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look the numbers. G.E. has had only eight top executives in its history Of the eight, Welch is at the head of the class in creating shareholder value. But in other effrey Immelt faces one of the tough- key categories-earnings growth, return est challenges in business history. As on equity, sales growth-hes closer to the new C.E.O. of General Electric, Im- the middle of the pack. Yes, Welch faced down the challenge melt must follow in the footsteps of a man who was perhaps the most respected of running G.E. at a time of increased top executive of his time-a man who global competition and rapid technoreinvented G.E. and fashioned a new logical change. But Charles Coffin kept management structure that became the G.E. afloat during one of the worst demodel for firms around the world. He de- pressions in American history (which folveloped a host of new products, invested lowed the panic of 1893). He essentially heavily in groundbreaking research, and created the countrys electricity infrastrucsent the companys revenues and profits ture and outmaneuvered a competitor, soaring. This act, you don't want to follow. Westinghouse, whose technology was suI refer, of course, to Ralph Cordiner, perior early on. Gerard Swope and Owen the G.E. head in the postwar years. No, make that Charles Coffin, the companys co-founder. I could have in mind Gerard Swope, who steered G.E. through the Jazz Age and the Great Depression. Or I could be talking about Jack Welch, who a few weeks ago named Immelt as his successor. The truth is that the above description would suit any of these former G.E. chiefs. In the past few years, weve grown accustomed to the idea that Jack Welch is the ber-C.E.O., the god who single-handedly catapulted G.E. to world dominance. He is the business worlds ultimate wiseman-heartthrob, part Yoda, part Ricky Martin. His speeches are mined for aphorisms that take on the shine of Scripture, in books like Jack Welch Speaks. But this notion of Welch as superhero-an idea for which Welch is not, Young reinvented G.E. as a consumerby the way responsible-pales when you goods powerhouse, then had to find a look at the performance of his predeces- way to make money during the Great sors. By G.E. standards, what Welch has Depression. Ralph Cordiner made G.E. done is par for the course. As Jim Col- a space-age giant and masterminded its lins, the co-author of the business classic widely imitated decentralization. Built to Last, told me, Most of Welchs Its no coincidence that G.E. has had predecessors were the Jack Welches of one exceptional boss after another. Theres their time. something about the company that makes Clearly, G.E.s performance under its C.E.0.s so good. That something inWelch has been extraordinary But G.E.s cludes its manufacturing acumen and its history is made up of perworldwide extraordinary distribution networks, as well formances. The company is the only sur- as its uncanny knack for turning techviving original member of the Dow nological innovations into products that Jones Industrial Average. In the twen- sell. Above all, G.E. has been adept at tieth century, G.E. was the industrial producing excellent managers throughequivalent of the mid-century New York out the organization. The companys Yankees-regardless of who ran the Management Development Institute has team, it just kept on winning. Take a been called the Harvard of corporate
THE FINANCIAL PAGE JACK WELCH, AVERAGE GUY
America, and G.E. has always invested an unusual amount of money and time in training its managers. Thats why so many G.E. alumni are running other companies-and why last ,week, two of the top contenders for Welchs throne were hired to head Home Depot and 3M. G.E.s C.E.O. doesnt have to govern alone. He can rely on topnotch executives-a Praetorian guard, as some have put it-to make sure things go right. The Welch hype not only obscures just how extraordinary G.E. has been; it also runs counter to Welchs own idea of what a C.E.O. should be, as reflected in the Welchism Managing better means managing less. Welch has long insisted that, as he said last April, the idea that one person could run a hundred-andtwenty-billion-dollar company thats in as many different businesses as were in is outrageous on its face. It seems that the only time folks dont listen when Jack Welch speaks is when he tries to explain that hes not Superman. Thats because Welchs tenure has coincided with the transformation of C.E.0.s from buttoned-down bureaucrats into cultural cel...