Winning by Jack Welch

Today, my boss showed an interview of Jack Welch when he was on his book tour for his then-new book, Winning. The interview contained all of the Welch-like outlooks that anyone in business has come to know well; f nothing else, he is remarkably persistent and consistent. Though I disagree with some fundamental beliefs he has about managing a company, I do think he provides excellent food for thought for today’s business leaders.

Off the bat, I have to admit that I have experienced Welch-style management first hand. I interned at The Home Depot for my summer between my years of business school. And though Welch never worked there himself, one of his proteges, Bob Nardelli, was the CEO for over 6 years. We all know how that played out, and there are numerous articles that have been written about the damaging culture of that place.

Many of the troubles that The Home Depot is facing now have nothing to do with the housing market. They have everything to do with the fact that in 6 years Nardelli decimated the culture that made that company great. People were afraid of him. He had dirty stores with low service levels and focused on the large professional contractor, a customer who was never all that interested in The Home Depot. They consequently sold the business after Nardelli’s termination. While Nardelli tried very hard to play hardball the way Mr. Welch taught him to, he forgot the lessons of shedding what is not essential, focusing on others when you are in a leadership position (as opposed to oneself), and realizing that a great company never believes they are best so they continually seek to learn and improve.

Where I strongly disagree with Welch is in his philosophy that is the namesake of his book: winning. He says a company’s job, its only job, is to win. He goes on to say that from winning, all good things come. My question to him would be, “Do you win at all costs, by any means necessary?” There are a lot of companies that got very large, fantastically wealthy, by completely disregarding the environment, by squeezing every last drop of margin out of their suppliers, and treating their people with less than respect. Wal-Mart is a great example of all of these operating principles. Now they’re working hard to reverse their ways. They certainly won by Welch’s definition. But was it worth it?

I would amend the mission statement of a company by saying that it’s job is to win with integrity. And by integrity I mean that it must consider that the communities in which its employees, suppliers, and customers live and do business are also stakeholders in their business decisions, as much as its stockholders. If a company wins and puts the health and well-being of its communities at risk, then in the long-run we all lose.