|
Jewish World Review Sept. 22, 2000 / 21 Elul, 5760
Philip Terzian
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 Amazon.com 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 dot.com 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
09/20/00: They've got a secret
|