| BUSINESSWEEK ONLINE : JUNE 28, 1999 ISSUE | ||||||||
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| COVER STORY
GE's Welch: 'This Is the Greatest Opportunity Yet' Jack Welch, CEO of General Electric Corp., has plenty to say on the topic of the Internet. For instance, he says it's "number one, two, three, and four" on his list of priorities as GE moves into the next century. Welch recently spoke with Connecticut Bureau Chief Diane Brady about the challenges companies face in establishing an Internet presence. Here are edited excerpts of their conversation: Q: Some CEOs are scared that the Internet could pose a threat to their long-term corporate survival. Do you think they're right to worry? A: It's like any big change. You can look at it in one of two ways -- as an opportunity or as something to fear. You have to have a certain amount of fear to see the opportunities. But I see huge opportunities. Q: Everyone talks about the nimble startups. Do you see any advantages for old-line companies and old-line models? A: Of course, there are a lot of advantages for existing companies. They have the business processes. They have the fulfillment capabilities. They have the brand recognition, and they often have the technology. The disadvantages are that they're fighting an existing model. They've got to break the mold. Q: There are a lot of ways to get into the Internet. What sets the best ventures apart from rest? A: The ventures that win have to be customer-centered. Are they really filling customer needs? I'm not qualified to say who will win out. That's to be determined. Look at the Dow Jones first 30, look at the genetic engineering companies. Several went on to great futures, and others have disappeared. Q: What kind of companies are you looking to buy? A: We're not looking to buy Internet companies. We want to become Internet-enabled. It's an enabler of commerce. I'm looking to capitalize on what I have. We're looking at all kinds of industries, and we're making all kinds of investments. We're deeply into Six Sigma, so our business processes have been refined. We're farther up the curve. We've been talking about the boundaryless corporation, and this moves us closer to being that boundaryless corporation. Q: What about NBCi? Could you have done that with just NBC? A: We could have taken NBC assets and tried to create an Internet company, but this is better. You have a combination of NBC assets, Zoom assets, and Cnet assets that are tough to beat. Q: You've called some of these Internet stocks wampum. Do you think companies are trying to get in on the wampum? There must be some envy out there. A: Envy is the last thing you should think of. This has created a whole new energy for corporations to excite and organize their people, to leverage and capitalize on their strengths. We always talk about change being an opportunity. This is the greatest opportunity yet. The great thing about the Internet is it makes everything transparent. Q: But a lot of these Internet plays are losing money, yet they're worth more on paper than successful brick-and-mortar firms. GE has to meet quarterly expectations, or you hear about it from shareholders. A: That's a plus. We're going to make more than $10 billion this year. Look at the size of these Internet companies. They're all popcorn stands! We have a number of units you could call DestroyYourBusiness.Com aimed at attacking our existing businesses. We can afford to do that. Q: One person said to get a stake in the Internet, you have to lose money. You have to go through a Valley of Death, as he put it, to succeed. A: What the hell is a Valley of Death in these things? They're popcorn stands. We can afford to make these investments. So what if they don't generate billions? Look at the size of what you're dealing with here. Q: You've built your personal fortune over decades, and some of these Net billionaires do it overnight. Doesn't that bother you? A: I've never heard anyone feel sorry about me and my wealth before. Am I frustrated at these Internet billionaires? I'm thrilled. That's what's great about this country. Everybody can take a swing and make billions. Q: So how high is the Internet on your agenda? A: I don't think there's been anything more important or more widespread in all my years at GE. Where does the Internet rank in priority? It's number one, two, three, and four. Q: How will it change GE in the coming years? A: I know GE will be faster, it will be more energized, it will be better, it will be more global, and it will be more customer-centered. Q: Does it make your job easier in managing the corporation? A: This is about as good as it gets. This takes everything that's mundane, everything that's slow, and it takes them out of the game. You're not pulling an organization in this one. You're letting it grow like flowers. You have a group of people dying to get into the Internet. That's so much easier to manage. You're asking them to break the mold. Everybody is excited. They want a piece of this too. And we can give it to them. It just doesn't get much better than this. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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