"You want to be No. 1. There's nothing wrong with that. You don't want to be a loser. Nos. 3, 4, and 5 don't have the same flexibility. You don't have the same level of resources. You can't do R&D at the same level."
We've talked before on why Welch felt it was important to be in the top two positions, and the reasons for it, like he stated above.
People have challenged him some on it because of the tendency for a number of large companies to become complacent with size, and the usual bureaucracy that comes with it.
His response to that: "I agree being No. 1 in a static environment is not by itself sufficient. No. 4 might have smarter management that uses money more wisely. What you do with the resources that come from being a leader - that's what determines your future."
What he was saying if you're not flexible and moving, the No. 1 position in any field will never last, or as he said, isn't "sufficient" by itself.
The willingness to be flexible, smart money management and overall allocation of resources is what makes a great business leader and company.
We can have all the resources at our command and still not be able to compete with other firms that knows the best way to use their resources.
What Welch was saying is with all things being equal, the one with the stronger position will win. He's also saying the company that has the most resources won't win if those resources aren't used to their fullest and wisest potential. We need to be masters of our resources; in the end, those that use them the best will win over time.
Other Jack Welch Resources:
Jack Welch's advice to MIT Sloan students
Remember to Sign up for my feed, bizzbite and digg this!
Sponsored link: The outsourcing every manager requires - Tampa Locksmith
Comment Preview