Talent

GE's Welch an Ambivalent Kingmaker

Dec. 21, 2004

His protgs must leave to reach their full potential.

For nearly 17 years, Chairman and CEO John F. (Jack) Welch Jr. has redefined--arguably revolutionized--the way General Electric Co. does business. He's infused GE--and the modern management lexicon--with such terms as "stretch goals" and "boundaryless behavior." He's insisted that businesses not No. 1 or No. 2 in global markets be fixed, sold, or closed. But equally significant is the fact that six U.S. executives who once worked for Welch are now putting their considerable talents to work at their own multibillion-dollar companies. Norman P. Blake Jr. is CEO of USF&G, a Baltimore-based insurance holding company. Glen H. Hiner is chairman and CEO of Owens Corning in Toledo, Ohio. Michael D. Lockhart is chairman and CEO of General Signal Corp., Stamford, Conn. John Trani is chairman and CEO of The Stanley Works, a New Britain, Conn. tool and hardware company. Harry Stonecipher is president and CEO of McDonnell Douglas Corp., St. Louis. And Lawrence A. Bossidy is chairman and CEO of AlliedSignal Corp., Morristown, N.J. Call them Jack's men; but don't call them that to their faces. As much as they admire, respect, and even have affection for their former boss, they do not belong to him. They are their own people. Blake confesses: "I wanted to know, for myself, how good I was. And I felt, in a way, I would never fully answer that question when I was a part of GE." Hiner, about the same age as Welch, also knew that to be a CEO he would have to go outside GE. No other major U.S. company can claim GE's level of chief-executive development; indeed probably no other major company anywhere in the world can. Credit Welch--for aggressively identifying and developing leaders. And credit GE for fostering a culture of management excellence that predates Welch. But ask yourself if GE is less dynamic today because such powerful, determined, decisive executives as Blake, Hiner, Lockhart, Trani, Stonecipher, and Bossidy aren't there. Look at your own company. Ask yourself whether the truly talented (and ambitious) leaders are in effect forced to go elsewhere to realize their full potential (and ambitions). Is this a cost your company--or any company that's really good at what it does--must be prepared to pay? Is this, indeed, a cost that every company must pay? It may not be. In such impressive European companies as Swiss-based Nestl SA and ABB Asea Brown Boveri Ltd. many talented senior executives stay, notes Peter Lorange, president of the International Institute for Management Development, Lausanne, Switzerland. And the reason is there's room for the talented and the ambitious on strong, multi-person management boards. These executives are not bumping their heads on a professional ceiling. Lorange acknowledges that management boards--like almost any committee--can breed bureaucracy. And it's difficult to imagine that prospect appealing to Welch, the person who delayered GE with a vengeance and has put a premium on speed and simplicity--faster decision-making, more effective communication, and designs that get to market sooner. But must boards be bureaucratic--particularly if they were composed of people like Blake, Hiner, Lockhart, Trani, Stonecipher, and Bossidy? Lorange just may be right when he asserts that executive-management committees not only provide their companies with a deep pool of talent but also a lot of energy. And by creating multi-person offices of the chief executive and senior management councils, such companies as GE and AlliedSignal seem to be tapping talent and generating energy. But in these firms--and others--there's still a chief executive officer, a person to whom some set of powers is uniquely reserved. And it seems unlikely--at least in the U.S.--that people of determination and possessed with decidedly healthy egos will be content to be one among a powerful few when there's an opportunity to be a CEO who's more "equal" than the company's other senior executives.

About the Author

John McClenahen | Former Senior Editor, IndustryWeek

John S. McClenahen, is an occasional essayist on the Web site of IndustryWeek, the executive management publication from which he retired in 2006. He began his journalism career as a broadcast journalist at Westinghouse Broadcasting’s KYW in Cleveland, Ohio. In May 1967, he joined Penton Media Inc. in Cleveland and in September 1967 was transferred to Washington, DC, the base from which for nearly 40 years he wrote primarily about national and international economics and politics, and corporate social responsibility.

      McClenahen, a native of Ohio now residing in Maryland, is an award-winning writer and photographer. He is the author of three books of poetry, most recently An Unexpected Poet (2013), and several books of photographs, including Black, White, and Shades of Grey (2014). He also is the author of a children’s book, Henry at His Beach (2014).

      His photograph “Provincetown: Fog Rising 2004” was selected for the Smithsonian Institution’s 2011 juried exhibition Artists at Work and displayed in the S. Dillon Ripley Center at the Smithsonian Institution in Washington, D.C., from June until October 2011. Five of his photographs are in the collection of St. Lawrence University and displayed on campus in Canton, New York.

      John McClenahen’s essay “Incorporating America: Whitman in Context” was designated one of the five best works published in The Journal of Graduate Liberal Studies during the twelve-year editorship of R. Barry Leavis of Rollins College. John McClenahen’s several journalism prizes include the coveted Jesse H. Neal Award. He also is the author of the commemorative poem “Upon 50 Years,” celebrating the fiftieth anniversary of the founding of Wolfson College Cambridge, and appearing in “The Wolfson Review.”

      John McClenahen received a B.A. (English with a minor in government) from St. Lawrence University, an M.A., (English) from Western Reserve University, and a Master of Arts in Liberal Studies from Georgetown University, where he also pursued doctoral studies. At St. Lawrence University, he was elected to academic honor societies in English and government and to Omicron Delta Kappa, the University’s highest undergraduate honor. John McClenahen was a participant in the 32nd Annual Wharton Seminars for Journalists at the Wharton School at the University of Pennsylvania in Philadelphia. During the Easter Term of the 1986 academic year, John McClenahen was the first American to hold a prestigious Press Fellowship at Wolfson College, Cambridge, in the United Kingdom.

      John McClenahen has served on the Editorial Board of Confluence: The Journal of Graduate Liberal Studies and was co-founder and first editor of Liberal Studies at Georgetown. He has been a volunteer researcher on the William Steinway Diary Project at the Smithsonian Institution, Washington, D.C., and has been an assistant professorial lecturer at The George Washington University in Washington, D.C.