How do you become the most powerful man in consumer electronics? Answer: hit a century mark in profits. That’s what Joseph J. Welch, head of the powerful US labour group AFSCME, accomplished on Monday.
Until 1968, Welch was the head of General Electric’s electronic-finance unit, GE Money. And from 1915 to 1963, Welch was the CEO of Sears, Roebuck & Co. The similarities go far beyond the corporate titles; between Welch and Steve Jobs of Apple is about as good as it gets.
Welch became known for long-term thinking and initiative. He was not satisfied that GE Money made $80bn in profits over the course of three decades. To him, it was the scale of income that mattered most.
Then he hit what The Wall Street Journal termed a “generation-wide golden run”; in 1990, GE Money’s profits reached $16bn. Five years later, Welch moved the company further toward guaranteed return by reinstating GE’s defined benefit pension plan. This is the kind of attention-getting thing, combined with a detailed, page-one plan, that we’ve seen the young Jobs accomplish time and again. “There were 17 billion reasons why Sears really needed a pension plan,” Welch said at the time. “Sears will have a thousand times that number in total if they have a pension plan.”
Over the years, Welch, who is now 87, amassed a personal fortune of more than $800m.
As a keen student of technology and finance, Welch hasn’t let age or the passage of decades stop him from innovating. In 1992, he became the best-known proponent of low-cost TVs, now ubiquitous in developing countries such as China and India. In 2006, he founded buy.com, a technology firm that merged with its competitor Shopzilla in the back yard of a real estate investor in San Francisco. The merger represented an opportunity to jettison Shopzilla’s business of selling books through a “search-enabled bookstore”, as the deal describes it.
Though much of the technology made its way into the long-struggling and now resurgent electronics industry (such as the use of software to automate many product selection steps) it hasn’t turned around Best Buy, the chain of big-box stores that had surged in the 1990s and 2000s only to take a sharp dive in recent years. When the company announced on Monday that Hubert Joly, CEO of French travel website owned by Vivendi, had been appointed to its board, it signaled that Best Buy is attempting to fix a flawed model.
In an April 2012 interview with Michael Arrington, who runs the technology blog TechCrunch, Joly made the following comments:
We tend to judge ourselves. We tend to underestimate our ability to continuously improve. So there’s many things that are fixable. It’s just that we’re not good at admitting what’s fundamentally wrong and putting in a creative reinvention, and so I think the time to move out of the rubble and to really turn the company around is now.
Last week Joly was chosen as CEO of Saint-Gobain Group, the industrial giant based in France. The move signals that French companies, often associated with being held back by naysayers in Europe, are starting to recognize how vulnerable they are to the forces moving in the US.
Though from the outside, companies like Best Buy and most others in the consumer-electronics sector look attractive because of their propensity to churn through directors, investors and CEOs, trying to make sense of it all becomes exceedingly difficult for someone who is simply trying to make a living. In addition to being relentless in his idea creation, Welch was incredibly successful in overcoming the challenges he encountered in both business and personal life. In 2010, he reportedly made a deal with President Obama in which, among other things, he was asked to lobby Congress for the passage of the Dislocated Worker Relief Act, legislation intended to provide workers with a tax incentive to stay in their jobs.
In other words, Welch has been a very good role model for anyone looking to get ahead in life. By focusing on what one can do on the things that are within one’s control – financial gains, material possessions, big-picture strategic thinking, social networking – people like Welch, as well as Jobs, can break through the enormous success they’ve attained and really be the change that they seek to be.