If General Electric’s more than 100-year run on the Dow Jones Industrial Average is anything to go by, then the title of Manager of the Century is befitting astute businessman Jack Welch, who died on Sunday. He was 84.
Known primarily for his successful relentless business pursuits, Welch, in his two decades at the helm of General Electric had grown the organization’s net worth from $14 billion to an estimated stock market-value of $400 billion, in 2001 when he stepped down.
Along the way, he made General Electric the most valuable organization in the world through his innovative and aggressive expansion into finance, power, aviation, healthcare and renewable energy, the latter still doing relatively well today. Welch took advantage of the 1980s economic boom that followed the recession, venturing into finance with the creation of General Electric Capital. The return on investment was colossal and served as the catalyst for his expansion into other fields. This earned him the title Manager of the Century by Fortune in 1999.
In one of his many famous quotes, Welch warned that an organization’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage. It was his learning along the way and blunt opposition to bureaucracy that allowed him to continuously trim what he deemed vulnerable businesses in General Electric and reinvest in more valuable ventures. This was evident in his attempts to compete with Asia’s rise in manufacturing in the 80s and 90s, while still diversifying the General Electric to include acquiring RCA, which owned NBC Television, in 1985.
It wasn’t always a great day for this master CEO. Having cut some 100,000 staff members from General Electric in his 20-year run as head, Welch, has received his fair share of criticism. His business model was a stark contrast to other fortune 500 companies, which had a lot of middle managers and large departments. His critics were, however, most vocal about his replacement and how the 2008 financial crisis was handled. It was at this turn of the decade that things really started to go downhill for General Electric, which was compounded by the fact that the organization had too diverse a portfolio, and a large portion of it was in finance. In hindsight, Welch’s success has been linked to corporate greed and wealth inequality.
Outside of the boardroom, Welch also authored some bestsellers with his wife Suzy, notably Jack: Straight from the Gut, The Real-Life MBA: Your No-BS Guide to Winning the Game, Building a Team, and Growing Your Career, and Winning. Welch’s distinguished and enviably career as a businessman has taught many lessons in success. He was able to develop an already successful business fivefold by asking the hard questions and making the tough decisions. He led with agility and insight not seen before his time at General Electric and influenced the likes of powerful businessmen from Warren Buffet to President Donald Trump. His career also serves as a lesson that even the world’s most respected and successful businesses are not always guaranteed success on the free market.
—Article written by Kiwayne Jacobs