Jack Welch’s Legacy
After 20 years at the helm of General Electric, Jack Welch looks back on his time with the company.
September 6, 2001
In his 20 years at the helm of General Electric (GE), Jack Welch made sure that the world’s biggest company stayed on top. Both in 1999 and 2000, Forbes pronounced GE “the most admired company.” The Financial Times followed suit in 2000. What did Jack Welch — the youngest person to ever be appointed GE’s chairman — have that others lacked? Our new Read My Lips takes a look back.
How many companies have you worked for in your life?
Jack Welch was with GE 41 years, half of them spent as chairman and chief executive.
(Wall Street Journal)
Outside the business realm, where else does GE stand out?
Following Jack Welch’s retirement on September 7, 2001, General Electric had only its ninth CEO in the 125-year history. This is just one more than Popes have been sitting in the Vatican since 1875.
What makes GE great?
“We have a company where people are free to dream and encouraged to act — and to take risks. In a culture where people act this way, every day ‘big’ will never mean slow.”
How did GE get where it stands now?
“Learning to love change is an unnatural act in any century-old institution, but today we have company that does just that — it is the oxygen of our growth.”
What does that mean for the investors?
A $10,000 investment in General Electric in March 1981 — the beginning of the tenure of Jack Welch — would have been worth $640,000 in late 1999.
What’s the biggest job of a CEO?
“Giving people self-confidence is by far the most important thing that I can do. Because then they will act.”
How much did GE learn to love change?
In the 17 years that Jack Welch served as CEO of General Electric, the company has embraced a new corporate strategy initiative about once every three years.
Where did Jack Welch look out for new staff?
“The whole world’s intellect and best ideas are ours because we are ‘boundaryless’.”
How do these talents work at GE?
“We bring together the best ideas — turning the meetings of our top managers into intellectual orgies.”
How does he think about selecting employees?
“Do we have the right gene pool? Do people who join big companies want to break glass?”
Where else might Jack Welch have gotten some help?
“We’re pounding ourselves on the chest in America over how wonderfully we’ve done. Yes, we did restructure — but we got a huge help from the currency.”
Mr. Welch, what was one of the biggest challenges in the transition to the new economy?
“There is no such thing as an ‘old economy’ and a ‘new economy’. Commerce is the same as it was 500 years ago. People sell and people buy — whether it is from a wagon or the Internet.”
How easy was it for Jack Welch to adapt to the Internet economy?
“I was afraid of it, because I couldn’t type.”
How big was Jack Welch’s appetite for new companies?
During his tenure as CEO of General Electric, GE acquired and integrated around 1,700 other companies.
(Wall Street Journal)
Just how big has GE become?
“We don’t connect with everyone, but the point is, our size allows us to miss a few — without missing a beat.”
What was Jack Welch’s China strategy?
“If GE’s strategy of investment in China is wrong, it represents a loss of a billion dollars, perhaps a couple of billion dollars. If it is right, it is the future of this company for the next century.”
Was he the chief architect of corporate downsizing?
“Removing marginal performers early in their careers is doing the right thing for them — leaving them in place to settle into a career that will inevitably be terminated is not.”
Could Jack Welch be a model for other CEOs in other countries?
“There is no Jack Welch in Corporate Japan. Even if there were, he probably wouldn’t go down well.”
(Warburg Dillon Read analyst, on the shortage of decisive executives in Japan’s large corporations, March 1999)
What was Jack Welch’s initial reaction after the EU vetoed the merger with Honeywell?
“You are never too old to get surprised.”
What was his later evaluation of the failed merger?
“I haven’t covered myself in glory on this deal.”
One word of advice for his successor?
“Leaders today must be equally comfortable making a sales call or sitting in a boardroom — informality is an operating philosophy as well as a cultural characteristic.”
How are Jeffrey Immelt’s chances to do as well as Jack Welch did?
“The guy is destined, if not doomed, to a life of insignificance or insecurity.”
(Former American Motors Chairman Gerald C. Meyers, on the challenges for the successor of GE CEO John Welch, December 2000)
What’s next? Is Mr. Welch going to Washington?
“We cultivate the hatred of bureaucracy in our company — and never for a moment hesitate to use that awful word ‘hate’. Bureaucrats must ridiculed and removed.”