Jack Welch: An Oral History

Since he retired as chief executive of General Electric in 2001, after two decades in the job, Jack Welch’s legacy has been the subject of heated debate. Under Welch, the company’s market value grew from $14 billion to $410 billion, and revenue multiplied fivefold to $130 billion. Yet his brutal management style was legendary. Each year he famously ranked employees and fired the bottom 10 percent. As retirement neared, he pitted three top executives against each other in a bake-off to determine who would be his successor. “You got to be rigorous in your appraisal system,” Welch told Diane Brady in an interview for this story. “The biggest cowards are managers who don’t let people know where they stand.” Brady talks with GE veterans—including Jim McNerney and Bob Nardelli, who lost out to Jeff Immelt in the race to succeed Welch—about what it was like to work for “Neutron Jack.”

Jim McNerney
CEO, Boeing
Can you talk about one experience with Welch that stands out?
In the early ’90s, we were all very frustrated about how we were doing in Asia—particularly Jack. There were 10 of us who were leading the businesses at GE at the time. One of my vivid memories was Jack at one of our staff meetings. He was, shall we say, encouraging us to do better: “And if you guys don’t, I’m going to do something you all won’t like, ’cause I’ve got to have progress in Asia.” So I just salted that away. I thought it was another Jack mandate. I knew it would have implications, but none of us thought too much about it. Anyway, the next morning, I get a call from Jack saying, “Jim, come see me.” I show up in his office, and he says, “OK, I want you to go to Asia. We’re going to create a position. Somebody has got to get this company into Asia.” I said, “Well, what do you want me to do?” And he says, “You figure it out. That’s why I’m sending you there.” I found that incredibly motivational.