In recent months the business press has been filled with stories of the weak performance of General Electric. Many comparisons have been made to the lack of leadership in the last 15 years versus that which Jack Welch provided during GE’s glory years in the 1980’s and 90’s. One of the most controversial aspects of Welch’s time at GE was his so called “rank and yank” procedure, where he would fire the bottom ranked 5-10% of his managers each year, regardless of absolute performance. He earned a reputation for brutal candor. He rewarded those ranked in the top 20% with bonuses and stock options.
Bob's Gutsy Leadership Blog
Bob regularly writes blog posts and articles with his areas of focus being leadership, organizational effectiveness. Below you will find the titles and hot-links of his most recent efforts:
It was 2015 when the acquisitive Brazilian investment giant, 3G Capital, took over Kraft Foods and merged it with HJ Heinz, the catsup maker, which it already owned. In this deal, Warren Buffet provided much of the cash, knowing full well that there were profits to be made, given the strong reputation of 3G Capital of being world-class when it comes to cost-cutting.
Innovation is a topic that you hear a lot about these days. How does it happen? I think you can learn a lot by looking at examples that have occurred over the years that have had a truly significant impact. Here are two classics: Note how the leader had a very specific idea that he believed would have a very significant impact on the world.
Founded 25 years ago, BlackRock has quickly become not only the world’s largest asset manager ($5.7 trillion under management), but also the dominant leader in the fastest growing investment product; exchange-traded-funds (ETF’s). The company went public in 1999 for $14/share and today BlackRock’s stock trades in the $465/share range. Over the past 5 years, it is up +145%. Separately, a recent Harvard Business Review (HBR) article reported on research dealing with the role of “sense of purpose” in enabling companies to attract top talent and achieve strong results. They single out BlackRock as a prime example.
The CEO of Tesla, who is also the Chairman and Co-Founder, is clearly an amazing visionary. The Tesla all-electric car has created a major inflection point in the automobile industry and with every passing day we are seeing more and more momentum shift toward the use of all-electric cars.
Back in 1999, Xerox was the king of the document copying business and had just achieved its peak market value of almost $50 billion. In Asia, Xerox operated with a partner, Fuji, and their copying machines were sold under the name of Fuji Xerox.
It was 2013 when the current CEO took over the leadership of the classic retailer Sears. His task was to stop the share price decline; virtually a straight line from $120/share in 2007 to $45 when he took over in 2013. Unfortunately, he has been unable to halt that decline and it is now fairly clear that Sears is on its way to bankruptcy. It just announced it will be closing 100 more stores in 2018, and its stock price is currently in the $2.25 range.
The book called Rescue of the Bounty is an exciting, true story of an ill-fated, 2012 voyage of a fifty-year-old, 180 foot, wooden ship called Bounty. It was a replica of the HMS Bounty, a classic three mast ship of the late 1700’s, and was used in movies such as Mutiny on the Bounty and Pirates of the Caribbean.
In 2006 General Electric launched a four-day training program called Leadership, Innovation and Growth (LIG) at their famous management development center in Crotonville, New York. In the next few years, thousands of GE managers were put through this program. The core focus of this program was the importance of teams and consensus in accelerating the pace of change.
When the current CEO of Microsoft took the job in 2014, the company stock price had been floundering for the past 13 years in the $25-$37 range. He quickly moved into action to focus the company’s future on cloud infrastructure. The task of getting the employee base and customers on board required constantly delivering the cloud message. This single-minded focus and constant communication of the cloud direction was critical in the evolution of Office to the cloud service Office 365 and the emergence of Azure, an open, enterprise-grade cloud computing platform. Today, Microsoft web services are a strong and fast growing #2 behind Amazon’s web services and Microsoft’s stock price is in the $88 range.