Free Book Summary : Winning This article is based on the following book: By Jack Welch with Suzy Welch Published by HarperCollins, 2005 ISBN 0-06-075394-3 384 pages

Jack Welch has been asked thousands of questions on getting business right. Even after his retirement as Chief Executive Officer of General Electric, his advice - on just about everything from coping with Chinese competition to devising killer business strategies – has been in great demand.

Most of the questions, however, come down to this one: What does it take to win? Jack assures everyone that first and foremost, winning is achievable. You must, however, learn what makes
winning happen.

One of the things Jack shares is what he calls “the biggest dirty little secret in business.” That secret is candor. Candor enables everything and everyone to operate faster and better. The lack of candor blocks smart ideas and fast action. If people don't express themselves frankly, they damage operations and the company greatly.

How does candor lead to winning? First and foremost it gets more people to interact. As a result, more ideas get discussed. Second, it generates speed. When new ideas are brought up they can be debated and acted upon quickly. Third, candor cuts costs by eliminating meaningless meetings and nonsensical reports that everyone already knows about.

So why don't we have more of it? It's because candor unnerves people. As children, we were taught to soften bad news or tiptoe around awkward subjects. Speaking your mind can lead to a lot of anger and resentment, so it's easier not to do so.

Candor is obviously very hard to instill in any group, but again, it's something that must exist in any company. Reward and praise publicly those who exhibit candor. You must remember though that showing candor is a genuine risk. In fact, it might even lead to some people losing their jobs. It will, therefore, be better if candor is instilled from the top. Open dialogue, however, can start anywhere. Candor works because candor unclutters. You do a lot of things for work even if they aren't easy. Candor should be one of them.

Another aspect of winning is differentiation. Companies win when managers make distinctions between top- and bottom-performing businesses and people. Managers should cull the weak and cultivate the strong. When every business and person is treated equally, companies suffer.

Differentiation is a way to manage people and businesses by allocating resources. Strong businesses or product lines should be invested in more than weak ones. You should use the same principle when dealing with people.

Managers need to assess their employees and treat the top 20% like stars. The middle 70% should be motivated and given adequate training and assistance. The bottom 10% should be let go.

It really is not as cruel as it sounds. Often, those who are let go are able to build successful careers in other industries. Remember that people are happiest and most fulfilled when they are doing something they are good at. In all probability, the 10% just aren't cut out for their current jobs. You must also remember that it is your responsibility to give people feedback on how they are performing.

In some companies, though, this process can be corrupted by favoritism and cronyism. This sort of system won't last and it will collapse under its own weight. One last thought. If it isn't already obvious, differentiation only really annoys the underperformers.

Mr. Welch, a native of Salem, Massachusetts, received his B.S. degree in chemical engineering from the University of Massachusetts in 1957 and his M.S. and Ph.D. degrees in chemical engineering from the University of Illinois.  He joined GE in 1960 and was elected Vice President in 1972 and Vice Chairman in 1979. In 1981, he became the eighth Chairman and CEO in the Company's 121-year history. He retired in the fall of 2001. Mr. Welch is a former chairman and a member of both The Business Council and the National Academy of Engineering and is a member of the Business Roundtable.

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