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Technology Rewriting the Rules of Business
theStorminMormon writes "Fortune magazine is running a story describing the overthrow of Jack Welch's old rules of business. (Welch responds here.) Although the article lists Google and Apple as two paragons of the new rules of business, it fails to note that the old rules of business originated from straight manufacturing firms while the new rules of business are coming from the (more service-oriented) tech sector." From the article: "Steve Jobs has emphasized that Apple hires only people who are passionate about what they do (something that, to be fair, Welch also talked about). At Genentech, CEO Art Levinson says he actually screens out job applicants who ask too many questions about titles and options, because he wants only people who are driven to make drugs that help patients fight cancer."
Apple hires only people who are passionate about what they do
But are they as passionate as this sales clerk who just wanted to sell a yo-you?
whoohoo! First post!
If you are passionate about what you do, you'll get out of bed in the morning and actually look forward to going to work. Passion also drives you to do your best, not to just get by so you can collect a paycheck.
If "disco" means "I learn" in Latin, does "discothèque" mean "I learn technology"?
I work to live not live to work. I will do my job to the fullest, but I want a life. I don't want to wake up when I'm old and find that I'm alone and regretting that I didn't live my life instead of wasting it in the office.
It's always the crazy ideas that change the world. Of course not every crazy idea is a good one, and there are thousands of business that have gone under for thinking a little too outside the box. If you look around, there's really only one Amazon, only one Google, only one Apple. Companies that operate in more traditional ways seem to last longer on average, but nowadays they're often not leading things.
-mrxak
Onions Will Kill You
I surely hope they have other methods of screening applicants, because I think that some people are easily able to fool interviewers and sound passionate.
They are are just waiting to get hired and once they are, they lay back and start making all kinds of demands.
Got MILF? It does a body good!
From his rebuttal:
> When has there ever been a divergence between shareholders and customers? No one is out saying, "Let's screw this customer today, and if we do, our share price might go up 20 cents." They're just not doing it.
25 years later, the secret of his success slips out: he has never owned a wireless phone.
"Although the article lists Google and Apple as two paragons of the new rules of business, it fails to note that the old rules of business originated from straight manufacturing firms while the new rules of business are coming from the (more service-oriented) tech sector."
Of course the "service sector" revolves around IP and the creation and maintainance of it.* The other kind of "service" is "would you like fries with that", but you can't build much of an economy on that.
*Billions and billions of dollars as compared to the "buggy whip" sector.
"Hire passionate people." Well, if that isn't touchy-feely management at its best.
Welch's rule was to grade your players and go with the A's. Some of us might call that a meritocracy. To the B or C graded employee, of course, it looks like an unbalanced, unfair gold-key system driven by self interest on the part of senior managers.
What's the alternative? "Hire passionate people."
Am I the only one who imagines the following conversation: "Look, Bob, I know you're working hard. Your code is better than everyone else's on the team, and that's great! You did a good job getting everybody working together on that one project, too, and you were right about cutting out those side jobs -- if we were still eating those expenditures this project would have crashed and burned months ago. But Dave's the right guy to get this promotion, even though we only brought him in from that middle-manager position at Nabisco three weeks ago, and I'll tell you why. Frankly Bob, you just don't have Dave's passion."
Breakfast served all day!
Another article for suits. Who gives a rat's ass about business other than suits? We're here for free source code and innovation that is unfettered by needing to cater to stockholders. Why are so many folks in IT obsessed with business? It makes no sense. I got into IT because of art. That's the way it should be. IT is all about being creative and original not business.
-"...bad old ideas look confusingly fresh when they are packaged as technology" - Jaron Lanier (Digital Maoism on Edge.o
just a few people want to play with words to make ideas their own. As he pointed out in his rebuttal a lot of the ideas that are being set out for today are compatible if not part of the ideas he espoused.
I do agree with one item, weed out your worst. It is true. You will come to find that that passionate ones will not be lost in this. I'm in a company which doesn't do this, its a good old boy club. As such we still make money but never really move forward. We have so much deadwood it stifles innovation. The only time things change is when someone dies or retires.
* Winners compare their achievements to their goals, losers compare theirs to that of others.
Whenever I hear the phrase "passionate about what you do" I get this eery feeling that they're going to offer up far more "passion" in their compensation package than "salary". Passion is all and well, and enjoying work is naturally important, but a large number of employers (especially in tech sectors) love to use the "passion" card as a way of underpaying their staff. If employees ever complain about meagre wages the employer can always counter with "But you LOVE this work! You should be glad to be doing this for a living!"
There's a fine line between passion and simple exploitation of that passion to get stuff done for cheap. And I don't trust most businessmen to look out for my best interests when cutting a deal.
I work to live not live to work. I will do my job to the fullest, but I want a life. I don't want to wake up when I'm old and find that I'm alone and regretting that I didn't live my life instead of wasting it in the office.
If your mission in life is best accomplished at the office, then how can spending your time there be a waste? If you are genuinely afraid that, when you are old, you will regret the time you spent at work, then maybe you chose your career poorly.
Many or even most people choose their career poorly. Sometimes this is avoidable. Sometimes it is not. Sometimes the best occupation is one that pays poorly or not at all. Too many don't even try. They just chase the money instead. But those who do manage to unify their passion with their career are more effective employees.
How dare someone be interested in their own benefits!?!?!
Living for work is a basic abuse of a person's life.
In the cosmic or geological scale of things, our lives
are a fly fart in a hurricane. We are but a flash in the
pan of live unless we distinguish ourselves like Hitler,
or more appropriately, Dr. Jonas Salk.
We turn around and we find we are OLD. I am way past my
median age and can look forward to only 20 statistical years of
life left. Time flies. Trust me.
Seize the day! Live while you can. Enjoy what you can. Unless
there is a mania for work, lighten up if your basic needs are
met.
So far, you only live once , until a second person returns
from the dead to substantiate the afterlife.
nm
"If you are passionate about what you do, you'll get out of bed in the morning and actually look forward to going to work."
That's not passion. Passion is working for free. Giving all your possessions away. And living off of handouts from complete (and sometimes ungrateful) strangers.
Some of you are confusing passion with obsession. A passionate employee loves his or her job and strives to do a good job - they don't necessarily devote their entire life to it. I know plenty of passionate people who have lives outside of the office. You can really love your job and try really hard without even taking it out of the office.
In my experience some of the people who are obsessed with their job (spending nights / weekends) actually hate it.
Does anyone else see a creepy Apple vs. Microsoft comparison here? I know a couple of managers at Microsoft, and the "old" rules sound exactly like what they do.
Haiku for you!
Well they can say what they want but, in my experience, the corporate sector thrives on mediocrity. Most companies want to hire average people and pay them an average amount of money, or a bit less if they can get away with it. I don't claim that this is necessarily wrong, just hypocritical.
They can go on about "passion" and wanting "the best people" but they know that passionate people can be difficult to deal with and the best people not only want the best money and benefits but they want some say in how things get done.
And would they hire someone "passionate" in their late forties or is this merely another codeword for "naive new graduate"?
Ame
Apple on the other hand is so clearly old line. Make quality and useful products targeted to an audience willing to pay for the products. Charge enough for the product to create a good profit. Give good service before, during, and after the sale. Charge enough so that at the end one has enough to pay for fixed costs, manufactureing, service, overhead, and research and development. Do not be afraid to change the product to meet demands, and throw in a bit of flash. This probably had not changed since Ford innovated the car in on color Black, with evolved into the mustang of many colors. I think the old Ford put some big dogs out of bussiness as well.
I understand what the article is saying, but the article is talking about established firm. Apple, as an established firm, did exactly what it was supposed to do. That is fixed itself. Apple has been, and is, a major manufacturer of consumer and proffesional intergrated computer solution. So is Dell. MS only supplies software. Apple is and will continue to be, at least in the near future, a to manufacuturer of high tech solutions. The have proven that they will adjust to meet new needs, just as old bussiness says they should. The article cites IBM, which also did what it needed to do. Refocus on the customer, develop customer oriented products that provided real value. They talk about how the iPod is unique, but how many new catagories of product did IBM help create? The selectric, the PC, SQL, GML, etc.
It is ludicrous to think that anything other than good products or services matter, or that creating new products is something new. IBM exists because it started creating products and focused on customers.
As far as google, that is a story yet to be wrote. They have an Enron like grasp on the ad market, unregulated, not transparent, unpredicatable. The success may be last remant of the dot com boom, or they may be able to leverage advertisers in the same way that TV did. If they are succesful, it will be nothing but bussiness as usual. Create a product, namely adwords, charge enough for it to generate a profit, and use some of the cash to innovate.
I think what happened, especially in the 70's and 80's, was the sense of entitlement of the big corporations. That somehow Americans were obligated to purchase the products no matter how horrible they were. In a perverse way, they were applying the soviet model to capitalism, where the people had to buy what they state supplied, except in out case capatilism provided such an oversupply that we had the illusion of choice. This was illustated with the government bailout of chrysler. In fact, some of the few comapnies that haven't leared thier lesson are in the auto industry. Chrsyler has so given up and is running ads featuring it German owner. In the end what we may be seeing is not new rules of bussiness, but the return to the basics. Make a product, sell a product at a fair price, and realize the consumer is the boss.
"She's a scientist and a lesbian. She's not going to let it slide." Orphan Black
Speak for yourself. With no big business to pay an IT department, you're relegated to programming after your pizza delivery job. Actually, without big business, there wouldn't even be PC's.
"At Genentech, CEO Art Levinson says he actually screens out job applicants who ask too many questions about titles and options..." Mr. Levinson went on to say that he also screens anyone asking about salary, vacation, internal advancement, the company's business model, stock performance, or any other matters pertaining to the position. "I ask them, 'Do you want to cure cancer?' It's a simple 'yes or no' question. Any information about us is irrelavant."
Anybody else notice Slashdot has added ads in the RSS feeds? This story's summary has an ad for Camtasia Studio and it's the first I've noticed.
Hrmm. A bit annoying...
Technology has been changing the way business has been conducted forever. People can run their business in pajamas while doing laundry at home. I think it all evens out, though. Avant garde companies hire people who are passionate about their work while old-school companies hire good businesspeople. In both instances, the person being hired is probably a very hard worker, or else they won't last long.
With regard to hiring. . . After a company reaches a certain level of success and public recognition, large numbers of people start applying for jobs just because they want to work for a successful company -- not because they want to help make the company successful. In other words, they want to ride the gravy train. Those are the ones you have to weed out.
Start-ups and small companies rarely have this problem. It's after your company turns out to be Google, then everybody wants to climb on board.
In your example Bob IS the passionate person. From the factors the manager listed there is no way he hates his job and can write top code and work well with everybody. Being passionate about what you do isn't about saying how much you love it, its about waking up in the morning and WANTING to go to work and get stuff accomplished.
;P
The manager you imagined is just an example of a bad manager, and not how I imagine hiring passionate employees at all. I would imagine the manager hiring Bob and hearing Bob talk with enthusiasm about all the ideas he has to implement. Hed probably pass over the cookie cutter from Nabisco
"how can they call it a MINE if everything here is THEIRS?!?!" -Straight Jacket
I get links to I get links to http://rss.slashdot.org/~r/Slashdot/slashdot/~3/ht tp://it.slashdot.org/article.pl?sid=06/07/11/15522 45&from=rss instead of http://it.slashdot.org/article.pl?sid=06/07/11/155 2245&from=rss resulting in errors when linking from Liferea.
Don't fight for your country, if your country does not fight for you.
Of course the "service sector" revolves around IP and the creation and maintainance of it.* The other kind of "service" is "would you like fries with that", but you can't build much of an economy on that.
Blinking a few little industries like Financial Services (banking, corporate, private, hedge and mutual fund management and advisory services); Corporate Services (outsourcing of payroll, HR, fulfillment, customer service or IT); Legal Services (anything other than IP law); Medical Services; et. al.
I think you'll find the french fry and clean linen group just isn't putting up the numbers necessary to account for the growth of service industries in the national GDP. There is some fuzziness in semantics; recall that line cooks have been mooted to be *manufacturing* hamburgers.
illegitimii non ingravare
The problem is that his passion vs results never goes both ways. Can a manager at Genetech who misses his numbers tell Art Levinson, "It's not about the money, it's about helping cancer paitients so you should just forget about those numbers I missed"? I seriously doubt it.
Seems I don't have the new version of Firefox yet. That's "semantic," not "symantic."
In his response to this article, Welch says, "No one is out saying, 'Let's screw this customer today, and if we do, our share price might go up 20 cents.' They're just not doing it."
Clearly, Mr. Welch does not have a cell phone or cable TV.
Your fantasies contain the seeds of important concepts.
Were you in business between 1981 and 2001? Tens of thousands of American companies were and very very very few of them grew their business by $400 billion. In fact very very very few of them had $400 billion in gross revenue for the entire 20 year period combined. So if, as you say, old Jack was just lucky enough to be in the right place at the right time, how come none of the others that were also there were "lucky".
A healthy level of cynicism is one thing but, lets not kid ourselves either. Give old Jack some credit. He did have a lot to do with GE's massive growth.
Articles like this are more an artifact of savvy PR by Google and Applet than they are a material fact. Technology changes the balance of power, but has no effect on the rules of business. This is like saying that a better running shoe changes the rules of the 100M dash. Business means being profitable, and Welch understands that. The "old" rules talk about that. The "new" rules are mostly a different way of looking at the old rules and no one has proven that the "new" rules are sustainable. Apple is not a great example of profitablility or marketshare and Google is worse. Google has espoused lots of theories about how to build a great company, but has yet to prove that it has built a great company. Many of you will ramble on about how good people make a good company, how the customer comes first, and all that jazz, and you're right, albeit indirectly. These all support profitability. If your customers are mad, you can win them back or get new ones. If your shareholders are mad they can sell your shares, depress your stock price, and take legal action against you to have your leadership changed. Companies that embrace technology take money away from those who don't. But the rules of the race are the same: if you are making the most money, you're winning...for now.
Disclaimer: I'm a Jack Welch fan.
Rank and yank is not a viable long-term strategy for personnel management. It's great for the first few rounds when you can presumably cut large chunks of deadwood. However, once you've removed all the deadwood, there's only live wood left, and it's at that point that you begin hurting your organization. Here's a link to a statistical study that illustrates this effect: http://www.blackwell-synergy.com/doi/abs/10.1111/j .1744-6570.2005.00361.x
Note: This may be why Jack did this for a few years at GE, then "made adjustments". Based on the study I've cited above, using rank-and-yank for more than 3-4 years is a complete waste of time.
-- If you're posting to be funny, and your sig is funnier . . . .
Suppose your workers' performance is in the 90th, 85th, and 80th percentiles for performance. In grade school, that would be a solid B-average workforce. Now the bottom gets slashed, knocking out all of the 80th percentile people. Who replaces them? If the workers' performance followed a Bell curve, the next percentage should be at 50%. Congratulations, you have just shot yourself in the foot.
Jack Welsh was another hardass CEO interested in his own self-interest and full of ego. That's the fact.
--Chag
Genentech screens out people who show an interest in politics? Sure, because those folks will be harder to steamroll.
:)
Passionate people who don't give a shit about corporate politics are much more maleable.
Of course, after they get their passion crushed, they're even easier to work with, particularly since they're also clueless about politics.
Hmmm. Maybe I'm in the wrong place.
Both of them are being pompous, Their statement should necessarily be backed up by figures that show they not only pay better than average industry wages but also take care of their employees better. It's a two way street, Yes, I want to cure cancer, everything else is left unsaid and you want to give me the best deal possible because you appreciate a passionate worker, and that too is left unsaid. Now where are those figures?
Not all of us are passionate or can be, maybe some of us have other priorities, passionate about travel but that doesn mean they don't care about work. Not all jobs require passion, maybe methodical, maybe passion. Their roles as leaders require them to be passionate, but maybe the apple accountant doesn't need to be passionate. I think realistically some people can be assholes, obessing about position and other superficialities, but other are just upfront, and not shy or shamed to put a value on themselves. Cheers to honesty.
I hope you will excuse my AC posting here but I think you will understand after reading my comment...
I own a business. I have about 50 employees in several different offices. While it is not something that I EVER would mention in public or in polite conversation, not a day goes by that I don't think about how I can "get more out of my employees" without costing myself a dollar. It may be shitty and it may be mean -- but it is a financial reality that all companies have to deal with. How do you produce/sell/create more while keeping costs the same?**
Answer: Culture.
I can certainly go out and hire X number of additional people. But the point of this daily exercise is simple: increase output while keeping "costs" the same or less. (After all, that's how you make a profit)
It is most certainly in MY (ie: the owner) best interests if my employees feel like they need to work 60-80 hrs/week to get ahead. I will do nothing to stop that kind of thinking. The smart manager or owner WANTS his employees to feel this way. And the truly genius companies that have pulled this off throughout their organizations (Apple, Southwest Airlines, etc) are almost all highly successful, partly due to this reason. They have convinced their employees that the "extra effort" is worth it -- and by worth it, they don't mean worth it for you. They mean worth it to the owners.
So yea, your post is well-placed and you don't even need a tin-foil hat to see the zero-sum game at play.
** (sidenote: Please realize that the business world is emotion-less. Finance doesn't care whether employees "feel good" or not. Please do not misinterpret that I am purposely trying to be an asshole just to be an asshole. This entire post is based on the financial reality -- not the emotional reality.)
I automaticly screen out companies that don't answer questions about salaries and options. I only want to work for companies that are passionate about compensating me.
For all intensive purposes, "whom" is no longer a word. That begs the question, "who cares"?
Punctuality is associated with discipline, order, conformity and control.
Passion isn't (generally).
So they want levels of passion similar to Mr Spock having a shag?
Although genentech is riding high on huge waves of publicity from its anticancer drugs, it is hard to say if many of them are actually doing anything.
For instance, Genentech got a huge amount of publicity when one of its anticancer mabs worked in colon cancer - but in this case "works" meant extends median survivial from 14 to 16 months.
I suppose if you are a cancer patient or a family member, two months is a lot.
But if you are passionate about curing cancer, looks more like a super, super $$ drug that does not really do anything
bottom line: genentech is certainly passionate about selling very, very exspensive drugs that may or may not be very very good.
This keeps getting repeated. "Old way is inferior to the new way." With the new way always being a more laid back, less money oriented approach.
I have news for that will just shock the world. Companies like Google and Apple are run just like every other company. People are hired for what they can do, and are let go for not living up to their potential. CEOs do what makes them more money. The only difference, is the that "new way" hides their intent behind an "employee friendly facade." How can Apple be part of the new way when Jobs is notorious for being the typical power hungry boss who will ridicule you in front of your coworkers? How is that the "new way"?
Google and Apple are not some awesome place where everyone just relaxes all day being "creative" and yet somehow still make money. At both companies, goals are set and if they are met people get in trouble or even fired. Just like at every other company. These companies also live and die by their stock value. Who was that bough an oversized company jet and decided to refit it? Was that some greedy boss at Bellsouth or Enron? Nope, it was the good natured guys at Google who don't care about money, right?
I thought twenty years ago that nanotech would be the cure for cancer. Since IBM wrote their name in single molecules in the 1960's, I thought that by now they would have biotech nano bits that could repair damaged cells and fix the tail ends of your dna to stop aging. In the 90's they had nanotech units that could supposedly do these functions -- but were too toxic to be used. Now there is nanotech packaging for food products that is supposedly safe? What gives? Is this doomed to be a cure only for the old money elite?
It's nice to see that the old BS executives used to spout off about is being replaced by new fresh, think outside-the-box BS. The purpose, however, is the same: to convince people how smart they are and to convince the more lemming-like investors that they are doing something new worth investing in.
It reminds me a bit of a scene in the Hudsucker Proxy:
REPORTER #4
How do you respond to the charges
that you're out of ideas? Has
Norville Barnes run dry?
NORVILLE
Not at all. Why, just this week
I came up with several new sweet
ideas. A larger model hula hoop
for the portly. A battery option
for the lazy and handicapped. A
model with more sand for hard-of hearing.
I'm earning my keep.
I suspect that a well-tanned nose would keep you in the top 10%.
The main rule is to remember what a business exists for. And that is not "to make money." Within three weeks of starting b-school we were being told that that was the route to disaster, because although that may be why people invest money or labour in the company, that is their reason, not the company.
The real purpose of a company is satisfy the wants and/or needs of a market segment at a price that the market segment is willing to pay. If you can do this and turn a profit, the company will continue. The market (And here, I mean the customer base, not the stock market.) does not care if you are making a profit. It does not care that your shareholders want ever-increasing profitability.
One of the thing about the "old rules" in the article is its emphasis on the stock price. This is to take your eye off of your market, and I contend that this is the major cause of most of the septic corporate behaviour in the world today.
In fairness to the CEOs, the market and thus the boards of directors insist on this devotion to share price. From the article: "Never before has a CEO more needed to take risks, but rarely has Wall Street been less receptive. A recent Booz Allen study found that a CEO is vulnerable to ouster if his stock price has lagged behind the S&P 500 by an average of 2 percent since he took the top job." (God forbid we should take a momentary hit is stock price because we are developing a new market.) "Cisco Systems CEO John Chambers says he knows a number of colleagues who are planning to step down because of the difficulty of balancing the shortterm pressures of the Street with what's in the longterm best interest of the company."
Despite what many people think about the "intelligence" of the stock market, the function of investment funds is only to make money. There is no incentive in the stock market to take the long view.
In the book "Up the Organization", the author, Robert Townsend, relates that when he was hired to be the CEO of Avis, he insisted on one condition: "Don't talk to me about the stock price for two years!" He didn't want to be distracted from the long term goals by worrying about the vagaries of the stock market. I have alwys thought Mr Townsend to be a very smart man.