Clicking on banner ads enables JWR to constantly improve
Jewish World Review Sept. 22, 2000 / 21 Elul, 5760

Philip Terzian

JWR's Pundits
World Editorial
Cartoon Showcase

Mallard Fillmore

Michael Barone
Mona Charen
Linda Chavez
Ann Coulter
Greg Crosby
Larry Elder
Don Feder
Suzanne Fields
James Glassman
Paul Greenberg
Bob Greene
Betsy Hart
Nat Hentoff
David Horowitz
Marianne Jennings
Michael Kelly
Mort Kondracke
Ch. Krauthammer
Lawrence Kudlow
Dr. Laura
John Leo
David Limbaugh
Michelle Malkin
Jackie Mason
Michael Medved
Kathleen Parker
Wes Pruden
Debbie Schlussel
Sam Schulman
Amity Shlaes
Roger Simon
Tony Snow
Thomas Sowell
Cal Thomas
Jonathan S. Tobin
Ben Wattenberg
George Will
Bruce Williams
Walter Williams
Mort Zuckerman

Consumer Reports

Preparing for a new administration -- MOST AMERICANS are preparing themselves for a new administration, but I am not among them. For me, the transition that matters is not from Bill Clinton to Al Gore or George W. Bush; it is from Jack Welch to who-knows-what.

Welch, of course, has been chairman of General Electric for the past 20 years, and as business-section readers have known for the past few months, he retires from his post at the end of the year. This is not going to be easy: Life without Jack Welch at GE will be like the moon without the earth. Welch himself has said that running General Electric is the best job in the world, and everyone agrees that GE is "the most valuable company on the planet," perhaps in the universe.

In 1990 GE was valued at $50 billion; today it is worth about $560 billion -- an elevenfold increase. Earnings growth has been steadily spectacular; capitalization is literally through the roof; GE's price/earnings ratio has tripled in the past five years. As Gary Hamel points out in The Wall Street Journal, "At the end of 1999, the Standard & Poor's 500 included 326 companies that had been in the index for the entire decade. Fifty-five of these companies, among them GE, managed to deliver top quartile shareholder returns in as many as four years out of the previous 10. GE's top quartile results came in 1996, 1997, 1998 and 1999."

Who can top that? Nobody I know. Others may may have huddled in their basements and stored bottled water awaiting the millennium; for me, the deluge comes after Jack Welch.

For that reason I have e-mailed to order an advance copy of his long-awaited memoir and guidebook on management, for which he got an $8 million advance from his publisher.

And because I have attempted, during the past two ecades, to model my own personal economy on GE's, I have stockpiled everything about Welch I could find. As I write, I am examining my well-thumbed editions of Jack Welch and the GE Way: Management Insights and Leadership Secrets of the Legendary CEO by Robert Slater, The GE Way Fieldbook: Jack Welch's Battle Plan for Corporate Revolution by Robert Slater, Get Better or Get Beaten! 31 Leadership Secrets from GE's Jack Welch by Robert Slater, and The New GE: How Jack Welch Revived an American Institution, also by Robert Slater.

My library boasts well-thumbed editions of Business the Jack Welch Way: 10 Secrets of the World's Greatest Turnaround King by Stuart Crainer and Des Pearlove, Jack Welch Speaks: Wisdom from the World's Greatest Business Leader, edited by Janet C. Lowe, and Control Your Destiny or Someone Else Will: Lessons in Mastering Change from the Principles Jack Welch is Using to Revolutionize GE by Noel M. Tichy and Stratford Sherman. Needless to say, I am on the waiting list for the forthcoming Jack Welch by Robert Heller.

At home, it's the Jack Welch/GE philosophy all the way. I have sought to multiply efficiency by capitalizing assets and throwing non-performing subsidiaries overboard. Two summers ago I traded in my 1986 Nissan Stanza Wagon for a Honda Civic Hatchback -- less space, better mileage -- and have attempted to downsize through dieting and exercise.

Sound management, as Jack Welch teaches, often means knowing when it's time to let go. My 15-year-old son is anxious to be spun off to manage his own start-up, but whether it's Princeton or the local community college depends on his capacity to control the bottom line. My daughter, now nine, is utilizing e-commerce (and accumulating debt) in ways that will pay off in the long run -- or so my friends tell me. And while my wife has always had a gift for cost-cutting and fiscal management, he shows an unexpected mastery of sound strategic planning. We are currently looking at our four-year-old beagle, and trying to determine where she fits in our budgetary plans, or even if she makes the efficiency grade.

One thing Jack Welch taught me is the fundamental, overwhelming, all-encompassing importance of shareholder value. I have made it clear to our management team and juvenile subsidiaries that survival depends on their price in the market, and price is directly connected to performance. This applies to everything from allocating funds for capital improvement to clearing the dining room table. It has made for some uncomfortable moments in family life, but on the whole, it has given us a sense of what it must be like to work at GE, and toil for the planet's most valuable company.

But now, with the chairman on his way out, what are we to do? My WWJD bracelet -- What Would Jack Do? -- has gotten us this far; but without a proper business plan, or quarterly review, how can one family adapt to changing markets?

JWR contributor Philip Terzian is associate editor of The Providence Journal. Comment by clicking here.


09/20/00: They've got a secret
09/18/00: Today, Dr. Laura. Tomorrow ...
09/12/00: What passes for knowledge
09/05/00: The catcher gets caught
08/31/00: A Golden Age that never was
08/28/00: Blame communism, not Russia
08/24/00: Social progress on one front, regression on the other
08/21/00: The beat goes awry
08/17/00: The unwelcome democrat

© 2000, Philip Terzian