Tuesday, January 06, 2009

Success Secrets: Self-management the GE Way?

I recently posted a video of Jack Welch, ex-CEO of General Electric, speaking brilliantly at MIT. In the video, he reiterated some of the key practies he used to power GE to dominance. Can Jack Welch’s techniques, used to manage corporate behemoth General Electric, be used in our individual efforts towards personal achievement? Yes, they can.

Jack Welch Technique: 20/70/10 (Reward the top 20%, encourage/coach the middle 70%, fire the bottom 10%)
In our personal projects, we can get deeper and deeper into what works. This area is equivalent to Jack Welch's "top 20%". We should concentrate on doing more in the areas in which we are successful. These are “golden”. These areas include our natural aptitudes. We should expand this territory by meeting more people in our field, stressing our core competencies, and getting training in contiguous and appropriate skills. Toyota stresses continuous improvement down to the tiniest level…and it’s already the best-in-class automaker. Charlie Munger has suggested that the best results we are getting should be the benchmarks for the next investments we make. In other words…use our best to make the rest better.

The “middle 70%” is the area of our average aptitudes. This is the area where we may not be outstanding, but it includes areas that are important to our lives. These areas (perhaps diet, exercise, “giving back”, etc) are amenable to an organized approach to productivity (checklists, regular monitoring, etc). They are not “natural” for us, but they are important. We can improve in them, and we must, while taking into account that we may not be “stars” in that particular firmament.

The “bottom 10%" corresponds to what’s not working. Relationships, goals and plans, outright failures. So, how do we “fire” the bottom 10% if it’s only ourselves? First, we can outsource. If we are not organized, we can hire a consultant who can help us organize. If we dress badly, we can get a personal shopper. Another method is to “outsource” the job to software. I felt I needed budgeting help recently so I found YNAB, a superb budgeting program. It’s a lot more organized than I am and much better at keeping categories and totals straight.

Another technique: “fire” what’s not working. Just stop doing it. Stop watching TV shows that are meaningless. Stop hanging out with whiners and complainers. Stop consuming food and drink that are bad for you. “Fire” the unproductive behaviors and people in your life.

Jack Welch Technique: Let employees repeatedly know where they stand
Welch comes down hard on bosses that fire without warning. He is a champion of regular employee reviews. This concept is not far from Drucker’s “What gets measured gets done”. So, in our personal goals and plans, how regularly do we sit down with ourselves and review? Do we actually know what’s working? Do we have benchmarks to check for our income, health, contacts, learning goals, business plan? The better-specified our activities are, and the more frequently measured, the more successful they will be. Forget about keeping track “in your head”. It’s virtually impossible. And, the more categories you are measuring, the fuzzier your “off the cuff” reviews will be.

Jack Welch Technique: Spend 5% on planning, 95% on execution
Plans are great, but they always change. Military planners know that planning is crucial, but that all plans get torn up the moment the battle starts. We must avoid perfectionism, which may be procrastination in disguise. All important things are “hard”. All important tasks involve painful new behaviors, learning, adjusting, and just plain hard work. Life is too short not to get it done. Furthermore, life moves so fast that an extended period of planning, instead of just working, may, in itself, make the plan outdated and obsolete. There is no substitute for actually “doing it’

Jack Welch Technique: A manager’s job is to constantly fire up the troops.
Well… YOU are the “troops”. How often do you read and write positive affirmations? How often do you visualize success? How about multiple levels of success? 1 year out? 5 years out? 20 years out? Do you keep a journal of good things that happen to you? Compliments people pay you? Did you frame that first check from the new business? Do you keep a “dreams list”? Remember, you are a human being, not a machine. Your fuel is emotion. Passion. Even envy, greed, and lust have their place. Get the fires burning. Never let them go out. Jack Welch is still going strong. He knows whereof he speaks.

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