Winning - Jack Welch [120]
That market you’re serving may seem saturated, but it is filled with plenty of demand for exciting new products, services, or technologies. That’s what Procter & Gamble discovered recently. There was no company more set in its ways than P&G. But in less than five years, the company instilled a whole new vigor into its innovation efforts. It broke its NIH syndrome and scoured every corner of the world for “garage” inventors with cutting-edge ideas. And they didn’t stop there. Their search for new ideas led them to create networks into other companies, suppliers, universities, research labs, and venture capitalists. They took some of the ideas they found and fine-tuned them, and used still others to reinvent their existing products. For instance, P&G took the tried-and-true electrostatic technology used to paint cars and applied it to its cosmetics business—transforming the way its makeup products go on the skin. With a new can-do attitude, the company also revitalized in-house R & D. The result was products like Crest Whitestrips and the Swiffer cleaning products, which literally invented whole new mass-market categories.*
And finally, while you are innovating and searching for new products, markets, and niches, come to terms with the fact that China can be much more than just a competitor.
Think of China as a market, an outsourcing option, and a potential partner.
Unlike Japan in its early development, China’s huge market is relatively open to direct investment. Many can go it alone there, ideally selling their product in the Chinese market while sourcing product for their home market.
Alternatively, you can join forces with a local business. Needless to say, Chinese joint ventures aren’t easy. In my experience, to make them happen you have to make sure the Chinese partner feels as if it has gained a lot, perhaps more than you. But there are ways to craft win-win deals. When GE Medical formed a joint venture in 1991, its Chinese partner brought great local market know-how. That was a big factor in the new company’s achieving the No. 1 market share in imported GE high-end imaging products. At the same time, the joint venture’s Chinese engineers designed and built low-cost, high-quality products that were exported through GE’s global distribution network.
Now, I don’t want to sound like a Pollyanna about China. Its presence is a real game-changer in business today. And even if trade restrictions get enacted, its currency is allowed to fluctuate, and intellectual property laws are passed, no political solution in the world is going to make it go away.
But China is a classic case of the glass half empty or half full, isn’t it?
You can look at the situation and feel victimized. Or you can look at it and be excited about conquering the challenges and opportunities it presents.
Pick the latter. You can’t win wringing your hands.
This question was posed by an audience member in London, at a conference attended by about three thousand middle and senior managers:
Norway just passed a law mandating that half of every corporate board be comprised of women. What is your opinion of that?
It’s ridiculous.
Obviously, I’m not against women directors. They’ve made major contributions to thousands of boards around the world. In fact, one of the best directors I’ve ever known is a woman who served on the GE board, G.G. Michelson, the former director of human resources at R.H. Macy & Co. and past head of Columbia University’s board of trustees, whose people insights and general wisdom guided me for two decades.
Nevertheless, I just don’t like quotas in the boardroom or in the office. Winning companies are meritocracies. They practice differentiation, making a clear distinction between top, middle, and bottom performers. This system is candid and fair, and it’s the most effective way for an organization to field the best team.
Quotas undermine meritocracies. They artificially push some people ahead, independent of qualifications.