The Welch Way
The CEO gives his thoughts on the global economy, the Internet and GE’s future.
August 30, 2000
Probably no corporate executive has received more attention — good and bad — than General Electric’s Jack Welch. A year before he is set to retire, Mr. Welch received a record $7.1 million advance for a book he will write about his tenure at GE. With our new “Read My Lips” feature, you don’t have to wait for the book.
Jack, what is your assessment of global economic conditions?
“Asia’s come back, Europe’s come back — and the United States is like I’ve never seen it.”
(Jack Welch, March 2000)
How did the relationship between inflation and deflation change?
“Inflation has yielded to deflation as the shaping economic force.”
Who then is still worried about inflation?
“The only people expecting higher inflation are those who have a position in gold.”
Could you envisage five years ago that the U.S. economic boom would still be going strong in 2000?
“The 1980s will seem like a walk in the park when compared to the global challenges of the 1990s, where annual productivity increases of 6% may not be enough. A combination of software, brains, and running harder will be needed to bring that percentage up to 8% or 9%.”
How do you justify the painful restructuring and downsizing you put GE through?
“Strong managers who make tough decisions to cut jobs provide the only true job security in today’s world. Weak managers are the problem. Weak managers destroy jobs.”
How do you see the future?
“The world is changing. People in the US and Europe aren’t going to live the way they do 100 years from now unless they do a lot of things differently.”
But was downsizing GE’s workforce and product lines the only secret of your success?
“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.”
What characteristics distinguish you and your top lieutenants from other companies’ managers?
“We bring together the best ideas — turning the meetings of our top managers into intellectual orgies.”
How do you choose new employees?
“Do we have the right gene pool? Do people who join big companies want to break glass?”
Why is motivating employees so crucial?
“Giving people self-confidence is by far the most important thing that I can do. Because then they will act.”
Beyond your expected retirement in 2001, where do you see GE going in the future?
“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.”
Have you heard some of the things they’re saying about you?
“Three acquisitions? Just another day in the life of GE.”
(U.S. stock market analyst, September 1997)
Who was a bit more critical?
“With all due respect to Jack Welch, I don’t want to go into history as ‘Neutron Heinrich.'”
(Siemens CEO Heinrich von Pierer, February 2000)