So Jack Welch is becoming semi-enlightened in his later years. The man who previously promoted firing 10% of your employees every year is getting all soft and cuddly and wants companies to be good workplaces.

He even published an article called 6 ways to tell if you work for a great workplace. And he really is starting to get it. Unfortunately, he’s not quite there yet. Let’s look at where he gets it right and wrong.

His first point is that “1: Great companies demonstrate a real commitment to continuous learning.” Spot on. Well done, Jack.

But then he says that “2: Great companies are meritocracies. Pay and promotions are tightly linked to performance, and rigorous appraisal systems consistently make people aware of where they stand.”

No. Just, no. Many great workplaces don’t have rigorous appraisal systems. In fact, some great workplaces have been ruined when they start measuring everything. Just look at why Microsoft abandoned stack ranking:

Microsoft has been known as the ur-example of pitting employees against one another in an attempt to reward the excellent and weed out the weak, which gained widespread popularity in the 1980s after then-Chief Executive Jack Welch brought the ranking system to General Electric.

The problem is workers generally aren’t thrilled about having to play Game of Thrones at the office. David Auerbach, a former Microsoft employee, recently told Bloomberg Businessweek that the practice had employees feeling helpless and “encouraged people to backstab their co-workers.”

Yes, Jack Welch inspired it. No, it doesn’t work.

Under point 2 he also writes that “People with brains, self-confidence, and competitive spirit are always attracted to such environments.”

There are a few fundamental mistakes here. First of all, hiring for brains and self-confidence may land you with a lot of jerks. New York based company Next Jump tried it and found that:

…we followed a common practice used by the biggest tech companies in the world: to hire brilliant and driven people. But, after two years of heavily investing in this hiring process, concentrating our efforts at the top engineering schools on the east coast, we found ourselves with a small army of brilliant jerks.

The culture was toxic. Racial tension, blaming others, total disregard for other people’s opinions and total protection of one’s own ideas and work products. We did a rapid evaluation of all the people we would want to work with vs those we didn’t, and, in one day, we fired half our engineers.

[after that] humility became an important trait to screen for in our hiring process. We now interview for 45 minutes on humility. No matter how brilliant and driven a candidate is, if they get a humbs down on humility, we do not hire them. No exceptions.

And as for hiring competitive people, there is actually evidence that competing lowers performance.

Jack says that “3: Great companies not only allow people to take risks but also celebrate those who do.”

Excellent, Jack. I agree.

The next one is “4: Great companies understand that what is good for society is also good for business.”

Which is awesome, but then he has to add that “They offer flexibility in work schedules to those who earn it with performance.”

No. Great workplaces offer flexibility to everyone.

He also writes that “5: Great companies keep their hiring standards tight. They make candidates work hard to join the ranks by meeting strict criteria that center around intelligence and previous experience.”

But actually, some of the greatest workplaces I know hire based less on skill and much more on personality and attitude. Look at Southwest Airlines who famously “Hire for attitude, train for skill.” Or Pret a Manger in the UK, who hire happy people and the teach them what they need to know in the job.

And finally he writes that “6: Great companies are profitable and growing.”

Nope. They can be growing, but they absolutely don’t have to be. Ricardo Semler, the CEO of Semco in Brazil put it like this:

There is no correlation between growth and ultimate success. For a while growth seems very glamorous, but the sustainability of growth is so delicate that many of the mid-sized companies which just stayed where they were doing the same thing are much better off today than the ones that went crazy and came back to nothing. There are too many automobile plants, too many airplanes. Who is viable in the airline business?

If someone asks me, ‘where will you be in 10 years’ time?’, I haven’t got the slightest idea. I don’t find it perturbing either if we said, ‘look, in 10 years’ time Semco could have 500 people instead of 3,000 people’; that sounds just as interesting as 21,000 people. I’d hate to see Semco not exist in 10, 20, 50 years’ time, but what form it exists in, what business it’s in and what size it is are not particularly relevant.

A company certainly has to be profitable in the long run or it won’t be around but I would bet that there is no correlation between the growth rate of a company and how good a workplace it is.

Your take

What do you think? Is Jack Welch right or wrong? What makes a great workplace in your opinion?

I believe we’re seeing a new kind of leadership emerging.

It’s been a truism that leadership is about maximizing business results, whatever it takes. As the economist Milton Friedman depressingly put it:

The business of business is business.

He argued that a CEO who spent resources on anything that did not enhance shareholder value was failing his duties and could be fired or sued.

This kind of thinking is still incredibly prevalent in the business world and it leads to attitudes and actions that are incredibly damaging.

This is the kind of thinking that lets a corporation:

• Fire 1,000s of employees to raise stock prices temporarily.
• Engage in environmentally damaging production.
• Introduce a culture of overwork that works employees to the bone while damaging their careers, their health and their private lives.
• Confuse and cheat customers into buying as much as possible at the highest price possible, rather than helping customers buy what they need.
• Exploit workers, always paying them as little as they can get away with to make more money for their investors.
• Create toxic cultures where employees live in near-constant fear and frustration.

You may think me dystopian but these things go on daily in corporations all over the world. And ultimately executives think they are right to do these kinds of things because their only responsibility is shareholder value. They take no responsibilities to do good in the world – or even avoid doing bad.

In fact, they have been so immersed in this kind of thinking that they can do incredible harm and feel no remorse. I have seen way too many press releases where a CEO explains why she/he fired 1,000s of employees to “enhance stakeholder value” without showing even a shred of regret or emotional investment in the fact that their leadership is now harming 1000s of families.

And that is why I think we need a new kind of executive – one that is motivated primarily by doing good. Or, in other words, by increasing happiness.

And I do see a lot of these leaders. They are not perfect people but they have a clear vision of what they want in the world and rather than just maximizing shareholder value, they want to create more happiness in 4 domains:

1. For themselves
2. For their employees
3. For their customers
4. For the world

These leaders create organizations that are a force for good in the world. They lead in a way that is sustainable – not just environmentally but also economically and psychologically.

Their employees’ lives are better and happier for working there. Customers’ lives are improved by the company’s services or products. And the world is in some way a better place because this company exists.

And don’t ignore the first one: These leaders are happy themselves, because they know that their leadership is making things better, not worse.

There are many examples of these leaders in all industries and all over the world. I’ll be writing a book about them next. The ones I know of include Tony Hsieh, Richard Branson, Ben Zander, Ricardo Semler, Lars Kolind, Vineet Nayar, Thyra Frank, Rich Sheridan, Herb Kelleher, Colleen Barrett, Charlie Kim, Patch Adams, Odd Reitan, Ingvar Kamprad, Yvon Chouinard and many, many others.

Your take

Do you see more happy leadership or more if the old kind out there? What does either of them do to you?

And if you know any other happy leaders, I’d love to hear about them.

Related posts

• Video: Leading with happiness
• Should leaders focus on results or people? The answer is yes.
• Why every company should have a CHO (Chief Happiness Officer)

Here is a really scary email I got from a nurse in a US hospital. She was kind enough to give me permission to reprint the email here and you can see my reply below.

I would love to hear your ideas on the healthcare industry.  As you may know, hospitals reimbursement for Medicare are in part determined by patient satisfaction.  Management, in turn, has adopted the “customer is always right” in order to secure positive feedback. As you can imagine, this has not worked.

At the same time, nurses are quitting by the truckloads.  Employee morale is at a ridiculously low point and it has been so ongoing that the phrases you hear from nurses are, “Well, its better here than anywhere else”.  This is particularly concerning since it is seemingly so bad here.  Let me say that the nurses I work with absolutely love taking care of people.  It is the hurdles that are placed in front of us that make the job frustrating.

We work at critical staffing levels routinely, are floated to areas we have not been adequately trained, and are given unreasonable patient loads. It is unsafe.

A patient died recently and was not on the monitor at the time.  The organizations answer was to have staff sign a book at during the shift stating that the monitor was checked and all patients were on them… the reason the patient was off the monitor was because the nurse didn’t have time to do it.

We were critically staffed and even the charge nurse had a full team with 2/3 other nurses floated from a lower level of care and not trained to take care of this type of patient.  When the house charge nurse informed management that the reason was related to staffing, she was written up.

I don’t know of a single nurse who isn’t afraid of being fired.  Nurses routinely lie about this because to voice it would cost them their job.

It would be nice to be able to quit and move to another facility, however, it isn’t any different at other facilities.  This problem is prevalent, endemic, and critical.

Here is an example of the culture…
The hospital policy is for every nurse to take a 30 minute lunch break (its actually the law)
If you don’t take a lunch you can be written up
There is nobody here to relieve you for your lunch
Not enough staff on the floor to safely leave for lunch so we all eat at the desk while we work

We are not supposed to lift patients. There are 3 lifts in the entire hospital so we have to lift patients
When I informed the wound nurse that the increase in pressure ulcers were from staff being given too many patients to take care of properly and no lifts, I was told that we had plenty of lifts and to use proper body mechanics.

I don’t know if you have any ideas….but I’m hoping that you do.

And here’s my reply:

Thank you so much for your email. I have worked with some Danish hospitals and I see many of the same issues you point to, primarily that budget cuts lead to permanent understaffing.

It’s terrible. If there’s one industry where jobs should be fulfilling and meaningful it’s healthcare, because there you get to work directly on making patients’ lives better. But of course, this is impossible when you’re not given the resources to do the job well.

What happens in that case is that jobs become incredibly stressful and frustrating because employees see that the system is hurting patients instead.

Here’s what I think hospitals need: A rebellion. Nurses, doctors and other employees need to stand up and protest conditions in some way that management can not overlook.

I gave a talk about being a workplace rebel – you can see it here:

https://www.youtube.com/watch?v=VU8l4fhcxk0

This will not be easy – but neither is the current situation.

The obvious question is: What can a group of employees possibly do against a huge entrenched and uncaring system? And the answer is We don’t know. Nobody knows what we can do until we do it.

I wish I had something more specific to offer but I don’t think there are any easy solutions to this situation.