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Derek Irvine

Globoforce

Senior Vice President of Global Strategy

Read more about Derek Irvine

Blog: Company culture according to GE’s Jack Welch

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Recognise This! — Jack Welch puts company culture ahead of results. Do you?

When you hear the name “Jack Welch,” what do you think of first?
 
“Neutron Jack,” famous for an (often misunderstood) employee differentiation method that resulted in the bottom 10% of performers being let go annually? A powerhouse industry captain who helmed General Electric for decades? How about a vastly experienced CEO who puts company culture ahead of results?
 
Most don’t equate “Neutron Jack” with what many think of as the “soft” side of business. But Jack understands the fundamental power of strong company culture to drive business results, an insight that was also the core tenet of our book, Winning with a Culture of Recognition.
 
Case in point,  a recent article in Fortune by Jack and Suzy Welch in which they say:
 
“Soft culture matters as much as hard numbers. And if your company’s culture is to mean anything, you have to hang — publicly — those in your midst who would destroy it. It’s a grim image, we know. But the fact is, creating a healthy, high-integrity organisational culture is not puppies and rainbows.
 
"And yet, for some reason, too many leaders think a company’s values can be relegated to a five-minute conversation between HR and a new employee. Or they think culture is about picking which words — do we “honor” our customers or “respect” them? — to engrave on a plaque in the lobby. What nonsense.
 
“An organisation’s culture is not about words at all. It’s about behaviour — and consequences. It’s about every single individual who manages people knowing that his or her key role is that of chief values officer, with Sarbanes-Oxley-like enforcement powers to match. It’s about knowing that at every performance review, employees are evaluated for both their numbers and their values.”
 
Jack and Suzy go on to argue why you must get rid of the person that brings in the numbers whilst behaving in ways completely opposite the company values. This article in Inc. magazine walks through the four most common excuses for not getting rid of your worst employees and why you must overcome them.
 
The Fortune article points to several foundational requirements for building a winning culture of recognition that is proven to drive bottom-line business results through increased employee engagement, retention, productivity and performance. Not least of these are:
 
  1. Making culture an ongoing topic of conversation, training and reinforcement instead of a one-time event
  2. Taking the values off the plaque on the wall and deeply integrating them into the daily work of employees
  3. Clear rewards – and consequences – for how employees reflect the values in their work.
Derek Irvine is senior vice president of global strategy at HR software provider, Globoforce.
 

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Derek Irvine

Senior Vice President of Global Strategy

Read more from Derek Irvine
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