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Could Jack Welch run a Board House?

Could Jack Welsh run a board house? Think about it for a second.

A while back, a friend and I were talking about how IBM trains its fast-track executives. He was telling me about how intensive the training is, how the company moves them around the country and teaches them the IBM way.

Of course, the same thing happens at every big company. Companies like GE, Honeywell, Intel and Motorola do the same thing; they all train their future executives the best they can so they will be fully prepared to take a high-level management role in their companies. And I assume they are doing a good job of it…I assume.

But my friend and I came up with better training. Instead of learning how to walk the political tightrope of their particular corporation, they should come over to our world and take over a small board shop. Say a five to ten million dollar company. Now that would be a test. That would be a true challenge, would it not?

As part of the test, the future executives would be completely on their own. They would not be allowed to rely on anything, and I mean anything, from their parent company. They couldn’t use their friends, their managers or teachers, and most importantly, they could not get their company to send business into the board shop. They would only be able to play the same cards as every shop owner and manager. Oh yes, they could use what’s in their heads…what they’ve learned so far, if that would be of any help, which I doubt.

So, this is the question, how do you think they would do? They are being trained to run huge corporations, so running a little five million dollar shop should be no problem, right?

You know what? I don’t think they could do it. I think they would have a very hard time dealing with all of the challenges that we in the board business face. First of all, they would have to face their own people. They would have to work directly with the real people – you know, the ones who make things happen. Then they would have to deal with cash flow. That’s right. For the first time they will know just how much it costs to hire that admin to handle their appointments and get their coffee.

For the first time in their careers they will have to work for a company that has to pay its bills on time, unlike his company where if you don’t want to pay your bills in 30 days, it’s no problem. You just send out a letter unilaterally announcing that you’ll be paying your bills whenever you want, whether or not their vendors like it: 60 days, 90 days or even 120 days.

In our industry, if we don’t pay our bills on time we won’t be able to get the products we need to build our boards. How would they deal with that?

How about other things they have learned to take for granted, things like environmental requirements and other government regulations? How about lawsuits? There are no corporate lawyers on staff at a board house.

Just think of everything that a board shop owner has to contend with every single day, either on his own or with a very small staff. And if these managers-in-training do not perform? Well, if they own the company, it will go out of business and they will be out of a job. That’s it, no more money. No golden parachute.

As has been seen many times, once a person has a job at the top of GE or Honeywell, there isn’t much they can do to get fired, not to mention the fact that they are set up for life in any case, no matter what kind of job they did. Look at what an incompetent like Carly Fiorina was paid to leave HP. There is no real downside to being a CEO of one of these large companies, no real living-on-the-edge type of existence like every single person who owns a shop has to deal with.

We all know that most of the new companies in this country are small businesses. We all know that the majority of companies in this country are small, especially when compared to the behemoths we have been talking about, but in the end I’ll put up a successful small business owner against a CEO of a large corporation any day.

No, I don’t think Jack Welch could run a board shop.

It’s only common sense.To contact Dan, click here.