Anything Jack Can Do...

Jack Welch wanted everything to be perfect. The celebrated chief executive has spent 20 years turning General Electric into America's most admired company, and as the clock ticked toward his retirement next year, the race to succeed him had become the most closely watched CEO sweepstakes in history. So Welch waited until the quiet Thanksgiving weekend to secretly convene GE's directors and anoint Jeffrey Immelt, the head of GE's medical-equipment business, as the CEO-in-waiting. To prevent leaks, Immelt used a pseudonym ("Mr. Cathcart") to fly to Florida for a celebration dinner. Then Welch surprised his own pilots with last-second orders to fly his corporate jet to Ohio and New York so he could tell the runners-up they'd fallen short. Everything went smoothly until last week's press conference, when Immelt coincidentally wore the same blue shirt, blue blazer and gray slacks as the boss.

Investors hope the similarities go beyond their wardrobes. Immelt, who played Ivy League football and earned a Harvard M.B.A. before going to GE in 1982, wins praise from colleagues and analysts. They describe him as deeply analytical (college major: applied mathematics) and highly demanding, but say he also displays unusual warmth for a hard-charging boss. "He's a very high-bandwidth listener... with a soft touch," says Ben Shapiro, his faculty adviser at Harvard Business School. Others praise his ability to use humor to avoid intimidating his charges. (Indeed, Immelt jokes that when Welch called to offer him the job, "I wanted to check the caller ID to make sure it wasn't one of my friends busting my a--.") Observers say he nosed past rivals in this horse race in part by virtue of his age--at just 44, he could run GE for 20 years, just as Welch has--and by adeptly using technology (especially the Internet) to help his division achieve huge growth in a flat market.

For Welch, who's long preached that a CEO should spend most of his time grooming subordinates, the search for his replacement was all-consuming. "It was the toughest decision I ever made in my life," Welch says. While companies like Coca-Cola have badly fumbled succession by betting too heavily on a boss's protege, Welch kept this race wide open, with three candidates in contention into the final weeks. Some observers figured the contest became more complicated last month when Welch moved back his retirement, scheduled for April, until the end of 2001 so he could oversee GE's pending acquisition of Honeywell. But Welch stuck by his pledge to tap a successor by the year-end. The runners-up, James McNerney and Robert Nardelli, took the news like pros, Welch says. "Nobody asked for a recount." But with so many companies--including Lucent Technologies and 3M--searching for new chiefs, they'll likely depart for top jobs in short order. They'll join more than a dozen other GE alumni running big companies, but that pedigree doesn't guarantee success. Example: Owens Corning, run by former GE exec Glen Hiner, recently filed for bankruptcy. "GE leaders are the best-trained in the world," says Noel Tichy, a former GE executive who's now a consultant, but they have to play the hand they're dealt. "Phil Jackson could be given mediocre players, and he wouldn't be world class."

Back at headquarters, Immelt spent last week telephoning more than 50 key subordinates, a sign he plans to mimic Welch's focus on his people. He'll face big challenges, particularly in growing GE's revenues as the economy slows. But Wall Street is optimistic. Prudential Securities analyst Nicholas Heymann predicts GE stock, now at $51, could double in 15 months. Even that may not win Immelt the hagiography that's been heaped on Welch, but his fans say he'll get the job done with or without the headlines. "He's a good person to go to war with," says Jake Crouthamel, his football coach at Dartmouth. "You can count on him." GE's shareholders are hoping he's right.