Winning: The Answers: Confronting 74 of the Toughest Questions in Business Today

by Jack Welch

  There is a second, less easy answer to your question, and we say less easy because every time we mention it in speeches, it provokes a real gasp of discomfort from the audience. That answer is “biology.” There are very few women CEOs and a disproportionately small number of women senior executives because women have babies. And despite what some earnest but misguided social pundits might tell you, that matters. Because when professional women decide to have children, they often decide to cut back their hours at work or travel less. Some women change jobs entirely, to staff positions with more flexibility but much lower visibility. Still more women actually leave the workforce entirely. In fact, a 2002 survey conducted by Harvard Business School of its alumnae from the classes of 1981, 1986, and 1991 showed that 62 percent had left the professional world. That’s right—out of all the women who graduated in those classes, many of them immediately going on to jobs in consulting, finance, and line management, only 38 percent were still working full-time some ten, fifteen, and twenty years out. (The research showed that some of the women who described themselves as “at home,” were actually working part-time or doing work on a freelance basis.)

  The career choices women make when they have children are completely personal and absolutely OK—of course they are!—but they have ramifications. Most notably, these choices tend to slow down career advancement.

  Is that bad? We don’t think so. It’s life. Every choice has a consequence. As a working mother, if you decide to take time off, work fewer hours, or travel less, you gain something of immeasurable value: more time with your children. You also give up something: a spot on the fast track. In business—where bosses are paid to win, with shareholders cheering them on—those spots usually go to the people with the most availability and commitment.

  But, you may be asking, what about talent? Doesn’t talent matter? Fortunately, the answer is yes, and talent is often the saving grace for women who want to have families and career advancement at the same time. Because if you’re a working mother who is really good at your job and you really deliver results, most bosses will give you the flexibility you want and need for your children’s sake. But you have to earn that flexibility first—with performance. That takes time, in fact, it could take years, which is too long for many mothers to endure.

  And so they drop out, shrinking the pool of promotable women, which is yet another reason why women advance more slowly than men.

  Perhaps someday, the nature of work will change in a way that makes it possible for men and women to populate the corporate senior ranks in more equal numbers. Companies can’t ever stop trying to make that happen by supporting women with training and opportunities and making sure any gender biases are wiped from the system. Many good companies today have already made enormous strides in creating work environments where women can forge creative part-time working solutions to hold on to their careers while their children are young.

  But as long as professional advancement is based to a considerable degree on availability and commitment, and as long as mothers want to spend time with their children, women’s careers will always have a different, more circuitous path than men’s careers. And believe it or not, lots of working mothers wouldn’t have it any other way.

  PAYING BIG-TIME FOR FAILURE

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  What do you think about the obscene severance packages being handed out to CEOs who have basically failed on the job? As a (small) stockholder and a middle manager who busts his butt for five figures, it drives me crazy.

  —MIAMI, FLORIDA

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  You’re not alone, but just make sure you aim your anger in the right direction—and that might not be at the CEOs getting the huge payouts. All they did was say, “Yes, thank you,” when offered a big package. Greedy? Maybe. But more often, they are simply the beneficiaries of a common and disturbing dynamic that starts in the boardroom.

  Which brings us to the real culprits here: company directors. They’re behind many severance pay debacles for one main reason. They messed up succession planning.

  Yes, succession planning. It has a lot to do with severance pay. Why? Because many of the “obscene” payout deals that bother you so much weren’t created when the errant CEO was fired. They were designed long before, when the new CEO was hired from the outside because the board failed, over the course of several years, to develop a pool of internal talent.

  Now, internally promoted CEOs don’t come cheap. The typical insider tapped for the top job will get a substantial pay increase, hefty rewards tied to performance, a slew of new perks, and a bigger office. But the deal gets much richer when a white knight has to be enticed to gallop in to save the company from itself. The rescuer gets everything an insider gets—plus the guarantee of a big consolation prize even if he or she blows it. And indeed, that last part is usually why the deal gets sealed; without back-end protection, no outsider would touch most of these risky positions.

  Not all severance messes are related to outsider CEOs, of course. Sometimes insider CEOs fail and get sent on their way with more money than they appear to deserve. That can be galling too, but the dynamic we’re talking about is different. It starts when a board needs a new CEO and looking inward, realizes, oops, we forgot to plan for that. They then contact a headhunter, whose lust for a successful placement is second only to the board’s level of panic. The dynamic is complete when a seemingly perfect candidate is located—usually in a wonderful, secure job that he or she has no intention of leaving. Unless, of course, the deal is right.

  Case in point is what happened at Hewlett-Packard. Back in 1999, when the board decided to change out its CEO, the lack of internal candidates launched headhunters on a national search. Soon enough, they found Carly Fiorina successfully toiling away at Lucent Technologies. She was hired amid great fanfare, pried away from her comfortable position with, needless to say, an offer she couldn’t refuse.

  But as everyone knows, Carly’s six-year tenure at HP was fraught with board dissension, so much so that you would think when she was fired, her farewell gift would be modest. At about $40 million, it wasn’t, sparking widespread hue and cry, much of it aimed at Carly. But what about HP’s board? Without doubt, they negotiated the severance payout—and they did so as Carly was walking in the door with trumpets blaring, not as it was slamming behind her with a clunk.

  The HP case is hardly unique, although sometimes the ending is happier. Take Ed Breen and Tyco. In 2002, Tyco was hit by a disastrous accounting scandal, and its CEO was removed. Again, the board turned to headhunters, who quickly set their sights on Ed, a respected executive at Motorola.

  But Ed wasn’t going to quit a thriving career at an unsullied company to clean up the chaos at Tyco for a standard-issue deal. No wonder the board felt obligated to back up a Brink’s truck (metaphorically, of course) to unload a new compensation package at his doorstep. That package had a big performance component to it, but you can be sure that to make the risk of running Tyco worth Ed’s while, it also contained plenty of protection in the event things didn’t work out. Fortunately, Ed is doing a good job at Tyco, so the terms of his severance package are a moot point.

  So, to get back to your question of what we think of obscene severance packages—look, we think they’re terrible. But they’re not solely the fault of the CEOs carrying them to the bank. In many cases, they were recruited to risky job situations on terms set by the hiring party.

  But too bad they had to be bought in the first place. Too bad boards didn’t spend enough energy developing internal candidates. They really have only one job more important than that; coaching and supporting the current CEO.

  Unfortunately, this problem will probably only get worse going forward. The reason: the Sarbanes-Oxley Act has driven many boards into a state of frenzied micromanagement of activities outside their purview. Today, many boards are more concerned with accounting minutiae than people development, including succession planning. What a shame. Boards can’t do the work of managemen
t. They can only make sure the right management is in place, now and in the future.

  So, we’re with you on this one. We can’t blame you for wanting to scream. The big severance packages awarded to failed CEOs make you question the whole capitalistic system. But should you ever decide to really let it rip, just make sure that if the CEO was an outside recruit, you aim your invective where it belongs—not at the easy target, but the right one.

  CAREERS

  On Life, Liberty, and the Pursuit of a Promotion

  Without doubt, the majority of the questions we receive, both by e-mail and in person, are about career management, or put less euphemistically, getting ahead. Some questions concern straightforward blocking-and-tackling issues, such as whether an MBA really matters and how to make an impact in a job interview. But others are more nuanced than that, involving complex life choices and sensitive situations with colleagues and bosses. Regardless, almost all career questions share one characteristic: emotional intensity. The drive to succeed is both deeply powerful and entirely personal. People want to move forward in life and in work—and as we say in the following group of answers—with the right mind-set, there’s always a way.

  WHAT SHOULD I DO WITH THE REST OF MY LIFE?

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  I am a student with what may seem like a very big question. How can you figure out what to do with your life? I have read many books and taken part in countless activities to help me decide, but still, I cannot take even the first step of my career journey. Can you help?

  —MEDAN, INDONESIA

  * * *

  We can mainly help by telling you that you are not alone.

  Many young people feel overwhelmed at the beginning of their careers. They see all their friends and classmates getting great fast-track jobs with big salaries—or at least it seems that way. They hear their parents telling them to work here or there, or get some graduate degree or other. And like you, they read books and take part in programs designed to help them with the “What should I do with my life?” question—but the abundance of answers only confuses matters more.

  It’s enough to make you panic, which sort of sounds like your state of affairs. And that’s OK; it’s natural. But it won’t really help you move forward.

  For that, you have to come to terms with the fact that most careers are not launched by a grand decision about where you want to end up and a clever game plan on how to get you there. No, most careers are iterative. They start with one somewhat appealing job—that is, a job that feels like it might be a pretty good match for your skills, interests, and goals. That job typically ends up being not exactly right, so it leads to a job that has a somewhat better fit, which leads to yet another job with an even better fit. And so on and on, until one day—often years from the starting line—you find yourself in the job you have actually been waiting for all your life, the one that gives you meaning and purpose. The one you wished you had known about back when you started but couldn’t—simply because you hadn’t started working yet.

  But you know what? Even that “perfect” job will not be without its trials and tribulations. You may be at it for six months and then get a lousy new boss. Or your company may be acquired and your job may change or go away entirely. And your journey will need to start again.

  Our point is, careers are long and unpredictable. They are rarely linear. They zig and zag, stop and start, and take many unexpected twists and turns. Hard work and talent matter, and luck will play a role too.

  The key for you at this point is just to start. Learn about growing companies, emerging market trends, influential people, and new cultural phenomena. Talk with people in different professions and with varied life stories. Go on interviews. Ask questions. Mull it all over, with both your head and your heart. And incidentally, the latter will probably tell you at least as much as the former.

  Then act—take a job. Remember, it doesn’t have to be the job. It just needs to be a job that feels good enough to get you going.

  The job that calls you—the career you were meant for—will come. And it will be part of a life journey that you will follow, like most people, one step at a time.

  PICKING THE RIGHT PATH

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  I am seventeen years old and preparing for university. I am thinking of taking Portuguese, but in your opinion, what language should I learn to succeed in the world of business? And what fields of study hold the most potential?

  —TÁBOR, CZECH REPUBLIC

  * * *

  You’re onto something with Portuguese, since it will give you a leg up in several markets with good potential, such as Brazil and some emerging African nations. But for our money, Chinese is the language to learn. In the span of your career, China could become the second largest economy in the world. Any European who can do business there with the speed and intimacy that fluency affords will be way ahead of the game.

  As for what to study, if you want to be where the action is now and for the next several decades, learn everything you can about the confluence of three fields: biotechnology, information technology, and nanotechnology. For the foreseeable future, the therapies, machines, devices, and other products and services that these fields bring to market will revolutionize society—and business.

  That said, when it comes to picking an educational field and ultimately a career, absolutely nothing beats pursuing the path that truly fascinates your brain, engages your energy, and touches your soul. Whatever you do, do what turns your crank. Otherwise your job will always just be work, and how dreary is that?

  I AM WHO I AM

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  I have achieved a lot as a leader and still want to grow and move on to more challenging positions, but I fail to make an impact at interviews. I always think I am right for the job, but the right answers don’t come to me until the interview is over. Your advice?

  —JOHANNESBURG, SOUTH AFRICA

  * * *

  Your question reminds us of the time one of us was part of a hiring process where a highly qualified young job candidate strutted into the room and started his interview with the words, “So, let me get this straight. Do you ask me questions in this event, or do I ask you?” His bravado, needless to say, did not exactly win over any hearts.

  You don’t have a bravado problem—quite the opposite. But it sounds as if you’re not winning over any hearts, either. We would guess that’s because you’re too tied up trying to win over brains with perfectly crafted answers.

  That’s off track. Your résumé should speak for your credentials. Of course, you can use the interview to elaborate or fill in any blanks on your expertise. But based on your question, it seems more important that you show your potential boss who you really are. That is, a leader who cares about his work and his team passionately. A colleague who can laugh, listen, and worry. A real person with outside interests and friends, maturity and self-awareness, and the ability to connect emotionally.

  Indeed, in any interview, your best selling point can be your authenticity. So, stop performing, and be yourself. The positive impact you long for is probably right inside you, if only you’ll let it out.

  DOES AN MBA REALLY MATTER?

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  Over the years, I have noticed that people with an MBA, irrespective of the providing institute and with less experience and less salubrious CVs than myself, land bigger jobs, especially in the top-level executive and leadership positions. This puzzles me. What is it in an MBA that qualifies a graduate to be an automatic winner?

  —DURBAN, SOUTH AFRICA

  * * *

  There is no question that an MBA puts a stamp of approval on your forehead. People like credentials, and although some MBAs have more prestige than others, any MBA separates its owner from the pack. A puzzling phenomenon to you, maybe, but nothing new.

  But you have to understand something—the impact of an MBA is really good for only a year or so. It helps a graduate get a higher starting salary or land a better job out of the gate, or both. And it creat
es something of a halo effect. MBAs are presumed to be intelligent and capable; their bosses watch them hopefully and, in many cases, give them extra opportunities to contribute and grow.

  In short order, however, an MBA’s performance kicks in, and in the vast majority of organizations, that is all that comes to matter. The MBA excels or sinks—and the advanced degree becomes forgotten either way. In business, your only real credential, ultimately, is your results.

  So, when you see those MBAs around you who appear to be “automatic winners,” look beyond their diplomas. We would bet that they are doing a lot more than carrying around a piece of paper. Most likely, they are overdelivering on performance and buying into the values of the company, demonstrating them with their everyday behaviors. On top of that, they are very probably exuding a positive, can-do attitude, taking on tough challenges with a healthy mixture of optimism and realism. Finally, they are almost certainly making the people around them look good too, by sharing credit and building the team. In other words, we would bet they’re moving the company forward in some meaningful way. They’re making a difference.