Jack Welch, for two decades head of General Electric, was one of America’s best-known chief executive officers ever. When he retired, in 2001, he was anointed by Fortune magazine, the “Manager of the Century,” which, given his reputation at the time, was a plausible plaudit. For the twenty years during which Welch reigned were a time of seemingly unbounded success for the company into which he poured his extravagant energies.
But whatever his triumphs during his tenure at the top, once it was over, it was game over. Few great companies anywhere in the world have fallen so far so fast as did General Electric in the two decades after Welch’s departure. In a soaring market its stock price is a fraction of what it was. The company has been kicked out of the Dow. Its current assets are puny compared to its former assets. And its failed leadership cadre has been an unarticulated rebuke to the man who invented, or at least popularized, routinized in-house corporate leadership trainings.
Welch’s obituaries took note of his different levels of skill as they applied to two different skill sets. Skill set number one was successfully to lead a large organization in the present. Skill set number two was successfully to lead a large organization into the future – to leave a strong legacy by smart succession planning. Welch did wonderfully well at the first. He failed badly at the second.
The Financial Times noted that “Welch’s departure as chief executive marked the high point of his – and arguably GE’s – reputation.” The New York Times’s obituary cited James Stewart, who commented a few years ago that, “hardly anyone considers Mr. Welch a role model anymore.” And the Wall Street Journal concluded that GE’s troubles during the decades after his exit “raised questions about Mr. Welch’s management methods.” Again, each of these obituaries paid their respects, citing Welch’s accomplishments. But, at the same time, each made clear that though he had been tagged manager of the twentieth century, by the second decade of the twenty-first century his previously stellar reputation was visibly tarnished.
For students of leadership the trajectory of Jack Welch career raises important questions. These include:
- What were the traits and behaviors that allowed him for so long so spectacularly to succeed?
- Why did these same traits and behaviors lead him astray when they involved his own succession planning?
- Exactly why did his team serve him outstandingly well for twenty years – but then badly let down not just him but his company?
- How did GE’s corporate culture – a culture that Welch created – contribute to GE’s steep descent?
- What was it about the context within which GE itself was embedded that contributed to its success for two decades – and then for the next two decades contributed to its decline?
Exceptional is the leader for all seasons. Whatever Welch’s strengths, turned out he was not exceptional. As a leader he was the rule – excellent at executing some tasks in some situations but far from excellent at executing other tasks in other situations.