Building a Team, and Growing Your Career (Harper Business, 2015). It is a certain best-seller, and pre-orders for the book are rocking the online outlets. Considering their personal backgrounds, perhaps you join me in being perplexed that even before its release, the book ranks #11 in the Amazon.com best-selling list in Business Ethics.
“Say what?” If you don’t know the story, here is a brief account. Suffice it to say that much more detail is available to you through the Internet. Jack’s second wife, Jane Beasley, found out about an affair between Suzy Wetlaufer and Welch. At the time, Suzy was editor-in-chief of the Harvard Business Review. Beasley delivered this information to the publication, and Wetlaufer was forced to resign in early 2002 after admitting to having been involved in an affair with Welch while preparing an interview with him for HBR. Personal and professional ethics? This did not turn out too badly for Beasley. While Welch had crafted a prenupital agreement, she had insisted on a ten-year time limit for its enforceability, and therefore, left the marriage with around $180 million of Welch’s money. That interview was never published. Suzy and Jack married in 2004.
This is not their first co-authored book. Randy Mayeux presented their first one, Winning (Harper Business, 2005) at the First Friday Book Synopsis. It reached # 1 on the New York Times and Wall Street Journal business best-selling lists. We did not present their next co-authored work, Winning: The Answers: Confronting 74 of the Toughest Questions in Business Today (Harper Business, 2006).
They both have another single-authored book. Randy presented a synopsis of Jack: Straight from the Gut (Business Plus, 2003). In 2010, Suzy wrote 10-10-10: A Fast and Powerful Way to Get Unstuck in Love, at Work, and with Your Family (Scribner). Randy gave that synopsis to several of our Creative Communication Network clients. I remember that audiences we delivered that synopsis to were not exactly thrilled at the quality of information transferred. In fact, at the Fort Worth Club, our event planner remarked that she wished she would have selected another book. Maybe her reputation backfired on that one. Of course, she didn’t write that one way to get unstuck is to have an affair with a famous married man. It certainly worked for her.
Note that both of these authors are very competent and successful. History will likely write Jack as the most successful CEO in American history. His style and substance led General Electric to a fast and furious climb to the top of elite and powerful businesses. All the labels, such as “Neutron Jack,” are applicable. His decisions were profound and effective. And, he believed in lifelong learning and professional development, even teaching courses on-site at the GE Learning Center. Many CEO’s don’t even know their company has a learning center, let alone take the time to go teach in it. Suzy’s role at one of the most prestigious business publications gave her strong credibility, as did her work experience at Bain.
Considering their reputation, most likely, this one will also fly to the top. It is not out of the question that you might hear a synopsis of this at our event. In fact, many of our regular attendees may push us very hard to present it. It will be exciting to see what the sub-topics will be from the Table of Contents. Only time will tell whether this one is heavier on style than substance. The title alone is appealing.
But, ethics? Is this really the best resource?
I know that we are still working on the August 1 First Friday Book Synopsis with two excellent books and our bonus program, but I am already looking forward to my September presentation. It has excellent reviews and plenty of strong publicity, including one by our blogging partner, Bob Morris. You can read his review published on this blog by clicking here.
The Talent Masters: Why Smart Leaders Put People Before Numbers
By Bill Conaty and Ram Charan (New York: Crown Business)
Here is a summary of the book from Amazon.com, and a review published in the Wall Street Journal.
If talent is the leading indicator of whether a business is up or down, a success or a failure (and it is) . . . do you know how to accurately judge raw human talent? Understand a person’s unique combination of traits? Develop that talent? Convert what supposedly are “soft” subjective judgments about people into objective criteria that are as specific, verifiable, and concrete as the contents of a financial statement?
The talent masters do. They put people before numbers for the simple reason that it is talent that delivers the numbers. Success comes from those who are able to extract meaning from events and the forces affecting a business, and are able to look at the world and assess the risks to take and the risks to avoid.
The Talent Masters itself stems from a unique combination of talent: During a forty-year career at General Electric, Bill Conaty worked closely with CEOs Jack Welch and Jeff Immelt to build that company’s worldrenowned talent machine. Ram Charan is the legendary advisor to companies around the world. Together they use their unparalleled experience and insight to write the definitive book on talent—a breakthrough in how to take a business to the next level.
Here is the book review published in the Wall Street Journal, December 8, 2010, p. A21
By ALAN MURRAY
A decade after Jack Welch stepped down as chief executive of General Electric, he still commands remarkable respect as a management guru. The company he once led has lost its magic, the business processes he developed to battle bureaucracy have become bureaucratic themselves, and many of the “graduates” of the Jack Welch school have since stumbled—think Bob Nardelli at Home Depot or Jim McNerney at Boeing. (Has anyone seen that Dreamliner yet?)
Yet Mr. Welch and the management mythology surrounding him continue, untarnished. “The Talent Masters” is the latest celebration of the Welch way. It’s written by Bill Conaty, the recently retired senior vice president for human resources at GE, and Ram Charan, the business adviser and author who often collaborates on books with ex-CEOs.
“The Talent Masters” rests on three principles that characterize the Welch approach to management: (1) A focus on talent development. Mr. Welch and the other “talent masters” in the book—we also hear from folks at companies including Procter & Gamble and Novartis—claim that they spend more than a third of their time developing their people. (2) Differentiation. Talent masters create a meritocracy by constantly evaluating their people—a process which, in Mr. Welch’s case, was derided by critics as “rank and yank.” (3) Candor. This is the ultimate Welch trademark: ruthless honesty in evaluating the performance of people and businesses.
By now the book’s principle-trilogy is familiar.
But the authors add to the Welchian wisdom by documenting some interesting examples. For instance, we learn about the day in 2000 when Larry Johnston, head of GE’s appliance business, flew to corporate headquarters in Fairfield, Conn., to tell his bosses that he was leaving to head up Albertsons, the supermarket chain. The news was a surprise to
Mr. Conaty, to Jeff Immelt—who was then making a transition to the CEO job—and to Mr. Welch.
All three tried to talk Mr. Johnston into changing his mind. But after determining that their effort was futile, the executives turned their attention to succession. Within a half-day they had agreed on who would replace Mr. Johnston and on who would fill three other slots down the chain of command. The quick action was possible, we’re told, only because the three men had been heavily involved in the continuous evaluation of the company’s top talent.
The authors compare GE’s rapid-fire performance in replacing Mr. Johnston with what happened recently at Hewlett Packard, when Mark Hurd was forced to step down after indiscretions involving a marketing consultant. The company, the book says, came “unhinged.” For the third time in little more than a decade, the HP board felt compelled to pick a chief executive from the outside—an implicit acknowledgment of failed succession planning. (Mr. Welch seems almost personally offended by such corporate inattention: The HP board, he told me in an interview before the World Business Forum earlier this year, has “not done one of the primary jobs of a board, which is to prepare the next generation of leadership.” Asked if he knew any of the HP board members personally, Mr. Welch said: “I wouldn’t admit it if I did.”)
Messrs. Conaty and Charan also show the forgiving side of Mr. Welch’s GE. They tell the story of Mark Little, who in 1995 was promoted to vice president of engineering at the company’s Power Systems group. Following his appointment, the group missed its numbers three times in a row, and Mr. Little was demoted. He suspected that his career at GE was over.
Instead, executives there worked with Mr. Little to assure him that he still had a future and to help him rebuild his career in a position that made better use of his talents. Today he is the senior vice president in charge of the corporate R&D center, and one of the company’s top 25 executives.
The book begins with GE-related examples, but some of its most arresting stories come from outside the company. A particularly interesting chapter involves Hindustan Unilever, Unilever’s $3.5 billion Indian subsidiary. The company routinely evaluates candidates for management jobs by putting several applicants together to discuss a specific business issue in a group. This allows the company to see how they interact with each other and who has leadership potential.
Another instructive anecdote comes from Adrian Dillon, Skype’s chief financial officer. Mr. Dillon tells of how, early in his management career, when he was working at Eaton Corp., he was accosted after a meeting by his boss, the company’s CFO. “That was a great meeting, but your problem is that you still think your job is to be the smartest guy in the room. It’s not,” the man told him. Instead, Mr. Dillon was told, his job was to “make everybody in the room think that they’re the smartest guy in the room. You’ve got to teach them what you know and what you do, not tell them.”
Overall, “The Talent Masters” offers a valuable window into the skills of talent development. And it makes a persuasive case, yet again, for the wisdom of the Welch way. But you do have to wonder whether, a decade after Mr. Welch’s retirement, it isn’t time to find a new icon for the rapidly evolving world of business management.
Mr. Murray is deputy managing editor of The Wall Street Journal and the author of “The Wall Street Journal Essential Guide to Management.”
I admit, I’m over my head, in so many ways, in so many areas. For example, Bob Morris (our blogging colleague) has written about, and obviously “gets,” these books based on brain research – I’m just pretty baffled. Maybe not enough of a science background; maybe just a general failure of intellect.
But, at the risk of violating my own policy about not getting into politically charged issues on this blog, let me share a couple of other “I don’t understand” issues that are in the news right now – and bothering me.
Item #1 – why are there so many who are so anti-union?
There is little doubt about this reality – there are a lot of people who are so very anti-union. But do they simply not know the past, or do they forget the past?
Because of unions, we have limits on how many hours companies can require people to work; we have paid time off; we have work safety. We have… the list really is quite long.
Does anyone remember the praise we lavished on Chesley Sullenberger after the miracle on the Hudson, when he, and a crew (as he always reminded everybody) of people, just doing their jobs, saved the lives of a plane-load of people? What does this have to do with unions, you ask? Sully was active in the Air Line Pilots Association (yes, that is the pilot’s union); he was the Air Line Pilots Association safety chairman, championing safety causes, concerned about flight hours, especially the need for proper sleep, for pilots. Unions care about safety and work conditions – which matter to everybody. I think his time in his work with his union helped make him the right pilot for the crisis that he faced.
I write this as we remember the anniversary of the event that propelled the International Ladies’ Garment Workers’ Union to its days of greatest effectiveness. The cause: The Triangle Shirtwaist Fire of 1911. Here’s some info (from the Huffington Post – note the paragraph from Women’s Wear Daily, from 1911, in its coverage of the event):
Triangle Shirtwaist Fire: A Look Back
March 25, 2011 marks the 100-year anniversary of the Triangle Shirtwaist Fire, which claimed the lives of 146 garment workers, mainly Jewish and Italian immigrant women, in New York City. The disaster eventually led to the establishment of better working standards and safety regulations.
Women’s Wear Daily sent over its coverage of the 1911 event. Some excerpts from the fashion newspaper’s page one story:
The lesson for the sewing trades to learn from the tragic fire at Washington place, New York, the terrible loss of life, seems to lie in the neccessity of more discipline and less selfishness which is concealed under the guise of personal rights. We are individualists in this country, and yet there comes a time in every industry when the individual should consider and should be made to consider the rights of a community.
This catastrophe will bring vividly to mind and will create the opportunity to inaugurate a fire drill and other protective measures in places where many people are employed. This would not alone guard against the repetition of so terrible a holocaust but would mean the starting of better discipline in many shops in the sewing trades.
Life today in the United States is lived at a tremendous pace. So many people are thrown into very close contact with others so that the slightest mistake by one may injuriously affect many.
Yes, I know that unions have at times “over-reached,” but do we really believe that companies, if left to their own, would treat workers well, and build a fair and safe workplace? Do we really? Sure, some would – but what about those which would not? Do you think some companies might lock a group of young women into a room, lock the exits, and make them work in conditions unfit for human beings, with no escape, even in the midst of a fire? Should there be any groups advocating for such workers? Put me on the side that says yes!
Everyone of us has benefitted from the work of unions. We should honor that, acknowledge that, remember that.
Item #2 – why are there so many companies who move “overseas” to avoid the tax rates in the United States? (General Electric is one of many — paid no taxes in the US last year).
This was the focus of a major segment last night on 60 Minutes. It was an enlightening segment. Only the CEO of Cisco agreed to appear on camera, and his case was clear. He made the following points (all from my memory of the interview; my paraphrase):
The United States, after Japan’s lowered rate goes into effect, will have the highest corporate tax rate in the world. Companies have a responsibility to its shareholders, so they would be irresponsible to pay this high tax rate if they can move operations overseas (in some cases, just an “office/headquarters, with few people) and pay a much lower rate, saving billions of dollars for their shareholders.
But…but… how can they claim that we have the greatest nation on earth and not support the needs of that great nation? Do they not realize that we have national expenses that far outstrip these other nations? Consider the military budget: the American military, that keeps the sea lanes open and thus the oil moving across the oceans into our gas tanks, is a very expensive “perk” for these companies. So, it should not surprise anyone that our taxes are higher. And if every company moves away, to countries without such a military, to pay a lower tax rate – then what? Do these companies think that the powerful navy of the Cayman Islands, or Switzerland, will keep the sea lanes open for their international business concerns?
So, yes, there are responsibilities to our shareholders – but what about the larger issues, our larger “responsibilities?”
By the way, in my opinion, this was the failure in this wonderful 60 Minutes Segment – this question was not asked at all.
So – I don’t get it. I, for one, am glad we have unions. And I, for one, am glad that we have the largest military in the world – it is a big world, and in this global economy, we need our strength – the strength of our companies, the strength of our workers, the strength of our unions, the strength of our military.
These are just two issues that concern me at the moment.
Cheryl’s view: It seems Jack Welch should play more golf and resist the temptation of making speeches. On July 21 the Wall Street Journal reported he delivered what I’m sure he thought was “straight talk” like he thinks he did in his book, Straight from the Gut. He told a convention of HR executives women had to choose between raising a family and having the corner office. Which rock have you been hiding under Jack? Maybe he forgot that last year’s CEO of the year as elected by peer CEOs, was Anne Mulcahy, CEO of Xerox, and mother of two sons. And I supposed he also hasn’t noticed Mulcahy passed the reins to the first Afro-American woman to lead an S&P 100 company, Ursula Burns, and (Oh, gasp Jack!) also happens to have a daughter and stepson. When Jack Welch entered the workforce and even possibly when he led General Electric, this might have been a “norm”, possibly his own stereotype at work. This is no longer the case. Jack might also want to start reading the stats on graduating MBAs; women in 2009 will surpass men in all categories: associate, bachelor, graduate and professional. By the way, the gap between men and women has been widening since 1982, the last year men exceeded women in acquiring degrees, in college degrees and is projected to continue until 2017, which is only as far as the projection goes. So, where will the most talented, experienced, and well educated people in the company come from, the future CEOs? My money is on the next generation of women, who, by the way, believe the wisdom of his other book’s title “Control Your Own Destiny, or Someone Else Will.” Thanks for the advice, Jack, now go play golf.
Sara adds: Jack, in the words of James Copeland, former Chairman and CEO of Deloitte & Touche worldwide in True Leaders (Bette Price and George Ritchesche), “Don’t breath your own exhaust.” Your pronouncement in the Journal is contemptible (a carefully chosen word from Merriam Webster’s online dictionary… “contemptible may imply any quality provoking scorn or a low standing in any scale of value.” The italics are mine). I believe your comments to be contemptible; having a low standing in any scale of value on a couple of levels. First level, you single out women leaders. Besides being transparently biased your idea begs the question, why shouldn’t ALL leaders, men and women, have the opportunity to have a life as well as incredibly successful careers? Then there’s the next level. It’s about BUSINESS RESULTS, Jack, not about appearances or sacrifice. By even uttering that comment I wonder if you’ve lost focus on the prize here. Jack, you should read a new Harvard Business Review (HBR) article, Social Intelligence and the Biology of Leadership (Richard Boyatzis and Daniel Goleman). It stands your antiquated version of leadership on its ear. In the article you will read about the negative impact a leader’s stressed lifestyle has on the success of the company they lead. The authors also provide a pathway to leadership that is healthy, balanced and produces great (get that, Jack, GREAT) business results. I wonder what heights GE could have climbed if YOU had been a different kind of leader.