Kuukausi: tammikuu 2021

How was the book?

”This is the only book you have to read about leadership” was the recommendation to me. Sounds like a great challenge. Of course I took the challenge.

Will the “Winning” be a classic or not? When I started to read the book I was thinking that this book smells like a classic. Book is built clearly from the top management agenda. It creates ideas how you might be winning. What you need in order to win. And how to act if you want to win.

First, Jack Welch is very clear on definitions such as mission, values, leadership etc. And he is also clear on defining what’s the scope of top management, how to run business, what do to with people.

Second, the book is filled with has rule of thumb:

·      Three steps how to develop your strategy, five slides and big a-ha.

·      Five steps of crisis management.

·      Nine rules for a leader what he should do.

·      Three common mistakes with (internal) start-ups.

·      The acid test for assessing people about integrity, intelligence and maturity.

·      4E (and 1-P) where you should be looking energy, energize, edge and execution. Then you might find passion.

·      ”Winning” has a great deal of resembles with David Ogilvy’s thinking about that ”the good ones know more.”

Third, Jack Welch is very fond with candor, people and change. He truly enjoys the concept of candor and the behavior that it sparks. Welch is open and very sincere about people. The 20-70-10 rule where people are divided into top 20 percent, middle 70 percent and bottom 10 percent. Top 20 is showered with gold. Middle 70 is kept motivated. And underperformers are helped to find better opportunities from outside. Everybody’s position is based on merits and performance. The top20 cannot be filled with buddies and head nodders.

Change should a relatively orderly process, but “you have to be changing all the time if you want to stay in the game, let alone win”. 

What are the key learnings of the book? 

Leadership

–       Is about people doing business with other people. Don’t get technical.

–       Leaders use candor and talk about winning.

–       “Internal communications can be your worst enemy. In case you fail in it.”

Strategy and budgeting

–       Find your big a-ha, communicate and execute

–       No big think. Make sure it is somewhat concrete

–       It means making clear-cut choices about how to compete. Way forward?

–       “You pick up a general direction and implement like hell.”

Build capital

–       This can be your understanding how things work, with whom and with certain pace.

–       Spare ”capital of others” i.e. your boss, collaques etc.

Get luck

–       How to get promoted? First you need some luck.

–       A chance plays a part in promotions.

How should we change according to the book?

Bring change, people and candor to the agenda. Topics that we all should use more and more.

What should I personally do? 

Use the five strategy slides and develop a big a-ha.

Summary

Well, was this a classic? It might be. Winning is easy to read and remember. Even inspiring. There is no threshold in Welch’s key messages. He has great insights on how run a global giant and he also recognizes that people are people.

The book in six words – Becoming a leader starts with your luck! 

How was the book?

Why should you read ”In Search of Excellence” book. Thomas J. Peters and Robert H. Waterman Jr. wrote the book in early 80’s and it was published 1982. The companies that were reviewed in this book have had truly excellent financial performance for the past twenty years in order to be part of the analysis. So the book is nearly 27 years old, the cases are much older than 27 years and some definitions used in the book are not very contemporary. Before starting this review we can ask one crucial question – are the learnings of Peter and Waterman still valid?

My answer is yes and no. No, because many of the learnings are elementary and self-evident from the current corporation’s perspective. Yes, if you have not lived the hard facts of running a large corporation. The book is needed to understand the basics of a large corporation. It’s also beneficial to learn how the current management theory has evolved from works of Peter Drucker to Jim Collins. This a ”back to basics” kind of book. The modern corporation has all or should have all these features by now that Peters and Waterman are explaining.

”In Search of Excellence” is a business book based on analysis of 43 American large corporations and out of those were interviewed 21 corporations. The method is like in the ”Good to Great” by Jim Collins. A side notion is that Peters and Waterman were ahead of their time, because they cited the famous duo – Kahneman and Tversky, on the representativeness i.e. how we are more influenced more by stories than by data. 

Also in the book was introduced a practices and concepts novel in corporate life globally in early 1980’s. For example a practice called ”MBWA” (Management by Walking Around) which meant that the management should also be visible. People working for you need to have informal constant contact or communication with management and being present is one of the most efficient ways of communication. Importance of culture: ”Profit is like health. You need it, and the more the better. But it’s not why you exist.” Culture as a corporate concept started to emerge in the early 1980’s.

 The book that I read was 340 pages long. The authors used 1/3 of the book before they even got to the point i.e. started to present results from the analysis. Second critique is that the results presented were only qualitative. I would have preferred quantitative analysis also. This critique does not lessen the wealth of understanding of management theory. 

 What are the key learnings?

 The writers were eager on forming a new theory how the excellent corporations ”behave”. Their new theory was built on three pillars:

1.    Breaking old habits and shifting attention which includes

a.    Regular reorganization

b.    Major thrust overlays

c.     Experimental units

d.    Systems focusing on one dimension

2.    Stability

a.    Simple, basic underlying form

b.    Dominating values (superordinate goals)

c.     Minimizing/simplifying interfaces

3.    Entrepreneurship

a.    ”Small is beautiful” units

b.    Task forces, and other problem-solving implementation groups

c.     Measurement systems based on amount of entrepreneurship, implementation

The new theory is supported with eight basics of excellent management practice or attributes that the writers found from the excellent companies:

1) A bias for action, for getting on with it.

The excellent companies had the standard procedure of ”Do it, fix it, try it.”

2) Close to the customer. These companies learn from the people they serve.

Excellent companies are close to the customer. Especially they are very close to the lead users. Other companies just talk about it.

3) Autonomy and entrepreneurship.

”The most discouraging fact of big corporate life is the loss of what got them big in the first place: INNOVATION”

4) Productivity through people.

”Nothing is worse for the morale that a lack of information down in the ranks. NETMA (Nobody Ever Tells Me Anything)”

5) Hands-on, value driven.

Figure out your value system and decide what your company stands for.

6) Stick to the knitting.

Robert W. Johnson: ”Never acquire a business you don’t know how to run.” When acquiring a company stick very close to your knitting and you will outperform the others.”

7) Simple form, lean staff.

Top-level staff are lean, keep the corporate staff fewer than 100 people and newer go for the matrix organization.

8) Simultaneous loose-tight properties.

Autonomy pushed to the shop floor and fanatic centralists around the few core values they hold dear.

Excellent corporations were brilliant on the basics. No hoopla, no nothing fuzzy. Simply K.I.S.S. The companies worked very hard to keep things simple in a complex world. They wanted to be simplistic. As Peters and Waterman elegantly express: ”They persisted. They insisted on top quality. They fawned on their customers. They listened to their employees and treated them like adults. They allowed their innovative product and service ”champions” long tethers. They allowed some chaos in return for quick action and regular experimentation.” We could stop here. This is the best that any book can offer. In these six sentences the writers explained the core formula of an excellent corporation.

How should we change according to the book?

The experienced boss has good instincts – his vocabulary of old-friend patterns tells him immediately whether things are going well or badly. Besides the instinct an excellent boss needs day-to-day management practices according to the book are:

·       Know your numbers, because business is a numbers game

·       Build momentum by accumulating small successes

·       Have only three to five objectives for the year

·       Be action oriented to maintain innovation

·       Support diversity to maintain creativity

·       Ask for one-page ”memos”

·       Embrace simplicity

·       Do MBWA IRL (or with Social Media)

Other notions about corporate life that I would interesting in the book were:

·       Excellent companies can separate creativity and innovation. ”Creativity is thinking about new things. Innovation is doing new things.” So support diversity.

·       Poorer performing companies may have strong cultures, but the cultures are dysfunctional.

·       Past personal success apparently leads to more persistence, higher motivation or something that makes us to do better.

·       People are good on holding six to seven pieces of data in our short-term memory. And that’s why even companies should focus on few key business values and few objectives.

Useful one-liners:

·       ”Label a man a loser and he’ll start acting like one”

·       ”Nothing succeeds like success”

·       ”More than two objectives is no objectives.” Watchword of Texas Instrument.

·       ”Sell it to the sales force.”

·       ”What gets measured gets done.”

·       ”But above all try something” Franklin Delano Roosevelt.

What should I personally do?

Support diversity and embrace innovation.

Summary

The book in six words – ”Eighty percent of success is showing up” Woody Allen. 

Peter Drucker: The Effective Executive – The Definitive Guide to Getting the Right Things Done

How was the book?

Peter Drucker is king of listing things. It all starts with his main messages. He has two main messages on how to become the effective executive. To become effective the executive needs to do certain simple things. And to learn how to become the effective executive. ”All the effective ones have had to learn to be effective”, because effectiveness is not inborn.

What are the key learnings?

How to become the effective executive? The first you have to manage oneself for effectiveness. Second, to learn to use the scarcest resource – time, correctly. Third, you have to have an action plan otherwise you will become a prisoner of events. Fourth, not only executives decisions matter – decisions made at every level matter.

There are eight simple practices that an effective executive must follow:

1. They ask ”What needs to be done?”
2. They ask ”What is right for the enterprise?”
3. They develop action plans.
4. They took responsibility for decisions.
5. They took responsibility for communicating.
6. They were focused on opportunities rather than problems.
7. They ran productive meetings.
8. They thought and said ”we” rather than ”I”.

The first two gives them the knowledge they need. The next four helped the to convert this knowledge into effective action. The last two ensured that the whole organization felt responsible and accountable.

Chester Barnard (1938) brought up the wisdom that organizations are held together by information rather than by ownership or command.

Executive realities are:

• The time belongs to everybody else than the executive.
• Executive himself have to change, otherwise nothing changes.
• Ineffectiveness comes from within the organization.
• Executive is in bubble, because he is within an organization.

Don’t miss the tide – changes in the trends. These will determine your success or failure.

How should we change according to the book?

First of all the executive is expected to get the right things done. Brilliant insight is not an achievement, getting the right things done is. Effectiveness is what executives are being paid for. Without effectiveness there is no performance.

Executive is not the same thing as a leader. Only few people have the same qualities – being a leader and an executive. But the habits of effectiveness can be learned. Five essential habits are:

1. Know Thy Time. Know where your time goes.
2. Focus on outward contribution – results.
3. Build on strengths.
4. First things first. Concentrate on few major areas.
5. Make effective decisions.

Know thy time; start with your time – not tasks, by managing your time and cut back unproductive timeconsumers, because time is the only limiting factor. Ask yourself ”What would happen if this were not done at all?”

How to prune the time-wasters:

1. Identify time-wasters?
2. Maybe your organization is overstaffed?
3. Malorganization generates excess meeting?
4. Malfunction in information?

Top management should always be asking from himself ”What Can I Contribute”. It’s his way of keeping track that he accountable for the performance of the whole. ”To focus on contribution is to focus on effectiveness.” Performance is needed in three major areas:

·      Direct results comes always first.

·      Building values and their affirmation.

·      Building and developing people for tomorrow.

Top managements contribution is needed in these areas:

·      Communications which is in the center of managerial attention.

·      Teamwork that makes things click.

·      Individual self-development.

·      Development of others.

The effective executive knows that every people-decision is a gamble and that their subordinates are not paid to please their superiors; they are paid to perform. That’s why the effective executive should concentrate on hiring people with strengths that he or his team is missing. ”One feeds the opportunities and starves the problems.” Also not to hire people on an ”undoable job”, a man killer. What is undoable job? It’s any job where two or three men is succession have been defeated although these individuals have been performing well in previous assignments. 

Staffing from strength starts by:

1.    The effective executive must make sure that the job is well-designed.

2.    Make each and every job demanding and big.

3.    Start by looking what the man can do (right people on the bus and right people on right places).

4.    Remember to put up with weaknesses.

Effectiveness is concentration, because the effective executive ”do first things first and they do one thing at a time”. Concentration is the effective executive’s ”only hope of becoming the master of time and events instead of their whipping boy.”

The effective executive always work under disagreements. It’s part of the package. Main reasons for disagreements are:

·      Without disagreements one becomes prisoner of the organization.

·      They provide alternatives.

·      It gives a possibility to ask that is the decision necessary, because it is a risk of shock.

To make decisions is the specific executive task. Right decisions will grow from the clash and conflict of different opinions and from consideration of competing alternatives. ”Yes” or ”no” decisions are not decisions. Decisions are judgements. Decisions are always a choice between ”almost right” and ”probably wrong”. The effective executive makes effective decisions via s systematic process. The elements of effective decisions are:

·      Strategic vs. generic. He has think through what is strategic and what is generic. Always assume that the problem to be solved is a generic and there is a rule how to solve it.

·      Goals; what are the objectives the decision has to reach i.e. what goals to reach. For example shall the decision increase market share.

·      Do the right thing; what is right rather than acceptable.

·      Execute; turn the decision into action.

·      Get feedback. Follow the consequences of the decision, did it reach the goals, do you have to iterate. 

What should I personally do?

Executives are not paid for doing things they like to do. They are paid for getting the right things done.

Summary

The book in six words – Don’t be a prisoner of events.