CEO Of The Decade

Formally, he's John F. Welch Jr., a 1960 Ph.D. in chemical engineering from the University of Illinois. But inside and outside Fairfield, Conn.-based General Electric Co. he's better known, respected, and feared as Jack Welch, the impatient, blunt, and driven chief executive who has crafted a high-performing, $100.5 billion conglomerate from 10 businesses ranging from aircraft engines, appliances, and broadcasting to capital services, lighting, and transportation systems. Welch's remarkable achievements make him IndustryWeek's CEO of the 1990s. "His ability to continually renew himself and to stay almost fanatically interested in a business issue or related topic" is first among Welch's greatest strengths, says Lawrence A. Bossidy, chairman and CEO of AlliedSignal Inc., Morristown, N.J., and a close friend of GE's CEO. Another distinguishing Welch quality, says Bossidy, is "his strong focus on people, which is constant, relentless, and effective." Similarly impressed with Welch's people focus is Ram Charan, a Dallas-based executive consultant. Welch has the special ability to identify, nurture, deploy, and stretch leaders, and "that is a service that goes beyond the shareholders of General Electric," says Charan. Bossidy, a former GE vice chairman, says the most important management quality he has learned from Welch is to confront and resolve issues quickly. "Jack is well adept at pinpointing the root of an issue and quickly bringing about resolution so the business can move forward." As a management innovator and implementer, says Jude T. Rich, chairman of Sibson & Co. Inc., Princeton, N.J., Welch compares favorably to Alfred P. Sloan Jr., the General Motors Corp. president and CEO from 1923 to 1946 who introduced detailed analysis, discipline, and decentralization to U.S. corporations. In addition to praising Welch for introducing Work-Out, a results-focused approach to problem-solving, and for legitimizing the management mantra of a business being No. 1 or No. 2 in its global markets, Rich applauds Welch for creating a business culture of speed, simplicity, and self-confidence at GE. "I've seen a fairly young management person interrupt a discussion and ask, 'Look, wouldn't it be simpler if we did this?' and all the very senior people in the room say to her, 'Yes, you're right. Let's go.'" Noel M. Tichy reads Welch somewhat differently, but no less enthusiastically. Welch, who constantly is reinventing a great organization, "really has turned the management paradigm that has dominated the latter half of the century upside down," asserts Tichy, a professor at the University of Michigan's Business School, Ann Arbor. Unlike Sloan's analytic-control approach and those business schools that focus on structure and strategy and regard people as a rounding error, Welch "is about ideas, about building a gene pool of diverse human capital and leaders, and being able to get synergy . . . through subtle orchestration of ideas and networks of people. He has been the only guy in the world to show that you can trade at a premium and run a diverse company. Every other conglomerate doesn't work," contends Tichy, a past director of GE's executive-education center in Croton-on-Hudson, N.Y. Yet among the many successes there have been a few missteps on Welch's watch. For example, GE's 1986 venture into the securities-brokerage business with the purchase of Kidder, Peabody & Co. proved to be a disaster, and Kidder was jettisoned in 1994. And because of Welch's relentless pursuit of performance, "I bet if you did a survey, you'd find that divorce rates at GE are higher than at most companies by a wide, wide margin," wagers one close-to-GE consultant. Nevertheless, Welch is "the standard against which the rest are [to be] compared -- not just for the decade, but for the whole century," judges Charan.