Wednesday, March 5, 2003

Who knows Jack?

Great article in Slate identifying the failures of some of Jack Welch’s protogés. Moneybox editor Daniel Gross looks at Jeffrey Immelt at GE, Gary Wendt at Conseco, Paolo Fresco at Fiat, Robert Nardelli at Home Depot – and concludes that they haven’t exactly lit the world on fire.

More successful examples: Stephen Bennett has been successful at Intuit, and James McNerney has done well at 3M.


What to conclude? We shouldn’t lay the failures of the disciples directly at the feet of Welch. Yes, some of Welch’s core insights now seem somewhat dated. It doesn’t take a genius to know that energetic leadership, high standards, and rigor can improve any company. But Welch didn’t intend for his protégés simply to replicate GE in retailing or insurance. Blame the unimaginative CEOs themselves for not being more creative. They have been playing mediocre covers of Jack’s greatest hits. What GE needed is not necessarily what the companies the disciples took over needed. Plainly, Fresco’s efforts to emulate Welch’s ideas failed in the case of Fiat, and a hard-core Six Sigma practitioner may not be useful for Home Depot.

A judgment on the success of the former GE hands shouldn’t be made simply on how faithful they were to the Gospel According to Jack. Instead, it should be based on how judiciously they apply Welch’s lessons to their particular situations and how well they develop their own strategies. The test is not how well they can manage like Jack, but how well they can manage like themselves.

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