Overcoming a coronavirus-level economic whacking

Matt Perman May 21, 2020

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In his book The Real Life MBA, Jack Welch has a great chapter called “Overcoming a Whacking.” This is relevant to how businesses can start to recover from the economic pause created by the pandemic.

Here are my notes:

Overcoming a Whacking

…and getting better because of it

Business is like sports—fast, competitive, strategic, teamwork, nuance, surprise.

Sometimes there are outright calamities, but sometimes we're whacked because we're not prepared. Didn’t see something coming.

Whack recovery:

•     Own your whack
•     Hang on tight to your best
•     Get maniacal about drivers of cost, performance, and growth. Using data as guide.
•     Reinvent your strategy process
•     Reality-check your social architecture
•     Worry more about productivity

1. Own the whack

Know what happened and gain courage. Distracted, frightened, depressed workers can’t fix anything.

2. Hang on tight to your best

When a company gets in trouble, they often have a knee-jerk reaction of firing people without consideration of performance. Often because there's no performance appraisal system, and they want to show the board how fast they are acting and deeply they are cutting. So they take the easy way out—fire 10%, or cut salaries 10%, or buyout package to any worker willing, and the highest-paid and most qualified tend to take the buyout.

This is the epitome of weak, cowardly, demoralizing management. Why would you incentivize your best out the door and risk setting off a mass talent exodus?

You’ll never get out of a hole without your best people. So in hard times, we must do the counterintuitive and even courageous—give your best people more in current pay and long-term performance-based equity, and err on the side of too many participants than too few.

This is the time, of all times, to unleash the generosity gene. The best stay, and then others stay.

“Your best people are your best hope for survival and success. Do what it takes not to lose them.”

3. Meticulously search for ways to improve every part of the business

Meticulous does not mean slow!

Determine the true drivers of costs and growth.

4. Reinvent the strategy process

Not bi-annual session with elaborate presentations. Do the 5-slide approach.

Draw the best people from every part of the organization to create a mini deck. The slides should be:

1.     Competitive playing field; who they are, strengths and weaknesses. Get into detail.
2.     All of competitors' recent activity—products, tech, and people moves that have changed the landscape.
3.     What you’ve been up to in same regard over same period.
4.     What’s around the corner
5.     Your big, wow-worthy, winning move to change the landscape.

Find a smart, realistic, and relatively fast way to gain competitive advantage.

5. Reality check your social architecture

= How the business has its people arranged.

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Matt Perman is the director of career development at The King’s College and co-founder of What’s Best Next, which aims to empower Christians to be more effective in all areas of life. Perman is also author of the best-selling book What’s Best Next: How the Gospel Transforms the Way You Get Things Done and a frequent speaker on leadership, productivity and theology from a gospel-centered perspective. He lives in New York City.

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