Winning by Jack Welch

Author:Jack Welch
Language: eng
Format: epub, pdf
Publisher: HarperCollins

* * *

The people in the field are operating with one simple goal, albeit unstated: to minimize their risk and maximize their bonus.

* * *

Why? Because in most companies, people are rewarded for hitting budget. Missing your budget gets you a stick in the eye or worse. So of course people want to keep their budget numbers as low as possible. No wonder their budgets are filled with layer after layer of conservatism.

Meanwhile, back at headquarters, senior managers are also preparing for the Big Budget Meeting. Their agenda, however, is the exact opposite of the field. They’re rewarded for increased earnings, and so what they want from the budget review at every business is significant growth in sales and profits.

Now fast-forward to the Big Budget Meeting itself.

The two sides meet in a windowless room with a whole day set aside for what everyone knows will be an unpleasant wrestling match.

The field makes its presentation with a fat deck of PowerPoint slides, and the story is invariably dire. Despite reports of a pretty good economy, there are reasons to believe this particular business environment is going to be very difficult. “The competition has just brought a new plant online, and with its excess supply, there will be enormous pricing pressure,” they might say. Later in the meeting, you get: “Raw material costs and inflation pressures are severe. In order to meet these challenges, we need new cost-reduction programs that require $10 million in additional resources.”

The final pronouncement from the business managers usually goes something like this: “To be optimistic—very optimistic—earnings will likely grow only 6 percent.”

Headquarters, needless to say, has its own view of the situation, and it is decidedly not dire. The economy is strong. GDP is estimated to rise steadily all year. Orders are up everywhere else in the company. The main competition has a big asbestos lawsuit against it that will distract management. The business can get the cost reductions with $5 million in new programs, and earnings should grow 12 percent.

You know what goes on during this marathon—the grumbling and groaning, the probing and data quoting, the back and forth and back and forth again. On occasion, it can get contentious, especially if a senior person has worked within the business earlier in his career. He’ll throw out anecdotes about how they used to do it in the old days and accuse the field of lowballing. “I know where you’re hiding it. I used to park reserves in there too,” he might insist. “Now give it up.”

The grappling concludes—finally and inevitably—when the sides split the difference. The field gets $7.5 million in resources and a budget with a commitment for 9 percent earnings growth.

Before the field packs up to leave, everyone somberly shakes hands. The mood is resigned. For all involved, the unspoken vibe in the room is: we didn’t get what we wanted or what was right.

That pall lasts right up until the moment the field team pulls out of the driveway. Then the high-fiving begins.

“Those

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.