Winning - Jack Welch [49]
So Bill asked him to leave. It took tremendous courage given the circumstances. But Bill knew, and he was right, that the transformation of JPMorgan Chase could not move forward with such a resister—and his following—in the way. Candor and fairness made the departure go well. And Bill’s program went on to succeed too. In a survey of all bank executives taken two years after his leadership program started, those who participated in the initiative had a favorable impression of the bank’s direction twenty points higher than those who had not participated.
From a management perspective, few cases of removing resisters are as difficult as the one Bill Harrison faced. But even when a situation is not nearly as political or fraught, I have seen managers hold on to resisters because of a specific skill set or because they’ve been around for a long time.
Don’t!
Resisters only get more diehard and their followings more entrenched as time goes on. They are change killers; cut them off early.
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4. Look at car wrecks.
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Most companies capitalize on obvious opportunities. When a competitor fails, they move in on their customers. When a new technology emerges, they invest in it and create product line extensions.
But to be a real change organization, you also have to have the guts to look at bolder, scarier, more unpredictable events, and assess and make the most of the opportunities they present. This capability takes a certain determination and sometimes a strong stomach, but the rewards can be huge.
Take the 1997 Asian financial crisis. Currency traders certainly capitalized on this awful event; they live on exploiting change. But they’re not the only ones who should do this. GE had real success buying undervalued Thai auto loans in this period. Others prospered by buying real estate at fire sale prices.*
The Japanese banking woes of the ’90s gave numerous companies a chance to pick up assets at attractive prices and participate in a market that had previously been closed to them. Companies like the buyout firm Ripplewood Holdings, AIG, Citigroup, and GE, to name a few, made huge gambles in a horrible-looking environment that had just about every pundit predicting the permanent demise of Japan. Those bets are turning out to be big winners as Japan recovers.
Bankruptcies are another calamity that provide all kinds of opportunities. They’re tragic to the employees. Jobs are lost, and pensions disappear into thin air. But jobs and futures can also be created from the cinders. When Enron fell apart—a tragic business story if there ever was one—Warren Buffett was able to take a position in its former pipeline business at a bargain-basement price. And GE picked up its wind power business at what it considered a very good price. The Vivendi collapse was a disaster for CEO Jean-Marie Messier, many employees, and company shareholders. But its financial needs provided the opportunity for Edgar Bronfman to reenter the music business at an attractive price and for GE to purchase terrific media assets.
It goes without saying that no businessperson wants disasters to occur, but they will. There will be spikes in oil prices, buildings will be destroyed in earthquakes, companies will go bankrupt, and countries will come close. In today’s world, there is the persistent threat of a terrorist attack. Yet even if terrorism is eventually contained—unfortunately, something that is not imminent—there will always be elections and revolutions that change the course of history.
Most companies take advantage of obvious opportunities. But some also have the ability to make the most