The ‘Jack Welch Formula’
September 12, 2011 at 7:41 AM
Executive Coaches, Plus Partnership first started working with this client when he was Finance Director and before the CEO had resigned. It was clear from that time together that he and the CEO had an extremely close relationship and worked extremely well together. When the previous CEO left he was probably the obvious internal candidate to be promoted and was also keen to get the job. In fact he had told me that it was ambition to be a CEO and that he saw it as a natural evolution in his career.
However, our formal relationship ended, and although we kept in touch informally and I had suggested to him that he renews the formal coaching relationship to help him adjust to the new role, there was an element in him (I am sure) that made him think that he’d achieved his goal and therefore didn’t need any further coaching support.
It was clear when we met up again that things were not going as well as expected. He had failed to make the transition and was clearly still operating as Finance Director, and this was causing problems for the person he had brought in to replace him, and indeed for him, as he didn’t like the changes that the new FD was trying to make.
We analysed what had made his predecessor so successful. There were several elements, but among them was the fact that my client and his CEO had had a relationship built on trust and the CEO had allowed him to do his job, while the CEO focused on his.
The previous CEO had joined the company when it was relatively small, and had been responsible for Sales and Partnerships. He had been instrumental in the growth of the company over nearly 15 years. Therefore he knew all the company’s clients and partners well and, while CEO, had continued to focus on these. My client however had no such experience and realised it was well outside his comfort zone and so continued to focus on the area in which he felt strongest. It was fundamentally important that we got him to focus on what could be termed the ‘Jack Welch formula’. Jack Welch, in his book ‘Winning’ suggests that a CEO needs to focus on three things only and they all start with the letter R. If you can get these three right, the fourth, and probably most important, which also starts with an R – Revenue – will automatically follow.
The three things considered most important are:
Relationships with clients;
Relationships with suppliers;
Relationships with staff.
It’s not a bad formula for CEOs to focus on. Time will tell whether my client makes the adjustment, but all of the other areas of a business can be dealt with by the functional teams. Making this transition is probably the hardest task for anybody making the giant leap to CEO. It means measuring yourself against different parameters, leaving behind the functional area that you have already been successful in and being out of the office far more than ever before. Those relationships are fundamentally important to any business so my message to him has been to focus on them exclusively, and get out of the way of his team. If he does that successfully the Revenue will follow. Oh yes, my other advice was to get a coach again to help him; it is lonely at the top.