The Way of the King and the Way of Commerce: The Application of Imperial Strategy in Management

Author: Qiu Qingjian, Wu Lun / Country: Mainland China
Publisher:
Publish Date: 2006-01-01
Features: Making Welch the Successor In 1998, GE of the United States ranked 93 billion in annual profit and was listed among the World 500. The main creator of GE's glorious performance was Jack Welch, who had held the positions of Chairman and CEO of GE for 18 years. Welch was undoubtedly a talented horse. It is great to have a talented horse achieve great deeds, but without a horse breeder, could the talented horse have the opportunity to achieve great deeds? Therefore, the horse breeder is even greater. The significance of discovering a talented horse far surpasses the significance of the decisions made by the talented horse during its journey. Who was Welch's horse breeder? He was Welch's predecessor, Reg Jones. Reg Jones spent 7 years searching for and evaluating Welch. These 7 years composed the most glorious chapter in the history of GE, and appointing Welch was the most successful decision in the history of GE. In 1974, Jones had been the Chairman of GE for only 3 years, but he had already begun to select his successor. At that time, he was only 57 years old, with 8 years left until his retirement at 65. Jones firmly believed that he wanted to find a successor with a different style from his own, one who could lead GE's reforms. He thought the company needed change, and the successor had to be different from the predecessor. If the successor was just a copy of the predecessor, then the company could not develop. For the successor, Jones did not have a ready-made suitable candidate in mind. Therefore, he asked the human resources department to prepare a list for him. However, his request was politely refused by the human resources department, which believed it should at least be 10 years away. But under Jones's strong demand, the human resources department provided a list containing 96 candidates. At this point, Jones noticed that one person who should have been on the list was missing—Jack Welch, who was in charge of the plastic business. However, the people in human resources had a different opinion. They said Welch was too independent, had a unique personality, and was only 39 years old, too young. At this time, Jones had no choice but to add Welch to the circle of candidates by order. After various considerations, the number of candidates was reduced to 11, and Welch was among them. After 3 years of observation, the image of each candidate in Jones's mind became clearer. To further understand the impressions candidates had of each other and his own feelings about them, Jones implemented his "Cabin Interview" plan. After the New Year's Day of 1978, he invited each candidate into his office one by one. From the conversations, he learned about the candidates' potential for collaboration and their thoughts on other candidates. Whenever a candidate entered his office, Jones would close the door, light his pipe, and signal the interviewer to relax. Then he would begin to ask a formulaic question: "Suppose, you and I are traveling on the company's plane, and the plane crashes. Who should succeed as the Chairman of GE?" Welch was called in unexpectedly and nervously to undergo the "Cabin Interview." As required, Welch wrote down the names of three potential chairmen, including Hood, Bremner, and himself, who later became his boardroom collaborators. "Who is most qualified?" Jones asked. Welch answered without hesitation: "Of course, it's me." They had forgotten that at this point, they had already "crashed" into a "disaster" with Jones during the trip. This conversation made Jones even more impressed by Welch. Three months later, Jones narrowed the candidates down to 8 and had them undergo a second round of "Cabin Interviews." Of course, the questions were changed. "This time, we are still on the same plane, but after the plane crashes, I die, and you are lucky enough to survive. Who do you think should succeed as the Chairman of the company?" Jones asked them to list three candidates. This time, what made Jones most happy was that among the three candidates he preferred—Welch, Hood, and Bremner—each included the other two in their lists of three potential chairmen. At this point, he had already chosen Jack Welch as his successor. To introduce Welch to the board, he had Welch, Hood, and Bremner all join the board. After a period of observation, in November 1980, Jones had the human resources department submit 15 evaluation results, including intelligence, perseverance, self-management, and empathy, and Welch's score ranked . At this time, not only Jones but also the other 19 directors of GE agreed to recommend Welch as the next Chairman of GE. P4-6