Success Factors: Candor & Differentiation

I have always been interested in the sometimes controversial Jack Welch, former CEO of General Electric. I have been a follower of Jack Welch since I entered management consulting in the 1980’s where myself and other freshly minted professionals would talk about Neutron Jack, Six Sigma and how he was changing GE.

While in Dallas last week, I visited a used bookstore and stumbled upon a used copy of Jack Welch’s book "Winning" published in 2005. I had some free time and picked it up.

The 2nd and 3rd chapters are insightful. One is titled Candor; the other Differentiation. Like his other books, I was impressed by his ability to articulate complex business subjects in an easy read without sacrificing too much detail.

In chapter 2 on Candor, Welch discusses how valuable candor is in today’s fast and global business but how rare it actually is. His best quote is “since retiring from GE, I have come to realize I underestimated its rarity. In fact, I would call lack of candor the biggest dirty little secret in business.” Wow, I couldn't agree more but to hear it from one of the most celebrated and at time feared CEO is astonishing. Imagine, the guy known for grueling questions and follow-ups called this the "biggest dirty little secret in business".

Then in chapter 3 on Differentiation, Welch summaries his passion and love for Differentiation, a management method in which employees along with business divisions and product lines are separated into the top performing 20%, middle 70% and bottom performing 10%.
The best lines on differentiation are
-“I learned it (differentiation) on the playground when I was a kid. When we were making a baseball team, the best players always got picked first, the fair players were put in the easy positions, usually second or right field, and the least athletic ones had to watch from the sidelines. Everyone knew where he stood.”
- “middle players worked their tails off to get better, and sometimes they did, bringing up the quality of play for everyone. The kids who couldn’t make the cut usually found other pursuits, sports and otherwise that they enjoyed and excelled at.”