JACK WELCH – A PATH GOAL LEADER

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The path–goal theory is different from trait theory in that leaders are not constrained to a leadership style that depends on their personality.
It is also different from contingency theory in that leaders do not have to be matched to particular situations or the situation changed to match leader style.
The path–goal theory of leadership is similar to the situational and contingency theories of leadership in that it prescribes appropriate leadership styles for interacting with subordinates. However it is different from the situational and contingency theories in that path–goal theory adds more variables to what leaders need to consider in their relationships with employees.
In essence, the path–goal theory of leadership “is about how leaders facilitate subordinates to accomplish designated goals.”
All managers understand the importance of goal setting; yet, most organizations have no idea how to set challenging goals or “stretch goals” and to motivate employees to achieve the same.
For example, some organizations may ask employees to double sales or reduce product development time but fail to provide them with the knowledge they need to meet these goals or the resources required to succeed. This lack of guidance and direction often leads to stress, burnout, and in some instances, unethical behavior.
Although goal setting is practiced in organizations, mostly it is focused around achieving performance objectives. However for long term sustainability and peak performance of an organization performance goals and learning goals both should be set in tandem.

Goal setting by Jack Welch

Jack Welch, was former CEO of General Electrics for 20 years and known as one of the best business leaders of all time.
In 1981, Welch made it to the top becoming the companies 8th and youngest ever CEO.
He made GE one of the most profitable companies in the world. General Electric’s market value increased from $12 billion to an amazing $280 billion, which has made it one of the largest and most profitable businesses in the world.
Jack was focused on implementing both performance goals and learning goals at GE. He was looking for teachable moments and said that 70 percent of his job was developing people; Welch took a personal interest in using GE’s Crotonville facility to upgrade the level of management skills and to instill a common corporate culture.
Next, Jack put in place an assessment based on a “vitality curve,” and requested his managers to rank all their staff into the “top 20,” “the Vital 70” and the “bottom 10,” with the intent to force executives to differentiate their employees. The “top 20” were groomed for larger assignments, and the “bottom 10” were coached out of the organization. Welch reinforced the importance of the ranking system by matching it with an appropriate compensation structure. Top 20 players received raises that were two to three times the increases given to Vital 70 s, and also received a significant portion of the stock option grants.
Bottom 10 received no raises or options. He always used to say “An organization’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage.”

Learning goals
In situations where learning rather than an increase in performance is required in short term, setting a specific performance goal is not likely to be prudent.
Perhaps a specific high-learning goal should be set instead. For example, a novice golfer should consider setting a high learning goal such as learning how to hold a club or when to use a specific iron.
The novice golfer must learn how to play the game before becoming concerned with attaining a challenging performance outcome. This suggests that the increase in self-efficacy resulting from a learning goal occurs as a result of the discovery of appropriate strategies for task mastery. For complex tasks, setting goals based on one’s knowledge stimulates the development of task strategies to complete those tasks.

Performance-Outcome Goals
Trying to attain a specific performance goal places additional demands on people, so much so that they will not be able to devote the necessary cognitive resources in mastering the task. A performance-outcome goal often distracts attention from the discovery of task-relevant strategies. Hence providing required skills and knowledge before setting a performance outcome goal can be critically important. . For example, focusing on a score of 95 may prevent a novice golfer from focusing on mastering the swing and weight transfer, and using the proper clubs to shoot 95. Unwittingly, the golfer has diverted the cognitive resources necessary for understanding the task to a self-regulatory activity of shooting 95. The golfer has focused on scoring at the expense of acquiring the skills to become a better golfer.

Learning Goals Vs. Performance Goals
The distinction between performance and learning goals lies in the framing of the instructions given to employees and the “mindset.”
The respective instructions focus attention on two different domains- motivation versus ability. A performance goal, as the name implies, frames the instructions so that an employee’s focus is on task performance.
A learning goal frames the instructions in terms of knowledge or skill acquisition (e.g., discover three effective strategies to increase market share). Once an employee has the knowledge and skills necessary to perform the task, a specific performance goal should be set to direct attention to the exertion of effort and persistence required to achieve it. Therefore, both learning and performance goals are needed to be successful.

Goals can be different in the end
A high-performing workforce is a function of both high ability and motivation to face rapidly changing technologies, information overload, escalating competitive pressures, and a host of other challenges.
While the purpose of a learning goal is to stimulate one’s imagination, to engage in discovery, and to “think outside the box”, the purpose of a performance goal is to choose to exert effort and to persist in the attainment of a desired objective using the knowledge one already possesses.
When the strategy for an organization is already known and the ways to implement it have been deciphered, setting performance goals for an individual or team is appropriate. When an effective strategy requires innovation that has yet to emerge, specific high learning goals should be set.
Having a clear understanding on the importance of both learning goals and performance goals, Jack Welch - driving GE’s growth through talent development considered to be the “deepest bench of executive talent in U.S. business,” the result of two decades of investment in its management training programs.
(This is the 11th article of the leadership series. The writer Eng. Gamini Nanda Gunawardana B.Sc. Eng. (Hons.); M.B.A.; C.Eng.; F.I.E. (SL); M.C.S. (SL); M.I.D.P.M. (UK); F.I.A.P. (UK); M.B.C.S. (UK) is Management, HR, OD & ICT Consultant, Corporate Trainer Consultant – HRD- Goodhope Asia Holdings Ltd. He can be contacted via email : gamining@gmail.com and Skype : gamini7147)

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JACK WELCH – A PATH GOAL LEADER

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