Source: Financial Post

HOUSTON - Compaq Computer Corp., which Hewlett-Packard Co. is acquiring, won a five-year, US$95-million contract to provide services and computer hardware to General Electric Co.'s aircraft-engine business. Compaq's global-services division will provide operations management and services for desktop support.

Financial writer, Janet Lowe's latest book Welch: An American Icon provides some good insights into an individual touted as one of the most prolific advocates of organisational change - Jack Welch, the legendary chairman of General Electric (GE). Welch, corporate America's ultimate gladiator, hung up his armour on Sept 7. The 65-year-old had planned to step down in April this year, but deferred his retirement to oversee GE's US$41 billion acquisition of Honeywell International. However, antitrust doctrines created in the New World and shipped back to the Old have tripped up Welch. Even though the deal won speedy approval from American regulators last May, European Union antitrust regulators have unanimously blocked the purchase on the grounds that the combined company would control too much of the aviation products market. All said, this scuttled transaction is merely a small dent in the breastplate of perhaps the current era's most celebrated business executive. He is living proof of the power of one - that an individual can still stand out and make a difference even in a behemoth company such as GE. He has taken the company through radical steps of change and Lowe articulates what Welch does best by noting, " The sexiest thing in the world isn't sex or spirituality, political or military might. It is money, and Welch is a master at making money".

In his 20 years as GE's head honcho, Welch has guided the transition of the grand old dame of American companies from an Old Economy manufacturing company into a US$525 billion global conglomerate that is involved in everything from major household appliances to finance to high-tech medical scanners. He has ignited a movement based on cost reduction and enhanced efficiency that has spread like wildfire throughout the corporate world. He is larger than life; alphamale of the concrete jungle, fortune manager of the century and most widely admired, studied and imitated CEO of his time. Even the Rand Corporation, dedicated to research on national defence has suggested that the US Department of Defense should follow Welch's lead in restructuring the military series, especially as it relates to developing and using human talent. To understand the power and influence of Jack Welch, one must first comprehend the colossus that is GE and its economic reach. Considered a proxy of the American economy as a whole, GE has 12 divisions, nine of which are big enough to be included individually on the Fortune 500. Only 35 of the world's 191 nations have a gross domestic product higher than the new GE's revenues. The company is also one of the 10 largest companies in the Dow Jones' Global Titans Index, the 50-stock benchmark of the world's multinational companies. It is in a class with such ancient and influential Japanese conglomerates as Matsushita and Sumitomo, European corporations like Unilever and Nestle and deeply rooted American giants Du Pont and the Coca-Cola Company. As aptly put by The Wall Street Journal, it is "a company that uses its size to crush the upstarts, and its industry-transforming innovation to constantly surprise the old farts".

Most of all, Welch has created what is unique in a big company: informality. He has shown the potency of combining big company might with small company nimbleness by harnessing the strengths of bigness while ridding GE of big-company paralysis. He instructs his managers to remain flexible and "hate bureaucracy and all the nonsense that comes with it".

Rather than planning and controlling the operations of GE divisions from corporate headquarters, Welch sets performance targets and lets each business unit run itself, promoting employee empowerment and ownership of work whilst nurturing internal talent.

Welch describes the attributes he looks for in his leadership as the four Es of GE leadership - the personal Energy to welcome and deal with the speed of change, the ability to create an atmosphere that Energises others, the Edge to make difficult decisions and the ability to consistently Execute. Last year, Welch stunned the world by reeling in a US$7.1 million advance to write his memoirs. Only Senator and former first lady Hillary Clinton, husband Bill and Pope John Paul II have attracted higher advances. Whilst Lowe's book provides glimpses into Welch the American Business Icon, it gives no deep personal glimpses into Welch the Man. It will be interesting to see if the upcoming book remedies this gap or merely continue to extol his management achievements, serving more as The New York Times surmises, a "definitive text of modern American business practices". In any case, we can rest assured that it will not be the last we hear of Jack Welch.

Jack Welch: An American Icon By Janet Lowe Published by John Wiley & Sons Inc Choo Li-Hsian is a business consultant with a major consulting firm