Welch's Legacy of Leadership - Jack Welch - Brief Article

Chief Executive, The, Oct, 2001 by Sandy Kemper

CAN A SCUTTLED SWAN SONG such as Jack Welch's failed bid for Honeywell hobble the legacy of his 41-year career?

"Welch's place in business history was secure long before Honeywell," opines Jeffrey Krames, author of The Jack Welch Lexicon of Leadership and editor of four books on the GE chief.

Krames offers lessons other CEOs can learn from Welch's disappointment:

"One, don't allow hubris into the board room. Welch has said his greatest mistake was the acquisition of the investment bank Kidder Peabody. At least two board members advised against it, and Welch has admitted that hubris played a role in his decision. Likewise with Honeywell, Welch never allowed for the possibility that antitrust would be an issue.

"Two, live speed, but do not shortchange the due diligence process. Welch moved so quickly he didn't even have time to check with his European lawyers.

"And three, never underestimate the importance of culture. Honeywell had never been properly integrated with AlliedSignal. Had the deal been approved, integration could have consumed [the energy of GE executives] for years. The European Commission may well have safeguarded the Welch legacy."

Sandy Kemper, founder and CEO of online banking services firm eScout and former chairman and CEO of UMB Bank.