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Archive for October 31st, 2009

Jack Welch – On Differentiation: Or, making winners out of everyone

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JackWelchOn Differentiation by Jack Welch

If there is one of my values that pushes buttons, it is differentiation.

Some people love the idea; they swear by it, run their companies with it,and will tell you it is at the very root of their success. Other people hate it. They call it mean, harsh, impractical, demotivating, political,unfair—or all of the above.

Obviously, I am a huge fan of differentiation. I have seen it transform companies from mediocre to outstanding, and it is as morally sound as a management system can be. It works.

Companies win when their managers make a clear and meaningful distinction between top- and bottom-performing businesses and people, when they cultivate the strong and cull the weak.

Companies suffer when every business and person is treated equally and bets are sprinkled all around like rain on the ocean.


A company only has so much money. Winning leaders invest where the payback is the highest. When all is said and done, differentiation is just resource allocation, which is what good leaders do and, in fact, is one of the chief jobs they are paid to do. A company has only so much money and managerial time. Winning leaders invest where the payback is the highest.   They cut their losses everywhere else.

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Written by frrl

October 31, 2009 at 5:26 am

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