In his book The Real Life MBA, Jack Welch has a great chapter called “Overcoming a Whacking.” This is relevant to how businesses can start to recover from the economic pause created by the pandemic.
Here are my notes:
Overcoming a Whacking
…and getting better because of it
Business is like sports—fast, competitive, strategic, teamwork, nuance, surprise
Sometimes outright calamities, but sometimes whacked because not prepared. Didn’t see something coming.
- Own your whack: distracted, frightened, depressed workers can’t fix anything
- Hang on tight to your best
- Get maniacal about drivers of cost, performance, and growth. Using data as guide.
- Reinvent your strategy process
- Reality check your social architecture
- Worry more productivity
1. Own the whack
Know what happened and gain courage. Distracted, frightened, depressed workers can’t fix anything.
2. Hang on tight to your best
When a company gets in trouble, often knee-jerk reaction of firing people without consideration of performance. Often because no performance appraisal system, and want to show board how fast they are acting and deeply they are cutting. So take the easy way out—fire 10%, or cut salaries 10%, or buyout package to any worker willing, and highest paid and most qualified tend to take
Epitome of weak, cowardly, demoralizing management. Why would you incentivize your best out the door and risk setting off a mass talent exodus?
You’ll never get out of a hole without your best people. So in hard times, must do the counterintuitive and even courageous—give your best people more in current pay and long-term performance based equity, and err on side of too many participants than too few.
This is the time, of all times, to unleash the generosity gene. The best stay, and then others stay.
“Your best people are your best hope for survival and success. Do what it takes not to lose them.”
3. Meticulously search for ways to improve every part of the business
Meticulous does not mean slow!
Determine the true drivers of costs and growth
4. Reinvent the strategy process
Not bi-annual session with elaborate presentations
5 slide approach
Draw the best people from every part of the organization to create
- Competitive playing field; who they are, strengths and weaknesses. Get into detail.
- All of competitor recent activity—products, tech, and people moves that have changed the landscape.
- What you’ve been up to in same regard over same period
- What’s around the corner
- Your big, wow-worthy, winning move to change the landscape
Find a smart, realistic, and relatively fast way to gain competitive advantage
5. Reality check your social architecture
= How the business has its people arranged