July 26, 2006
News & Opinion: Fortune Says Welch Is All Wet
I am two weeks late on this story, but I thought there might be three of you who haven't heard it.
The Fortune cover story for July 31st is titled Sorry, Jack! : Welch's Rules for Winning Don't Work Anymore (But We've Got 7 New Ones That Do).
The business magazine says that the principles that worked for Welch during his tenure at GE and that are the basis for enormously popular books (most recent being Winning) don't work anymore.
Here is the breakdown:
|Old Rule||New Rule|
|Big Dogs Own the street.||Agile is best; being big can bite you.|
|Be #1 or #2 in your market.||Find a niche, create something new.|
|Shareholders rule.||The customer is king.|
|Be lean and mean.||Look out, not in.|
|Rank your players; go with the A's||Hire passionate people.|
|Hire a charismatic CEO.||Hire a courageous CEO.|
|Admire my might.||Admire my soul.|
I ignored this at first because of my bias. I am a GE alum and I think they are are an outstanding company. You don't do $150 billion a year in sales and not have a good business model.
My second problem is Fortune taking their poster boy of the last quarter century and then saying he is all wet. I realize this is a common technique of journalists and it sells magazines. You'll find your ever important quotes from other business leaders who don't agree with Welch's views (ex. Jim Donald at Starbucks said they never wanted to by #1 or #2) to bolster their case for their new set of rules.
I will give Fortune some credit for getting Welch's take on the article. I think he fires back pretty well.
In the end, I don't feel an article like this gets us any closer to being better businesspeople.
Other commentary on the article:
- Businesspundit - The New Rules: Fortune Takes a Shot At Jack Welch
- Escape from Cubicle Nation - Fortune admits Jack Welch is wrong - ranking employees really is stupid
- Patrick Altman - Ranking Employees