Head of the “Family”
But where to begin? To understand that question in context, one has to know the ethos of GE. Outsiders say that the GE monogram is stamped on the rear ends of its people. And well it might be, given the average of twenty-five years that senior managers have been with the company. They share knowledge, traditions, a history, a value system, and a self-image. From early on it is drummed into GE managers that the company’s image must be protected at the expense of short-term gains that compromise quality or integrity. Though the company was shaken by a price-fixing scandal that sent some GE vice-presidents to, jail, high standards of “ethical entrepreneurship,” moral integrity, hallmark quality, and technical leadership had long been integral to GE’s self-image.
Despite its size, its many divisions, and the enormous range of its products, GE is not a conglomerate. GE’s monogram is affixed to all products. (Hotpoint added “Made by General Electric” on its appliances.) That monogram constitutes a banner and a franchise under which everyone wins or loses—the “toaster rubs off on the turbine” theory—fostering the “one company” image. When Ralph J. Cordiner, Borch’s predecessor, decentralized GE in the early 1950S into no businesses, managers were continuously reminded they were still part of GE. Loyalty is highly valued, first to the company as a whole and then to one’s businesses. Self-aggrandizement is not tolerated. In fact, some believe that when Fortune featured Dr. Thomas A. Vanderslice as a potential successor to Jones, that killed his chances.
Loyalty is exemplified in another way. No one interviewed for this chapter, even those who had left the company, would say much that was negative about Jones or GE. Nor would they speak with financial reporters who sought to interview former GE executives about their GE experiences. That loyalty, together with strong hierarchical control and entrepreneurial-minded managers, makes for extreme responsiveness to corporate signals. When Fred Borch gave the signal that the company had to become international, according to Jones, “You couldn’t go into the airport at Frankfurt any day of the week without seeing two or three GE people moving through Frankfurt at the same time.” GE managers rushed pell mell to buy up companies—too many of which had to be divested in the next five years.
“GE has a unique culture. It’s a family. We enjoy each other. We don’t lose many in the family of GE people. We’re so supportive of each other,” said Jones. “We try desperately to save an individual who has failed, by placing him in a job that better matches his capacities, in order that that individual can make a contribution to the organization. We save many people. There is a renaissance of these people in many instances.” This is not merely pious talk. In one case, Jones demoted a failing group head to a regional vice-presidency where the latter’s customer contact and business expertise won him respect. In another, a senior executive requested demotion to a position in which he subsequently gained accolades.
The easy give-and-take informality that marks and promotes the network of friendships and collegial fellowship at GE is expressed in the emphasis on teamwork. GE executives come from many origins. There are said to be no old school ties or ethnic or regional cliques among them. Plaudits are shared with the group, and competition is muted and gentlemanly. An observer might even say that it is suppressed. This may explain the insiders’ image of the company as having a low incidence of politics. The expression of caring and concern for people is balanced by a reverence for analytical, objective approaches to business. Some attribute this to the large numbers of scientists and engineers in the organization. Conservative comportment in dress and speech (profanity raises eyebrows) is paralleled by marked financial conservatism. “It’s a mature company, balanced, sound, solid, one of the most financially conservative companies,” Jones remarked, adding, “A foreign visitor once said, ‘The company reminds me of a staid old woman who looks both ways before going across the street.’”
Another facet of the company’s character had nearly led to a financial rout. “I knew that GE traditionally never gives up on anything,” Jones told a reportel. as he replayed his role in the venture into computer manufacturing, and in the 1970 retreat. An early booster of entry into computers, Jones, then financial vice-president, sounded the alarm in 1970 to reassess that costly effort. “We never appreciated the size of the opportunity and we never devoted the resources to it that we should have,” Jones told the Wall Street Journal. He was a key member of the task force assigned the job of reexamining the venture. They proposed and won approval for immediate withdrawal, and Jones was asked to execute it. His and others’ analyses showed GE’s strength in international markets and Honeywell’s in the United States, GE’s strength in the largest and smallest computer lines, Honeywell’s in the middle. Combining the two product lines and the marketing organizations would create a strong competitor, an outcome that negotiator Jones impressed upon Honeywell as well as the Justice Department. He spent nine months negotiating the deal. Out of the subsequent sale to Honeywell, GE recouped $240 million of its losses.2 Pundits note that had GE delayed a year or two longer, it would have had to close out that business at a far greater loss. Many believe, as Jack Parker said, it was literally Jones’s crowning achievement.3
There was no organizational revolution when Jones took over. He knew he had to work “with the grain.” It was not a matter of going along to get along; he abhorred the prospect of a GE turned bureaucratic. But Jones grasped that the grain—GE’s traditions, its culture— was the transducer through which he would harness, energize, stabilize, and steer this leviathan through whatever economic seas it might encounter.
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