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Model Management: General Electric - an executive carol
Last week, the FTDynamo team looked at the legacy of GE's departing chief, Jack Welch - and suggested he'd left his successor a poisoned chalice. In their latest contribution to silicon.com, they look at the specific challenges facing that successor - Jeffrey R Immelt.

By FTDynamo FTDynamo

Published: Tuesday 19 December 2000

Soon, very soon, Jeffrey R Immelt will be visited by three ghosts. The successor to General Electric's CEO Jack Welch, Immelt, 44, is now GE's chairman-elect and president and, decidedly, the hand-picked choice of Welch to assume the top spot.

Right after the announcement, one newspaper beamed that Immelt had "won the biggest contest in corporate America" by becoming the ninth chairman in the 122-year history of GE.

A recent news magazine said Immelt's pick was "the most eagerly awaited executive decision since the scrapping of New Coke," perhaps because it's a decision that will affect those worldwide stockholders who are heavily invested in one of the 10 largest global corporations, with $10.7bn in net income in 1999.

Yet, what Immelt will soon find is that, like anyone tapped to fill the wing tips of a successful boss, ghosts accompany all the verbal bouquets. Three ghosts, to be exact.

The ghost of executives past

Once a worthy successor has been identified, it's normal for people inside and outside any company to compare and contrast just about everything a new top manager does. It's more than matching past numeric milestones. People will be watching, watching, watching. Is Immelt as imaginative as Welch? As bright? As insightful? As prescient? As savvy? As stylish? As clever?

Sure, the ascending executive can brush off a lot of comparative chatter but then, just before a big management meeting, he'll glimpse a GE manager poring over a magazine interview with Welch - the one with the boldface type stating that Welch turned "a sluggish behemoth into America's most valuable company." At that point, Immelt will inhale and realise yet again that he's in part racing against a retired competitor - someone who's technically not even in GE's current managerial race but whose presence looms.

The ghost of executives present

In time, however, Welch's portrait may be gathering dust somewhere in General Electric's headquarters, and Immelt will be calling the strategic shots. More importantly, he'll be deciding who's who in the management hierarchy (and who'll be staying there). No matter what his own strengths and weaknesses are and how they compare to Welch's, Immelt will be deferred to -- and how. The full brunt of uniting an enterprise that makes refrigerators and loans, jet engines and medical equipment, will fall to him, alone, now. A present-tense ghost will be pressing on Immelt's chest daily.

Can he keep GE performing consistently? Can he reassure customers and analysts during the inescapable crises which occur on his watch? Can he pattern his swirl of impressions and ideas into a coherent vision that unites workers, managers, and investors into a corporate army willing to take on any market foe?

The ghost of executives future

One might think, at 44, Immelt would have a decade or two to basically sleep on who's going to take his place when he ultimately retires. And, that might be true. If GE's board is awake, they'll recognise that any executive dynamo is mortal and that key-man insurance starts with having lots of key men available for any eventuality. Then again, GE will have to keep growing. If it doesn't, Immelt will be dismissed as someone handcuffed to the present - one who can perhaps repeat what Welch achieved but not leverage it. Thus, as GE grows, Immelt will have to assemble an executive bench that is both wide and deep.

Already, business publications are warning that top execs at GE (starting with the "Welch wannabes" who didn't get the number one job) "won't stay at GE much longer," that they'll be lured away by "pay packages that ... will probably dwarf" their present compensation packages. Immelt won't be able to grow GE into the future without talent and all-star talent won't come (nor stay) unless they can be part of a company that's growing exponentially.

Thus, Immelt will find that a good part of his job is learning how to fret about what GE is not but should be. He's going to have to do some top-team guided imagery exercises that promise to yield big numbers with at least nine zeros stitched by commas. Immelt will have to confront a ghost who relentlessly chants, "What's coming?" as if managing GE safely into the future is Jeffrey Immelt's main job.

Otherwise, Immelt will be haunted forever by the ghost of failure.