Earvin Magic Johnson’s mentors told him to gain sufficient business knowledge before venturing into business. Following retirement from the NBA, Johnson searched for a place to acquire some ‘Business’ experience. He approached one of his friends Dr.Buzz, CEO of Lakers, who agreed to teach him about business.
Johnson went every day to Laker’s office and spent hours understanding the relationships with banks, finding sponsorships, the utility of stadium seats, the importance of understanding the customers, value propositions, value of players, suites, and advertisements. He took contact details of every employee and met them one by one over lunch. While having food, he constantly bombarded them with open-ended questions to understand their business success factors. He picked up their strategies, methods, and ideas. This learning inspired him to interview more business people. He learned how everyone built their brand and then, the business.
Johnson’s one particular trait helped him in this research. He was not afraid of or shy of asking questions. He didn’t feel embarrassed to share his ideas and ask their honest opinions.
The business knowledge gave him the confidence to start the business. He chose some valuable lessons from his research, tweaked them and integrated into his own business.
Johnson became remarkably successful in business & his prior business knowledge played an influential role in his achievement.
In the early 1930s, during the time of depression in America, an attorney by name Percy Spencer was appointed as a bankruptcy referee for the state of Colorado. He often took the help of his son David Packard for finishing part of his official work. So, at that time too, he requested Dave to help him in looking up the record of those companies that had gone bankrupt. That was a blessing for Dave.
Dave went through the records of hundreds of companies. The documents showed him why specific companies succeeded & others failed. The statements also revealed -How mortgages wrecked several companies? How few companies managed their loans well and ended up with the assets intact at the end of depression years? How successful companies avoided long-term debt? How some companies financed their growth primarily out of earnings rather than by borrowing money?.
Dave learned valuable lessons by studying the records of companies. This knowledge was one of the significant factors that helped him to build a sustainable brand called ‘HP’.
Jack Welch’s father worked as a train conductor. Every day, he came home with bundles of newspapers, magazines, and books which were left by his passengers. So, from the age of six, Jack Welch got into the habit of reading current events, sports and business magazines. Reading every night became a life-long addiction. He had been acquiring valuable knowledge from his childhood.
While studying a Masters in Business course, Phil Knight got an inspiration to start a business of selling athletic shoes. Unfortunately, he had no experience or prior business knowledge. So, he analyzed business case studies as much as possible during the course.
After graduating from college, he started his company ‘Blue Ribbon Inc.’ as he had planned earlier. Unfortunately, he struggled financially. To keep the company running, he needed funds. He felt that if he took a full-time job, he could sustain the company for some more time. So, he joined as an accountant in a small company called Lybrand, Ross Bros & Montgomery. Being a small firm, he found himself fully responsible for his clients. There was no one to guide him. He was forced to spend quality time with CEOs of his client companies as he had to get an in-depth understanding of their businesses. The study helped Phil to gain useful knowledge on business and leadership.
Later, Phil joined another accounting firm Pricewaterhouse, which had clients from startups to well-established giants. In that firm, Phil got a golden opportunity to audit big companies. It was a blessing. He learned valuable lessons on managing the business and people. He observed how those companies survived, how did they grow, how they sold items, how they built the internal culture, how did they get into a problem, how some of them got out of financial troubles. He took careful notes of essential details. He focussed more on the factors that lead to business failures.
At Pricewaterhouse, Phil became friendly with one of the senior accountants, Delbert J Hayes. He was passionate about numbers and a well-experienced professional. Every other employee avoided Hayes due to his drinking habit. However, Phil spent hours with him. Hayes shared the success & failure stories of his business clients. Every story contained an essential lesson.
All those business and management lessons helped Phil Knight to build the Nike business empire.
A leader who is hungry for learning not only acquires knowledge but gathers additional benefits.
- He or she becomes open-minded
- He or she improves their listening skills
- He or she comes to discussions without any specific agenda or outcome in mind
- He or she patiently listens to new ideas and approaches without judging them beforehand
- He or she is ready to change his or her opinions when they encounter a contrary fact. (An essential leadership trait to build a sustainable business).
- He or she will inspire his or her subordinates to gather knowledge.
ENCOURAGING FOLLOWERS TO LEARN
A leader alone could not build a business. He needs the support of his people. So, he has to encourage them to continue learning.
Jack Welch desired to stimulate continuous learning among his employees. He thought that one of the ways to encourage them was to set up a world-class learning center. GE already had a training center at Crotonville, a 52-acre campus in Ossining, New York. Unfortunately, GE employees seldom used the training center. Even Jack Welch never visited the facility. He disliked the accommodation and courses offered there.
Jack sensed that he could use GE’s existing facility to establish a world-class learning center. He decided to reinvigorate the facility. He put a crew to transform the infrastructure and make it luxurious. Jack hired well-experienced faculties. He then assigned a former Harvard professor to modernize the content to develop leadership potential in employees.
Jack’s team introduced the Executive Development Course for the highest potential managers, Business Management Course for mid-level managers and Management Development Course for fast-trackers early in their careers. They added GE case studies to the curriculum. They included stringent criteria for the selection of candidates for the course. Only passionate and best people were allowed. Learners were encouraged to work on solving real business issues.
Jack’s effort of teaching employees at Crotonville gave GE several benefits.
- Crotonville created efficient leaders who led people rather than controlling them, leaders who coached followers rather than preaching them.
- Classes built cross-business friendships among the employees that lasted a lifetime. The leaders found it easy to get support from cross-functional teams.
- As the leaders interacted with people from other divisions, they understood the strengths and weaknesses of every GE’s division. They began to leverage each business’s strength.
- After a while, GE’s leaders began to teach business and management classes. Within a few years, GE leaders constituted 85% of faculty. Teaching helped them to deepen their learning as they acquired new knowledge from the varied experiences of students.
- Customers began to express interest in GE’s leadership development program & they started attending the classes. Customer loyalty improved dramatically.
- The classroom broke all the hierarchy levels. It encouraged open discussion -People were not afraid to express their opinions and ideas. This practice slowly spread inside the company.
Empowering an employee with knowledge was one of the influential elements behind GE’s transformation under Jack Welch.
The above content is part of the following book -
References: Jack-Straight From the Gut by Jack Welch, Shoe Dog by Phil Knight, The HP Way by Dave Packard.