How We Intend to Win

November 30th, 2010 — 6:00am

I’ve been reading Jack Welch’s book “Winning”. It’s advice about sound leadership practices in business. He was the CEO of GE for 20 years, so he has a lot of experience behind what he writes.

There’s an underlying theme of approaching business as competition between companies, with winners and losers in that competition. I think that accurately reflects reality in free market societies like ours, and it’s quite different than a solely customer-focused approach.

This theme comes through, for example, when he advocates evaluating business divisions and rewarding their managers based on performance compared to the competition, rather than made-up budget targets.

The same theme comes through in his proposal of a simple strategic planning process that analyzes one’s business and the competition looking for a “big aha”, a strategic opportunity to beat the competition with better product, etc., followed by intense implementation of that one thing. For example, in GE’s CT scanner business, the big aha came when they observed hospitals’ frustration with the cost of frequently replacing million-dollar machines as the technology improved. Their strategy was to come out with a line of CT scanners that could have their hardware and software upgraded for a fraction of the cost of a new machine, and this propelled them to the #1 spot in that market. It was one simple strategy.

In line with this, Jack says a mission statement should be a statement of “how we intend to win” in this business. I think that’s a very clarifying idea for any for-profit business.