Tuesday, 2 March 2010

It’s not about the numbers

I must be the last business person alive to read Jack Welch and the GE Way by Robert Slater. Not something I’m proud of, but at least I’m getting around to it now. It’s a better book than I expected.

A theme that comes up over and over again is Jack Welch’s insistence that business is not about the numbers. “Don’t focus on the numbers”, he is supposed to have said. “Numbers aren’t the vision; numbers are the product. I never talk about numbers.”

Yet it is equally clear that Jack Welch cared deeply about the numbers: cost control, market share and profitability. So what’s it all about?

Of course Welch was right – the financial numbers are the result of everything else you do. If you get the rest of business right – the right people, the right products being sold into the right markets, and the right focus on quality, the financial results will also be right. And GE’s numbers were right.

According to Slater, Welch focused on getting the right people into top positions, and on sharing good ideas between different businesses – both internally and externally. He was also a big fan of Six Sigma – the quality system with a big emphasis on measurement.

So Welch used numbers to inform him of what was going well and what needed attention. He focused on making sure things happened when and where they were needed.

Oddly enough, it’s just what the rest of us need; even though we are not running GE. Because no matter how loud we yell, or how hard we try, getting the numbers to improve without carrying out all the necessary stuff that goes before, isn’t going to cut it. We should put our focus on the things that build better products and services for customers, and the things that get them to market faster. Then the numbers will take care of themselves.

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