Jeff Immelt, the outgoing CEO of General Electric Co. (Boston), was the last man standing from a competition to succeed a corporate legend.
The legend, whether you think he deserved that label or not, was Jack Welch, the GE chief from 1981 to 2001. Under Welch, terms such as Six Sigma became trendy in corporate management circles.
Welch, now 81, also popularized a ruthless corporate culture where the bottom 20% of employees were targeted to be broomed out. Ford Motor Co. adapted the approach under Jacques Nasser, the CEO from 1999 to 2001, who wanted to remake Ford in GE’s image. The Welch system didn’t take at Ford, one of the reasons Nasser was deposed.
Welch had GE get big in financial services and acquire RCA (which included NBC). Welch’s big priority was for GE properties to be No. 1 or No. 2 in their industries. Welch became a celebrity CEO.
So it was a big deal when it came time in 2000 to pick a successor at GE. The contenders were Immelt, Robert Nardelli, now 69, and W. James McNerney, 67.
Immelt won out. In a way, he became the anti-Welch. Immelt divested financial assets and NBC (now NBC Universal) to concentrate on manufacturing. He made a big bet on 3D printing, including acquisitions.
However, over the past 12 months, GE’s stock price has been treading water, trading between $28.73 and $29.47 a share. Investors haven’t yet bought into the Immelt vision. So, the executive is ending his GE tenure as being the latest corporate boss to have a sudden yearning to retire.
The industrial conglomerate announced June 12 that Immelt, 61, is departing at year’s end. John Flannery, head of GE Healthcare, will take command Aug. 1. Flannery will pick up the chairman’s title from Immelt after his retirement.
All of the would-be Welch successors had their shares of ups and downs.
McNerney left GE and became CEO at 3M and Boeing Co. before retirement. Nardelli went to Home Depot but was forced out. He later was in charge at Chrysler after it was sold by Daimler AG. Chrysler nearly went out of a business and survived because of US government bailout. As part of the bailout, Chrysler was taken over by Fiat in 2009.
Now, Immelt, who bested McNerney and Nardelli, is headed out the door at GE. Succeeding a legend never is easy.
Perhaps Flannery, who will take command 16 years removed from the Jack Welch era, will fare better. For him, the comparison will be against Immelt, rather than Welch.
Bill Koenig, a senior editor of Manufacturing Engineering, was a Bloomberg News reporter and editor from 2001 to 2013.