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Leadership Reading

Heartfelt Leadership at United Airlines and a Journey Through Adversity: Summary of Oscar Munoz’s Memoir, ‘Turnaround Time’

December 16, 2024 By Nagesh Belludi Leave a Comment

Leadership is a delicate balancing act where success and failure can hinge on perception. When a company thrives, traits like optimism and active listening are celebrated as visionary, and leaders who engage with their teams are hailed as collaborative, inclusive, and forward-thinking. But when things go wrong, those same qualities come under attack—optimism’s dismissed as naivety, and “listening” gets criticized as indecisiveness or an overreliance on consensus. Ultimately, results shape the narrative, transforming managerial traits into strengths or weaknesses based on the outcome.

'Turnaround Time' by Oscar Munoz (ISBN 0063284286) Oscar Munoz, former CEO of United Airlines, waited more than four years after handing the reins to Scott Kirby before publishing his business memoir, Turnaround Time: Uniting an Airline and Its Employees in the Friendly Skies (2023.) With United now performing well despite the harsh challenges it faced over the past five years—such as the COVID-19 pandemic, operational disruptions, Boeing’s issues, and various supply chain problems—Munoz’s retrospective lens casts his “people-first leadership” in a favorable light.

At United, Munoz was more of a caretaker CEO than an industry visionary. He was elevated from the board to CEO following his predecessor’s scandal-driven resignation, with his main charge being to find a competent successor with deep industry experience. He succeeded spectacularly by recruiting Scott Kirby after Kirby was abruptly dismissed from American Airlines in 2016. When Munoz handed over the CEO role to Kirby just before Christmas 2019, on the eve of the COVID pandemic, analysts believed Munoz’s legacy would largely rest on hiring Kirby and his rocky initial response to the David Dao incident, followed by a dramatic course correction. To his credit, Munoz used the Dao debacle as a turning point, overseeing an acceleration in significant changes to United’s operations and employee culture.

However, Turnaround Time, which emphasizes the “human aspect of leadership,” lacks the tactical depth expected from a CEO memoir. It’s filled with anecdotes about “listening to employees” rather than providing detailed business strategies or a comprehensive portrayal of the complexities of running a major airline during a challenging time for the industry, with countless variables and uncontrollable factors shaping outcomes.

A key moment in the book recounts Munoz’s seemingly insightful interaction with a flight attendant named Amy Sue, who tearfully told him, “I’m just tired of always having to say, ‘I’m sorry.'” Her words underscored the burden frontline employees face—apologizing for service flaws and management decisions beyond their control. This encounter, claims Munoz, crystallized his leadership mission: to empower employees by aligning resources and support with their professional pride. United’s morale had been battered by financial struggles following 9/11, bankruptcy, and a slow-moving “merger” with Continental Airlines. Change was overdue, and Munoz’s employee-first approach aimed to revive a dispirited workforce.

Leadership Lessons from United Airlines' CEO, Oscar Munoz Yet, one can’t help but ask: Why hadn’t Munoz engaged with employees during his decade on the board of United’s parent company (and another five years at the acquiring company, Continental Airlines)? Wise board members often gain an unfiltered understanding of company culture by connecting with employees directly rather than relying on polished C-suite reports, which can skew the board’s perceptions of the organization’s internal climate.

The real strength of Munoz’s memoir lies in his personal story, which brings a human depth to the book. Just 38 days into his CEO role, Munoz was hospitalized with coronary artery disease and underwent emergency heart surgery, followed by a heart transplant two months later. In Munoz’s telling, this harrowing experience reshaped his approach to leadership, infusing it with compassion and an awareness of the personal struggles many employees likely faced. With Kirby and the rest of the leadership team handling the daily operations and improvements of the airline, Munoz focused on creating a supportive company culture. Frontline employees I’ve interacted with often describe Munoz as personable and genuinely interested in their well-being and professional satisfaction.

Munoz’s heart transplant and recovery add emotional resonance to what might’ve been a typical corporate memoir. Turnaround Time highlights the emotional and psychological resilience that underpinned his leadership at United, showing how his personal journey mirrored his professional one. It’s a fast, engaging read worth picking up for the human story behind the corporate challenges.

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Filed Under: Business Stories, Leadership, Leadership Reading, Leading Teams, Managing People Tagged With: Aviation, Books, Change Management, Conversations, Great Manager, Leadership, Leadership Lessons, Performance Management, Problem Solving, Teams

Lessons from Tito’s Leadership of Yugoslavia

November 18, 2024 By Nagesh Belludi Leave a Comment

Lessons from Tito's Leadership of Yugoslavia This year, I took two long trips across the Balkans, focusing on the region’s turbulent 20th-century history.

Understanding the role of Yugoslav revolutionary leader Josip Broz Tito has been instrumental in grasping the complex ethnic relations, historical grievances, and aspirations that continue to shape the region’s identity and politics.

Tito’s regime demonstrates how a coercive leader can unite a fragmented people through sheer willpower. However, it also highlights how the absence of sustainable systems and institutions can lead to collapse once that leader is gone, as evidenced by the violent conflicts of the 1990s. Encyclopædia Britannica encapsulates on Tito’s legacy thus:

The irony of Tito’s remarkable life is that he created the conditions for the eventual destruction of his lifelong effort. Instead of allowing the process of democratization to establish its own limits, he constantly upset the work of reformers while failing to satisfy their adversaries. He created a federal state, yet he constantly fretted over the pitfalls of decentralization. He knew that the Serbs, Croats, Slovenes, and others could not be integrated within some new supranation, nor would they willingly accept the hegemony of any of their number; yet his supranational Yugoslavism frequently smacked of unitarism. He promoted self-management but never gave up on the party’s monopoly of power. He permitted broad freedoms in science, art, and culture that were unheard of in the Soviet bloc, but he kept excoriating the West. He preached peaceful coexistence but built an army that, in 1991, delivered the coup de grâce to the dying Yugoslav state. At his death, the state treasury was empty and political opportunists unchecked. He died too late for constructive change, too early to prevent chaos.

Tito was a charismatic and strong leader whose personal authority and presence were key to maintaining national cohesion. His doctrine of “Brotherhood and Unity” aimed to bridge Yugoslavia’s deep ethnic and national divides. However, the political institutions he left behind were weak and overly reliant on his personal authority, creating a power vacuum that no one could fill after his death in 1980.

The poem “Comrade Tito, from your path we will not stray!” written at the time of his death, was soon forgotten. It instead underscored the instability of the region’s political landscape and the futility of suppressing deep-seated ethnic and nationalist divisions through authoritarian rule. The federal structure Tito had established began to unravel, leading to violent conflicts.

Idea for Impact: Many leaders are skilled at rallying people around a common vision, instilling purpose and urgency. However, this often creates a dependency on the leader’s presence, making the system vulnerable to collapse once they are gone.

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Lee Kuan Yew on the Traits of Good Political Leaders

November 14, 2024 By Nagesh Belludi Leave a Comment

'The Wit and Wisdom of Lee Kuan Yew' by Lee Kuan Yew (ISBN 9789814385282) Leaders are assessed through a nuanced blend of factors, primarily focusing on the long-term effects of their decisions. Their effectiveness is judged by the quality of their policy outcomes, the individuals they’ve mentored, and the culture they’ve cultivated. Naturally, these evaluations are subjective and can vary depending on personal perspectives, values, and historical contexts.

When Lee Kuan Yew began his eighth and final term as Singapore’s Prime Minister in 1988, he announced it would be his last, outlining his plans for the next two years before passing leadership to Goh Chok Tong. Lee also highlighted the significance of exit strategies and smooth transitions in evaluating political leaders. Watch a segment from his speech delivered on September 13, 1988.

Political leaders are judged first by how effectively they have exercised their authority in the interests of their people. Second, by the way in which they have provided for continuity so that a successor government will continue to protect and advance the interests of their people. Third, by the grace with which they leave office and hand over to their successors.

Lee Kuan Yew was a remarkable leader who, through visionary governance, turned Singapore from a struggling backwater into one of the world’s most affluent nations. Though he faced criticism for his strong-handed approach, his leadership will continue to be acclaimed for its vision, pragmatism, and enduring impact.

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Filed Under: Great Personalities, Leadership, Leadership Reading, The Great Innovators Tagged With: Humility, Integrity, Leadership, Leadership Lessons, Role Models, Wisdom

Curate Wisely: Navigating Book Overload

September 12, 2024 By Nagesh Belludi Leave a Comment

Curate Wisely: Navigating Book Overload Most books are trash—seriously. Most could be condensed into booklets, booklets into essays, essays into articles, articles into paragraphs, and paragraphs into tweets.

To handle the avalanche of books published each year, get picky—grab the ones that really speak to you, match your vibe, and have solid recommendations. Don’t trust those internet best-seller lists; they can be manipulated through “leapfrogging.”

When you crack open a new book, start with the intro. It sets the stage, tells you what to expect, and usually gives examples. Check out the table of contents and scan through a few sample chapters to see if it’s your jam before committing to a full read.

Also, consider old favorites—they stick with you better after a few rounds. Trust me; it takes a few passes to really get those ideas to sink in.

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A Business Model Like No Other: Book Summary of ‘Becoming Trader Joe’

August 15, 2024 By Nagesh Belludi Leave a Comment

Why Trader Joe's is Anything but Your Typical Grocery Store!

Describing the cult-like allure of “America’s favorite grocery store” can be a challenge for those who haven’t experienced it firsthand. At Trader Joe’s, you’re greeted with an eclectic mix of top-notch, health-conscious products, each boasting funky labels and offered at seemingly fair prices. The cheerful crew, sporting those iconic Hawaiian shirts, adds to the welcoming vibe, making every visit feel like a unique and enjoyable adventure in shopping.

From Niche Market to American Icon: The Entrepreneurial Spirit of Trader Joe’s

Founder Joe Coulombe’s autobiography, Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys (2021,) provides an engaging and insightful peek into the beginnings of the iconic store. Coulombe (1930–2020) sheds light on the distinctive procurement strategies and marketing anecdotes that have cemented Trader Joe’s status as a beloved American institution.

Trader Joe's: Cheerful Culture, Unique Offerings for Discerning, Healthy, Global Consumers. While serving as a management advisor at Rexall Drugstores in the 1950s, Coulombe, a Stanford Business School graduate, delved into opportunities within the grocery industry. He identified a market niche consisting of budget-conscious, well-educated, and well-traveled middle-class consumers. This led to the launch of the first Trader Joe’s store in Pasadena, California.

Trader Joe’s quickly captured the hearts of food enthusiasts who appreciated its unique product offerings, value, and shopping experience. Positive word of mouth played a pivotal role in attracting customers and driving the company’s expansion.

By the mid-1970s, Trader Joe’s had expanded to numerous locations across California, captivating customers with its diverse and exclusive offerings. Notable products like the famous “Two-Buck Chuck” wine and the perennial favorite frozen Mandarin Orange Chicken became staples. In 1977, Trader Joe introduced new private labels, including Trader Ming’s for Asian cuisine, Trader Jose for Mexican fare, Trader Giotto for Italian dishes, and Pilgrim Joe for New England-style food. (These product brands were phased out in the last few years as part of a shift in societal consciousness concerning racial equality and cultural sensitivity.)

Trader Joe’s Triumph: Practical Genius Shaped a Grocery Empire

Coulombe’s entrepreneurial triumphs were rooted in practical ingenuity rather than lofty visionary ideals. He placed importance on factors such as deep product knowledge, continual small-scale enhancements, and a keen understanding of shifting consumer preferences. Rather than seeking personal glory, Coulombe emphasized employee respect, a touch of luck, and a sharp legal mind.

'Becoming Trader Joe' by Joe Coulombe (ISBN 1400225434) One standout aspect of Trader Joe’s success was its early recognition of the growing demand for natural and organic products, reflecting Coulombe’s astuteness in identifying evolving consumer trends. His innovative initiatives further propelled Trader Joe’s into the limelight. He introduced the “Fearless Flyer” newsletter, providing customers with captivating updates, stories, and product recommendations. Additionally, his “Food and Wine Minute” radio segments, brimming with tales from global wine regions and snippets of food trivia, served as effective tools for customer engagement and brand promotion.

Even after the Albrecht family’s acquisition in 1979, integrating Trader Joe’s into their Aldi (Nord) empire, the essence of Coulombe’s leadership endured. Remaining at the helm as CEO for another decade, he steadfastly upheld the company’s founding principles, focusing on overarching goals, nurturing customer relationships, and ensuring positive experiences for frontline staff.

A Savvy Saga of Entrepreneurial Genius & Quirky Anecdotes

Read Becoming Trader Joe (2021) for the fun fact-laden business tales of small-scale savvy and ingenious approaches to business. Leaf through the entertaining, fact-filled stories of modest cunning. This book is a witty, vibrant, and pragmatic business guidebook that rejects the romanticization of entrepreneurship.

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Sony Personified Japan’s Postwar Technological Ascendancy // Summary of Akio Morita’s ‘Made in Japan’

August 12, 2024 By Nagesh Belludi Leave a Comment

'Made in Japan' by Akio Morita (ISBN 0452259878) Akio Morita’s autobiography, Made in Japan (1987,) offers a captivating narrative of Sony’s remarkable journey to success and sheds light on the mindset of one of the era’s most accomplished businessmen, as well as a vocal advocate for free trade.

As the co-founder and CEO of Sony Corporation alongside Masaru Ibuka, Morita symbolized Japan’s post-war resurgence and economic expansion. Under his guidance, Sony emerged as a symbol of Japan’s industrial prowess, reshaping the perception of Japanese products in the West.

Akio Morita’s Journey: From Saké Heir to Sony Trailblazer

Morita, born into privilege in Nagoya, was destined to inherit his family’s saké brewery. Yet, his interest in the family’s phonograph during high school diverted him toward electronics. Serving as a shore-based engineering officer for the Imperial Japanese Navy during WWII, Morita subsequently joined forces with Ibuka to found Tokyo Tsushin Kogyo Kabushiki Kaisha (Tokyo Telecommunications Engineering Corporation,) with an initial investment of 190,000 yen (some US$500 then.)

Sony: Pioneering Consumer Electronics Excellence, Echoing Apple's Innovation Ibuka concentrated on research and development, and Morita took charge of obtaining funding and managing sales, as well as overseeing marketing activities from an abandoned department store. Despite initial setbacks with inventions like an electronic rice cooker and the first tape recorder, Sony’s breakthrough came with the transistor, licensed from Bell Laboratories in 1953. This innovation led to the development of a portable transistor radio, which captivated consumers four years later.

A trailblazer in product development and marketing, Morita was determined to redefine the perception of Japanese goods globally. To establish Sony’s identity internationally, he rebranded the company as Sony Corporation, derived from the Latin word “sonus” meaning sound, reflecting its commitment to audio technology.

Akio Morita’s Vision: Transforming Sony into a Global Tech Powerhouse

Recognizing the negative connotations associated with “Made in Japan” among American consumers in the 1960s, Morita relocated to New York with his family to immerse himself in the language and culture of Sony’s largest market. His leadership ethos prioritized creativity, teamwork, and customer-centricity.

In the early 1990s, Sony emerged as the Apple of its time, establishing itself as a trailblazer in the world of consumer electronics. Under the visionary leadership of Akio Morita, Sony pioneered a series of groundbreaking products that not only captured the imagination of consumers but also reshaped entire industries. From the iconic Walkman that revolutionized personal audio to the introduction of the VCR, Diskman, and Trinitron color television, Sony consistently pushed the boundaries of innovation. Sony’s commitment to sleek design, cutting-edge technology, and user-friendly interfaces set it apart as a symbol of technological prowess.

Sony Walkman: Pioneering Portable Music and Cultural Revolution Morita’s strategic foresight, coupled with Sony’s dedication to quality and creativity, positioned the company as a trendsetter, influencing the global perception of Japanese goods and cementing its legacy as the trailblazer of the early technological era. Morita even went to lengths like designing special white shirts with oversized pockets for salesmen to showcase the Walkman’s portability during its American launch.

The Visionary Behind Sony’s Global Rise

Read Made in Japan for a captivating narrative of Morita’s journey, Sony’s evolution, and Japan’s rise to global prominence. Delve into Morita’s strategic decisions, leadership style, and commitment to quality and innovation, offering valuable insights into building a global brand, overcoming adversity, and transforming industries. Uncover the post-war Japanese commercial landscape, trade tensions with America, cultural dynamics, and management principles that propelled Sony’s success.

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Book Summary: Jack Welch, ‘The’ Man Who Broke Capitalism?

June 23, 2022 By Nagesh Belludi Leave a Comment

The Man Who Broke Capitalism (2022) by New York Times columnist David Gelles contends that the pernicious greed spawned by former General Electric CEO Jack Welch is exceptionally responsible for exposing the structural failings of capitalism in recent decades.

'The Man Who Broke Capitalism' by David Gelles (ISBN 198217644X) The danger inherent in any ideology grows stronger when it starts to thrive because it swiftly morphs into temptation—a voracious appetite for ever better “returns” in the present case. Welch was indeed the most visible catalyst and a much-imitated champion of brutal capitalism. But Gelles’s narrative draws his book’s lengthy subtitle (“How Jack Welch Gutted the Heartland and Crushed the Soul of Corporate America”) excessively, thrusting ad nauseam the well-founded thesis against Welch’s ploys and “the personification of American, alpha-male capitalism.” See my previous articles (here, here, and here) about how the faults of Welch’s strategy become evident many years after his retirement.

Gelles does an agreeable job of outlining the socioeconomic paradigm that has made modern western capitalism’s shortcomings ever more apparent. Starting with influential economist Milton Friedman’s decree in the ’70s that the one and only social responsibility of a business is to maximize profits, Gelles explains the revering of Welch’s “downsizing, deal-making, and financialization” strategy. Without balance, it provided short-term benefits for shareholders, but the long-term well-being of corporations and society lost out. A sense of restraint is most pertinent to the power of capitalism.

Capitalism isn’t irretrievably bound to fail, as Gelles rightly argues, but it needs to be rethought. It’s morally incumbent upon the social order to inhibit the embedded incentives that create powerful tendencies towards short-termism. Gelles offers no more realistic, objective insights than the familiar solutions prescribed by our career politicians.

Overall, Gelles’s pro-Fabian polemic falls short of a fair-minded assessment of the epoch’s economic forces. Indeed, many of Welch’s tactics were timely and necessary, but he pushed them farther and longer. Too, Gelles fails to study counterexamples of many corporate leaders who’ve thoughtfully copied Welch’s playbook and helped their businesses and communities prosper, not least because they were restrained enough to avoid Welchism’s blowbacks.

Recommendation: Speed Read The Man Who Broke Capitalism for a necessary reappraisal of the legacy of Jack Welch. There isn’t much eye-opening here, but author Gelles affords a relevant parable about the power of restraint and the time- and context-validity of ideas.

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Nuts! The Story of Southwest Airlines’ Maverick Culture // Book Summary

May 30, 2022 By Nagesh Belludi Leave a Comment

Kevin & Jackie Freiberg’s Nuts! Southwest Airlines’ Crazy Recipe for Business and Personal Success (1996) is a popular tome about the history and culture of Southwest Airlines and the fun-loving antics of its colorful co-founder and CEO Herb Kelleher (see my tribute.)

'Nuts- Southwest Airlines' by Kevin and Jackie Freiberg (ISBN 0767901843) Despite its Pollyannaish tone and repetitive narratives, Nuts| is a very enjoyable cheerleaders’ account of how an underdog overcame roadblocks and thrived in a competitive industry.

Nuts| focuses on the people-oriented culture that Herb and his secretary Colleen Barrett established based on Herb’s well-known dictum, “The business of business is not business. The business of business is people.” To Herb, Southwest was a cause—never just a company. The Freibergs write,

If there is an overarching reason for Southwest Airlines’ success, it is that the company has spent far more time since 1971 focused on loving people than on the development of new management techniques. The tragedy of our time is that we’ve got it backwards. We’ve learned to love techniques and use people. This is one of the reasons more and more people feel alienated, empty, and dehumanized at work. Many organizations today would be surprised at how much more people would be willing to give of themselves if only they felt loved.

Nuts| is dreadfully out-of-date. Southwest and the airline industry have changed a lot since the mid-90s. Southwest even stopped handing out peanuts to protect passengers from peanut-related allergies.

The miracle at Southwest Airlines could keep on only so long. As long as Herb was the CEO, employees would go the extra mile for the sake of Herb. Until his retirement in 2001, Herb preserved Southwest’s unique cost structure and work rules. Kelleher’s successor, Jim Parker, presided over mounting labor tensions and quit after just three years. CFO Gary Kelly replaced Parker in 2004. Bob Jordan became CEO in 2022.

The going has not been smooth for Kelly. Southwest has become more like the other carriers regarding employee relationships and cost structure. The rehabilitated legacy airlines and a new breed of ultralow cost carriers have chipped away gradually at many of Southwest’s apparent competitive advantages. Yes, customers still rave about Southwest’s friendly staff, unpretentious service, and flexibility in travel planning. However, Southwest hardly ever has the lowest fares on most routes. In fact, Southwest’s average fares have outpaced the industry by 12% since 2009.

Recommendation: Speed-read Nuts! … it’s full of original insights, upbeat stories, and concrete suggestions for principle-centered leadership and how to inspire people to achieve incredible results. Here are the key takeaway lessons:

  • Even a little respect goes a long way. Give employees responsibility and entrust them to take that responsibility.
  • Set the ground rules—and let employees be creative. “Culture is one of the most precious things a company has, so you must work harder at it than at anything else.”
  • Give your employees some skin in the game, and they’ll go the distance. Southwest claims, “We have credibility because we tell people what we’re going to do and then we do it.”
  • Empower workers to make decisions at the customer level. Employees who feel they have leeway in their jobs to make the “right decision” depending on circumstances are happier, more confident, and more productive. They’ll even give extra—because they believe their work has special meaning and is not just a job.
  • Make sure people feel they can be themselves and have opportunities to express individuality.
  • See yourself as a motivator and a positive force. When things go wrong, accentuate the positive and focus on a path to a solution. It’s an approach that employees will admire and want to emulate.
  • Build a sense of community. Foster the feeling of a “family” in which employees can count on each other professionally and personally.
  • Recognize that employees have lives outside of work. Celebrate every milestone to establish and strengthen relationships. The walls of Southwest’s headquarters are covered with pictures and commemorative plaques of picnics, community service awards, customers’ commendation letters, service employee milestones, and tributes to important cultural events.

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Top Books I Read in 2021 & Recommend

December 30, 2021 By Nagesh Belludi Leave a Comment

  • Eric Weiner’s The Socrates Express: In Search of Life Lessons from Dead Philosophers (2020) is a distillation of the teachings of 14 great philosophers. The insights resonate with a fresh vibrancy for our problems today.
  • Daniel Kahneman’s Thinking, Fast and Slow (2011) will open your eyes to the quirky and error-prone ways in which you can be influenced in ways you don’t suspect. A showcase of the innate biases of the mind and unthinking approaches to decision-making.
  • Jeff Immelt’s Hot Seat: What I Learned Leading a Great American Company (2021) is the former General Electric CEO’s narrative of the collapse of the once-mighty company. Immelt owns up his many mistakes with a certain self-awareness and offers a then-in-time rationale for his significant decisions.
  • Greg Chapman’s The Five Love Languages: How to Express Heartfelt Commitment to Your Mate (1992) elaborates the notion that people express love differently, and people feel loved in different ways. It’s a convenient formulation, and it’s simple and relatable.
  • Clayton M. Christensen’s How Will You Measure Your Life (2012) is an entreaty to applying the principles of management business to our personal lives. Christensen’s reflections on pursuing fulfillment and standing up for your beliefs chord with many.

See also my book recommendations from 2020, 2019, 2018, 2017, 2016, 2015, and 2014.

The five books I reread every year are Benjamin Graham’s Security Analysis and The Intelligent Investor, Phil Fisher’s Common Stocks and Uncommon Profits, Dale Carnegie’s How to Win Friends and Influence People, and Peter Drucker’s The Effective Executive.

You may be interested in my article on how to process that pile of books you can’t seem to finish and my article on how to read faster and better.

I wish you enlightening reads in 2022. Recall the words of the American philosopher Mortimer J. Adler, who said, “In the case of good books, the point is not to see how many of them you can get through, but rather how many can get through to you.”

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General Electric Blame Must Be Shared: Summary of Ex-CEO Jeff Immelt’s ‘Hot Seat’

March 4, 2021 By Nagesh Belludi Leave a Comment

Leadership is tough. Some things work out, and some don’t. Other things end up epic failures. But no company gets anywhere without trying.

In the fullness of time, when the company does well, as suggested by its stock price, such leadership attributes as optimism and foresight are heralded as brilliant. But when things go wrong, these very attributes are the first to get the blame.

“More complete telling of the truth”

Hot Seat: What I Learned Leading a Great American Company (2021) is former General Electric CEO Jeff Immelt’s response to the allegations that his ineffectiveness led to the collapse of the once-mighty company. It’s an engaging book that must be studied after Wall Street Journal reporters Thomas Gryta and Ted Mann’s worthwhile postmortem, Lights Out: Pride, Delusion, and the Fall of General Electric (2020; my summary.)

My legacy was, at best, controversial. GE won in the marketplace but not in the stock market. I made thousands of decisions impacting millions of people, often in the midst of blinding uncertainty and second-guessed by countless critics. I was proud of my team and what we’d accomplished, but as CEO, I’d been about as brilliant as I was lucky, by which I mean: too often I was neither.

Confluence of bad luck, bad timing, leadership mistakes

I’ve previously written a dissertation on what happened at General Electric (GE.) Immelt had a tough act to follow. Under the previous CEO, the exceptional Jack Welch, GE got spoiled by greed and got away with a lack of transparency.

Over the years Jack Welch had collected a group of idol worshippers and sycophants around and outside the company who fostered an unrealistic view of GE and of Jack himself.

Immelt was saddled with Welch’s doomed legacy, but Immelt failed to right-track it in his 16 years at the helm.

Early in his tenure as CEO, Immelt realized the scope of a potential disaster in GE Capital but couldn’t break its bad habits swiftly. In fact, Immelt went about pivoting the company around slow-growth industrial products. Still, as he did so, his strategy entailed relying on GE Capital to deliver easy profits. It was a hard addiction to break, and Immelt couldn’t discard GE Capital easily.

In the short term, GE Capital was our strategy. We had no other engines of growth. We had to keep our heads down and weather the scrutiny. … We would let the rest of GE Capital grow so that we could keep earnings on a steady path, while the industrial businesses could catch up.

On top, Immelt overpaid for acquisitions, most prominently for the French power generating equipment company Alstom. At the same time, his bet on fossil-fuel-based power equipment was spectacularly mistimed because market conditions deteriorated quickly.

In the final years, Immelt’s misfortunes, even in such previously thriving businesses as healthcare and transportation, piled on. When Immelt called Jack Welch after stepping down, Welch told him supportively, “We both know you never caught a break.”

Jeff Immelt Admits He Let Everybody Down.

Immelt’s Hot Seat is a fascinating account of what it takes to lead a significant global business in times of rapid change.

Immelt owns up his many mistakes with a certain self-awareness. He rebukes a few people while acknowledging he should have been more accountable for everything that happened under his watch. But Hot Seat is primarily a then-in-time rationale of his significant decisions.

Interestingly enough, Immelt doesn’t offer insightful misgivings for the lack of transparency in GE’s financial statements, his outsized compensation, and the mischaracterization of insurance charges and pension liabilities.

Be advised, though, there’re so many details in Hot Seat that are unknowable without a first-rate knowledge of GE’s people and business model, starting with the Welch era.

“Every job looks easy (until you’re the one doing it)”

Read Hot Seat: What I Learned Leading a Great American Company (2021.) General Electric’s fall is a complicated story. It deserves to be heard from insiders such as Immelt as it does from journalists and stockholders.

Hot Seat should leave you with a fair-minded assessment of General Electric, Jack Welch, Jeff Immelt, financial engineering, the conglomerate business model, and Wall Street-oriented capitalism itself. These, sadly, many people don’t understand or know completely.

Wondering what to read next?

  1. Easy Money, Bad Deals, Poor Timing: The General Electric Debacle // Summary of ‘Lights Out’
  2. Book Summary: Jack Welch, ‘The’ Man Who Broke Capitalism?
  3. Innovation Without Borders: Shatter the ‘Not Invented Here’ Mindset
  4. General Electric’s Jack Welch on Acting Quickly
  5. The Checkered Legacy of Jack Welch, Captain of Quarterly Capitalism

Filed Under: Business Stories, Leadership Reading, The Great Innovators Tagged With: General Electric, Jack Welch, Leadership Lessons, Leadership Reading

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About: Nagesh Belludi [hire] is a St. Petersburg, Florida-based freethinker, investor, and leadership coach. He specializes in helping executives and companies ensure that the overall quality of their decision-making benefits isn’t compromised by a lack of a big-picture understanding.

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