InReview – Issue 44

Winning by Jack Welch with Suzy Welch; New York, Harper-Collins, 2005; xi, 372 pp.

Jack Welch worked for General Electric for over 40 years, including 20 as chairman and CEO. Since retirement, he has been writing, speaking, and advising Fortune 500 companies. Suzy Welch is the former editor of the Harvard Business Review and Jack’s wife.

Jack Welch has the reputation of a hard-charging business man who will trample anyone to win. With this title, I am sure some will expect advice on how they can do the same. Wrong! This book contains outstanding insights on managing and leading an organization.

The book is divided into four major sections: “Underneath It All” deals with the basics of running a business, including the mission, values, and culture of the organization. “Your Company” discusses hiring, rewarding, and firing people, as well as dealing with change; and dealing with crises. “Your Competition” is more inwardly focused than it sounds, covering strategy, budgeting, growth, mergers, and quality. “Your Career” is about what each person must do in managing his or her own career, from dealing with bosses, to deciding when to stay and when to leave, to working out work-life balances. There is also an introductory section at the beginning and a loose ends section at the close of the book.

The chapter titled “Parting Ways” (basically, how to let a person go) is worth the price of the book, since so few leaders do this well. Welch looks at different scenarios where this may be necessary (ethics violations, economic downturns, poor performance) and discusses ways of dealing with each. “Unless you are a complete jerk, you dread the whole thing, especially the conversation itself,” he writes (p. 129). He candidly looks at his own experience citing examples where he did this poorly. A second key chapter is “Budgeting.” He analyzes all of the wasted time and games people go through in most companies to achieve their budgets, and offers a distinct approach developed at GE. The discussion on creating a boundaryless organization is also excellent.

One weakness of the book is Welch’s tendency to generalize from his own CEO experience. For example, in the “Crisis Management” chapter, he concludes, “You will never be happy for what happened, but stepping back, you’ll see something that might surprise you — the whole place looks better than ever.” Clearly, Welch did not work at Enron or Andersen!

This limitation aside, I strongly recommend this book to anyone with leadership responsibility. In fact, it provides a great business perspective for any working person.

Reviewed by Al Erisman

◊ ◊ ◊ ◊ ◊

China: The Race to Market by Jonathan Story; London, Financial Times Prentice Hall, 304 pp.

Jonathan Story is one of the few writers who can relate so credibly the connection between business decision-making and public-policy making. The Shell fellow in international transformation and professor of international political economy at INSEAD, one of Europe’s premier business schools, Story has provided acerbic commentary on a wide ranging set of topics, from post-Franco Spain, to the United Kingdom’s Thatcher revolution, to the strategic struggles of Arab states, to European integration, and now to the rapidly emerging systemic changes in China. In China: The Race to Market, he describes the political and economic developments in the emerging China of the 21st century.

The first part of the book builds a context for judging the changes taking place in China. The starting point is Deng Xiaoping’s 1978 policy of reforms that combined marketization and Communist Party primacy. Story raises the issue of what parts of China’s culture will be retained, what parts will be adapted, and what parts will be jettisoned as Chinese society advances along a path of socioeconomic development initiated by Deng’s reforms. As a realist, Story counters the prophecies of both the China enthusiasts and the China pessimists. He portrays China as an unstable mix of Confucian ethics — that ultimately promote hierarchy, harmonious conduct, with the family as the primary social unit — and the persistence of the communist state.

Today’s China is committed to economic development in order to both feed its own population, and to respond to the tantalizing allure of capitalistic gain in a global economy. By 2010, 1.5 billion Chinese will account for 20 percent of the world’s population living on 4 percent of the world’s arable land. Up to 800 million rural Chinese are expected to migrate to the market economy of the cities during the next 10-20 years.

Story forces issues that must be addressed. For example, how can the Chinese Communist Party govern under the forces of such economically based change? As recently as 15 years ago, legions of young rural soldiers squelched an insurrection at Tiananmen Square. As these people move to the cities, they will either be busily assimilated into jobs in the new market economy or be malnourished and begging on the streets. Story carefully explains how China must manage its way into a greater role on the world stage in the 21st century. He recounts in detail the policy reforms, China’s reliance on foreign investment from the Diaspora, as well as from the G8 economies, and what this could mean for those outside of China who harbor interests either in forming economic relationships with China-based enterprises or in establishing China-domiciled activities.

Story closes the book with a provocative retrospective scenario written from the perspective of business people in the year 2060. Some will find it disturbing, others may simply find it not what they expected. Jonathan Story is masterful in inspiring reflection on a topic that seems otherwise over reported in the contemporary press. It’s a good read: compelling, thought provoking, and laced with sound and practical business advice, especially for the contemporary American or European executive.

Reviewed by David Gautschi

◊ ◊ ◊ ◊ ◊

Ethics After Enron: How Can We Teach Ethical Courage in Business and Public Life?

From a lecture given by Sherron Watkins, at Pittsburgh Theological Seminary, September 15, 2005.

Sherron Watkins was a vice president at Enron — and the Enron scandal whistleblower. At a recent lecture, she described her experience of exposing the crimes that led to the downfalls of Enron and Arthur Andersen.

I’d like to highlight a few interesting points she made about commonalities she shared with two other prominent female whistleblowers: Coleen Rowley and Cynthia Cooper. Rowley exposed how 9/11 could have been prevented with better coordination of information the government already had, while Cooper exposed fraudulent accounting at WorldCom, leading to the largest bankruptcy in history.Watkins noted three aspects they shared, along with ideas on why these were important.

First, they all grew up in small towns. Growing up in a small community inspired her to believe that she could make a positive difference.

Second, they all had deeply religious (Christian) parents. This profoundly influenced their sense of right and wrong from an early age.

Third, they were the main wage earners in their households. Men often over-invest their egos in their careers and can sometimes get over occupied with success, at any cost. Defining career success, within a moral context, is key. When in doubt, there’s a lot to be said for asking, “Would my mother be proud of this decision?”

Contributed by Gerard Beenen