Control Your Destiny or Someone Else Will

NOEL M. TICHY AND STRATFORD SHERMAN

Reviewed by Todd

In 1994, I accepted a position with General Electric in their Manufacturing Management Program, one of several training programs used to groom college graduates. It was sometime in that first year that I received my first copy of Control Your Destiny or Someone Else Will. The book had been published the year prior and was being warmly received within the company. Noel Tichy was instrumental in redeveloping the leadership training programs at GE, and the book, written with Strat Sherman, opened the doors to show the evolution of the conglomerate under CEO Jack Welch.

Control Your Destiny came out before the accolades, before Jack Welch was named “Manager of the Century” by Fortune magazine, before the company’s market capitalization reached $450 billion. Professors and pundits now can easily look back and call Welch’s twenty-year turnaround remarkable, but Tichy and Sherman were the first to recognize and write about it. Though GE fell short of the financial metrics needed for recognition in Jim Collins’s seminal work Good to Great, read Control Your Destiny or Someone Else Will to see how Jack Welch took an organization from good to great.

The situation Jack Welch inherited when he became CEO in 1981 was one of the toughest for any leader: life at GE was good, but he believed it could be better. Not exactly a situation that encourages a change-oriented agenda, and the new leader had 420,000 employees to convince that a new course was needed. To spur change, in 1982 Welch made his now-famous declaration that every GE business would be number one or number two in their markets and vowed to “‘fix, close, or sell’” any business that did not meet those standards.” The incumbent managerial class yawned; “same story, different leader” was their reaction.

Over the next ten years, Welch made good on his declaration. He sold 125 businesses in the first four years alone, including many consumer-based brands central to the company’s long-standing identity. In that first decade, 300,000 people left GE through the sale of laggard divisions or company-encouraged means. “I think one of the jobs of a businessperson is to get away from the slugfests and into niches where you can prevail,” Welch said, and by 1993, every part of GE held one of the top two rungs in each of their markets. Welch referred to this time as “getting the hardware right,” building the business engine that has allowed GE to succeed as a conglomerate.

Welch knew there was a limit to gaining through reduction, and in the second half of his tenure, the focus shifted to “the software.” Welch pumped money into the revitalization of Crotonville, the company’s New York–based facility that would train 10,000 employees yearly and “indoctrinate managers in the new principles.” He quickly realized those direct efforts would only reach a fraction of the workforce and that something more than the typical videotaped messages and company newsletters were needed. The new values needed to be experienced at GE’s manufacturing plants and office buildings around the world.

“Peter Drucker . . . greatly influenced [Jack] Welch by writing, ‘If you weren’t already in the business, would you enter it today?’”

This insight served as the seed for Work-Out, town hall–style meetings where thirty to one hundred employees, over the course of a few days, would discuss “their common problems.” Bosses were not allowed to attend until the final hours when they were forced to make on-the-spot, yes-or-no decisions on the groups’ compiled action items. In a five-year period, more than 200,000 GE employees, or 85 percent of the company’s workforce, experienced a Work-Out session. This cultural breakthrough empowered employees to take the steps required to eliminate unnecessary work, and built trust across pay grades and business functions, an effort Harvard Business School professor Len Schlesinger called “one of the biggest planned efforts to alter people’s behavior since Mao’s Cultural Revolution.”

The current version of Control Your Destiny is quite daunting at 694 pages, but do not let the heft scare you away. The first half is a narrative about Welch and the company he started with, while the second half details the challenges and associated initiatives Welch took on, ranging from globalization to speed. In 2001, as Welch was leaving his post, a revised edition included over 160 new pages of his letters from twenty years of annual reports. A second revision was published in 2005 that again revised material and added a new opening note from Sherman and an afterword from Tichy. The last bit of heft comes in the form of a seventy-page “Handbook for Revolutionaries,” written by Tichy, that delivers a challenge to leaders to assess their organizations against the radical change GE went through.

I count myself lucky to have been employed by GE, and I will personally vouch for the impact, the absolute culture change, engendered by Jack Welch’s actions at General Electric. I never met Welch, but the knowledge and experience that I gained in my six years at the company will likely never be matched. While GE may build aircraft engines and issue credit cards, its true core product is creating world-class managers. All of GE’s CEOs have come from within the organization, and Boeing, Chrysler, and Intuit are just a few of the companies now run by former GE executives. Tichy and Sherman’s portrait of Jack Welch gives leaders everywhere a strong example of leadership at its best. TS

Control Your Destiny or Someone Else Will, Collins Business Essentials Edition, Paperback 2005, ISBN 9780060753832

WHERE TO NEXT? Here for another take on changing knowing to doing Here for another great corporate turnaround Here to see which companies Jim Collins did recognize | EVEN MORE: The Cycle of Leadership by Noel M. Tichy; Winning by Jack and Suzy Welch; If Harry Potter Ran General Electric by Tom Morris