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Technology Rewriting the Rules of Business 200

Posted by Zonk
from the smaller-is-better dept.
theStorminMormon writes "Fortune magazine is running a story describing the overthrow of Jack Welch's old rules of business. (Welch responds here.) Although the article lists Google and Apple as two paragons of the new rules of business, it fails to note that the old rules of business originated from straight manufacturing firms while the new rules of business are coming from the (more service-oriented) tech sector." From the article: "Steve Jobs has emphasized that Apple hires only people who are passionate about what they do (something that, to be fair, Welch also talked about). At Genentech, CEO Art Levinson says he actually screens out job applicants who ask too many questions about titles and options, because he wants only people who are driven to make drugs that help patients fight cancer."
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Technology Rewriting the Rules of Business

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  • Crazy Ideas (Score:3, Interesting)

    by mrxak (727974) on Tuesday July 11, 2006 @01:38PM (#15699427)
    It's always the crazy ideas that change the world. Of course not every crazy idea is a good one, and there are thousands of business that have gone under for thinking a little too outside the box. If you look around, there's really only one Amazon, only one Google, only one Apple. Companies that operate in more traditional ways seem to last longer on average, but nowadays they're often not leading things.
  • by Tackhead (54550) on Tuesday July 11, 2006 @01:41PM (#15699463)
    Jack Welch started at GE in 1960 as a junior engineer, worked his way up to CEO by 1981, and grew the business by $400 billion during his tenure from 1981-2001.

    From his rebuttal:

    > When has there ever been a divergence between shareholders and customers? No one is out saying, "Let's screw this customer today, and if we do, our share price might go up 20 cents." They're just not doing it.

    25 years later, the secret of his success slips out: he has never owned a wireless phone.

  • by PCM2 (4486) on Tuesday July 11, 2006 @01:43PM (#15699478) Homepage
    "Hire passionate people." Well, if that isn't touchy-feely management at its best.

    Welch's rule was to grade your players and go with the A's. Some of us might call that a meritocracy. To the B or C graded employee, of course, it looks like an unbalanced, unfair gold-key system driven by self interest on the part of senior managers.

    What's the alternative? "Hire passionate people."

    Am I the only one who imagines the following conversation: "Look, Bob, I know you're working hard. Your code is better than everyone else's on the team, and that's great! You did a good job getting everybody working together on that one project, too, and you were right about cutting out those side jobs -- if we were still eating those expenditures this project would have crashed and burned months ago. But Dave's the right guy to get this promotion, even though we only brought him in from that middle-manager position at Nabisco three weeks ago, and I'll tell you why. Frankly Bob, you just don't have Dave's passion."
  • Re:Crazy Ideas (Score:2, Interesting)

    by Chode2235 (866375) on Tuesday July 11, 2006 @01:43PM (#15699482)
    It really doesn't matter what the 'new rules of business are' as there is not a significant shift what really makes the world go round. We can talk all high and mighty about technology, and it is pretty good and cool; but the fact of the matter is that we are still dependent upon natural resource aquisition and control. Granted technology allows us to exploit economies of scale and use resources more efficiently, but we are still slaves to land and natural resources much like our ancestors of the industrial age, or even the agerarian age. Not to troll, but if you want proof take a critical eye to post-WWII US foreign policy.
  • by Austerity Empowers (669817) on Tuesday July 11, 2006 @01:59PM (#15699615)
    If I didn't care about money I'd be doing exactly what I'm doing now. But since i do, I actively spend my time trying to do something else that pays better. Yes, it's nice to enjoy what you do, but do you get out of bed in the morning to an alarm clock to have fun, or because you need to pay the bills? If I didn't care about money i'd do exactly what I'm doing now, but I'd do it when I wanted, how I wanted.

    It's impossible to blend "fun" and "work" in any consistent/logical decision that necessarily produces happy. I find happy at work equates to any of: a) You are so obsessively driven on a subject that you can tune out status/personal needs for gratification of your other desires, b) You want money/status so badly that you'll do anything you're asked to achieve it, c) You are not driven, but have learned to make the best of what you've got.

    Unhappy people have either pursued the inappropriate path above and/or have failed at it.
  • by TopShelf (92521) on Tuesday July 11, 2006 @02:14PM (#15699750) Homepage Journal
    I think the great majority fall under option C - work is what pays the bills, paving the way for the higher priorities in life, like family, hobbies, etc. There's a lotta days I really don't enjoy my job, but it provides an opportunity for us to have a nice home, and allows my wife to stay at home with our 3 kids. For me to pursue a "dream job" like sports writing or academia, we'd take major hits in other areas that just aren't worth it.

    As regards these management philosophies, this translates to selecting employees for whom their career is the end-all-be-all. As a manager, that makes a lot of sense, as long as the people are somewhat balanced and won't burn out too soon.
  • by Anonymous Coward on Tuesday July 11, 2006 @02:52PM (#15700102)
    I'm not picking on you for your opening sentence, but have never liked the sentiment that the CEO "grew the business by $X over Y years," and this seems as good an opportunity as any to ask if anybody can set me straight. Maybe I'm just a complete idiot for not knowing this already, but is there any objective way to measure how much the actions of one guy at the top really "grew the business by $400 billion during his tenure from 1981-2001?"

    By an amazing coincidence, these dates correspond to a huge expansion in the US economy that went far beyond GE - do we give Jack credit for all that growth, too, or do we just say that he was in the right place at the right time? It seems to me that these guys are compensated (and lauded) for results that are largely out of their direct control.
  • by Anonymous Coward on Tuesday July 11, 2006 @03:35PM (#15700460)
    As a person who has been weeded out many times over, I used to think I was a failure every time I got the pink slip. But I later realized it wasn't usually my fault. Sometimes it was bad management with unrealistic expectations, another time it was simply being a mismatch for the job. Hey, the B's and C's are not failures. I finally ended up at a good company where I am considered an A player, and the passion came back. Rank and yank may be good in theory only but there are more variables within the company to consider. Not all of us are deadwood do-nothings.
  • Re:Yawn... (Score:3, Interesting)

    by drinkypoo (153816) <martin.espinoza@gmail.com> on Tuesday July 11, 2006 @04:13PM (#15700847) Homepage Journal
    Six sigma," mentioned in the article, is a fine example of this. How many suits really understand what a "sigma" is in this (or any) context, or why six of them is an interesting quantity?
    What? Six Sigma is the name of a specific approach to management of a company. It's copyrighted (owned by Motorola) and "Black Belts," "Green Belts," "Champions," etc. are the titles of specific roles within the program. It's not a generic (which is a mistake in TFA, they should have capitalized it) term, it's a proper term.

    You clearly either did not read the comment to which you replied, or did not understand it.

    First, he's complaining about the name Six Sigma, and why it's stupid. He didn't claim Fortune invented it. He did say it's stupid, and why it's stupid. I happen to agree, but that's not really pertinent - the point is, your rant is ill informed (what I think you meant to say - an ill advised rant is one you shouldn't be making because it will have negative repercussions.)

    As for using the names of martial arts belts for types of people (or whatever) in the six sigma methodology, he's complaining about this because it, too, is stupid. There's no such thing as a black belt manager unless we're talking about a dojo with a hierarchical management structure.

    Means very little to you, you mean. To people who focus on strategy rather than tactics, there is a lot of meaningful dialogue in the article. Whether or not you get anything out of it is a different story.

    There is not a lot of meaningful dialogue in the article. Most of it is just being smug and self-assured for the sake of smugness and self-assurance. "Look how smart we are, we're rewriting the rules of business." In fact, from that standpoint, it looks a lot like a Cringely or Dvorak article. There's a small amount of meaningful dialogue in the article, which you could probably fit in a bee's butt and have room left over for what I know about molecular biology.

  • by Chagatai (524580) on Tuesday July 11, 2006 @04:47PM (#15701164) Homepage
    While weeding out your worst is always a best practice, the way Jack Welsh did it was moronic. Through his "differentiation" he would always slash the bottom 10% of his workers. Here's the catch: what if that 10% was better than the people who will replace them? What if they performed well?

    Suppose your workers' performance is in the 90th, 85th, and 80th percentiles for performance. In grade school, that would be a solid B-average workforce. Now the bottom gets slashed, knocking out all of the 80th percentile people. Who replaces them? If the workers' performance followed a Bell curve, the next percentage should be at 50%. Congratulations, you have just shot yourself in the foot.

    Jack Welsh was another hardass CEO interested in his own self-interest and full of ego. That's the fact.

  • by nine-times (778537) <nine.times@gmail.com> on Tuesday July 11, 2006 @05:40PM (#15701583) Homepage
    If your mission in life is best accomplished at the office, then how can spending your time there be a waste? If you are genuinely afraid that, when you are old, you will regret the time you spent at work, then maybe you chose your career poorly.

    That's a little oversimplistic for me. Some passions can't easily be turned into a paying career. Some passions can be a paying career, but there may be other problems with that career. It simply isn't always as simple as "doing what you're passionate about."

    Besides that, many times you could choose a career in what you're passionate about, and still hate your job. Let's say I love fixing computers. Does it naturally follow that I'd love any job in the IT sector? No-- it's still rather important to find a job that you're good at, where people appreciate you, and you're treated well by your bosses/coworkers.

    Forgetting all that, there's also the fact that, if you really only have one passion, and are happy to spend all your days working only on that one thing, then you're probably some sort of a lunatic.

    It's really easy to claim people are stupid for failing to get a career that they're passionate about, but I think people here are talking about something that you haven't been able to grasp: regardless of the concept of 'work' as "what you get paid for", there is still 'work' as in 'doing something I don't really want to do because it's my responsibility'. We all need play time-- time when the pressure is off. We all need time with friends and family, time to rest, time to think, time to get our life straightened out. Hell, even if the problem is that we haven't "followed our passions," we need time to choose a new carreer, retrain, look for jobs, etc.

    Now, I'm not saying that employees who like their work are generally more productive than those who hate their work. However, if your suggesting that spending all day working, every single day, and then regretting it later could only be caused by failing to have the correct job-- well, I'm not even sure how to talk to someone who is so far off-base.

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