Jack Welch and the “Buy-Make-Sell” sell for non-profits

I am again (!) reading Straight from the gut  by Jack Welch. With many contacts with present and former executives from GE what amazes me is that these variety of executives sing the same song as Jack Welch even ten years after Welch retired. And guess what – they have not really read Jack’s books- just imbibed the GE culture.Not that Jeff Immelt is not moving things forward- Immelt had the tough task of facing the great recession, after all -but quite simply – Jack Welch -gets it. Frankly this book sets out some fundamentals of business that you don’t really find in any one book or article. One fascinating concept  is the Jack Welch notion of Buy-Make-Sell a more “gutsy” depiction of the “input-process-output” model.

Every organization, profit or non-profit, ultimately is about buy-make-sell or input-process-output. If you “get” this simple idea straight – you’ll find that things start making sense. The buy or input side is the purchasing-supply chain end of the business and the sell is the marketing and selling piece at the other end of the business.The “make” or “process” is the value add piece which marketing folks keep emphasizing as the central reason and purpose of  any organization.

So how does this concept extend beyond the plastics,appliances,finance and aerospace business of companies like GE in the non-profit domain? Here are some examples from non profits with the make piece italicized:

  • Healthcare like hospitals : patients-treatment- “wellness” or the cured
  • Education like colleges: students-education-jobs
  • Professional associations : members-education and networking– more successful members
  • Religion like churches etc: seekers-sermons,confession,meditation  etc– salvation or at least peace!
  • Poverty alleviation volunteer organizations: poor/unemployed-skill addition or aid- survive and thrive

The “make” or “process” piece corresponds to the production function of the industrial factory. This central piece involves huge domain knowledge ( you can’t preach if you don’t know your particular scripture!) and as the knowledge economy escalates and globalizes this piece becomes more and more specialized. Just listen to  Bill Gates talk about the work the Melinda and Bill Gates foundation is doing and you’ll get a sense of how involved this “make” piece is today.

The point is that the buy and sell side for each organization calls for different skills that have some domain familiarity but are ultimately about “buy” and “sell” skills. Of the two Jack Welch should get much more credit for pointing out that the buy part is really important. More on that in another post. About StratoServe.

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