‘Manager of the century’ Welch remembered by Chinese corporate leaders such as Jack Ma, Guo Guangchang
- Welch’s philosophy key to Alibaba’s core ‘kung-fu’ values: Hupan University
- Liu Chuanzhi says he learned from GE chief how to diversify Lenovo’s business
Jack Welch, who died on Monday at the age of 84, was very highly regarded in mainland China, where he engaged with the who’s who of Chinese business leaders.
Top names such as Alibaba Group Holding’s Jack Ma, Guo Guangchang, the chairman of Fosun International, Liu Chuanzhi, who founded Legend Computers, which later became Lenovo, and Zhang Ruimin, chairman of home appliances maker Haier, have said they took inspiration from the “manager of the century” when building their own business empires during a period of breakneck growth in the Chinese economy over the past three decades.
Welch ran American conglomerate General Electric from 1981 to 2001 and turned it into the world’s most valuable company. Thousands of Chinese entrepreneurs have read his bestselling books “Winning” and “Jack: Straight from the Gut”, as they searched for insight into his management philosophy.
Hupan University, a programme founded by Ma for entrepreneurs, said on Tuesday that Welch’s philosophy played a key role in helping Alibaba create its core “kung-fu” values in its early days. “The values ushered in a unique appraisal system and became a constant driving force for Alibaba ever since, which built up businesses with its own mission and vision,” it said.
According to Hupan, Savio Kwan Ming Sang, a former GE executive who was Alibaba’s chief operating officer until 2012, played a crucial role in the creation of the so-called Nine Vein Spirit Sword values. He introduced a rewards system that was new to mainland Chinese companies, something he took from the GE playbook.
When Ma, China’s wealthiest person according to the Hurun Global Rich List with a net worth of US$45 billion, met Welch and dined with him at Bill Gate’s home in July 2008, he thanked Welch for grooming Kwan.
Alibaba, the South China Morning Post’s parent company, has grown from a start-up with just 18 employees into the world’s largest online retailer, and has a market cap of US$566 billion to date.
Guo, Fosun’s chairman, said a dialogue with Welch in 2004 had set the tone for development at the conglomerate over the past 16 years. “I was impressed by the old gentleman’s wit and vision,” he said. “The answers he gave me had a huge impact on Fosun’s growth in the past 16 years.”
Focusing on talent development was the key advice Welch offered, Guo said. Welch also suggested Fosun target the top two positions in certain sectors rather than investing in different businesses. Guo said Welch’s tips were the inspiration behind Fosun’s recent decision to strengthen its business segments related to consumer spending.
Welch’s heyday coincided with a shift in China from a planned economy to a market-based economy in 1990s. And as the world’s most populated country encouraged state-owned and privately-owned companies to enhance performance and meet people’s rising demand for better consumer products and services, he came to inspire a whole generation of entrepreneurs.
A clutch of mainland corporate giants arose amid these drastic economic reforms. Among them were Lenovo, formerly known as Legend Computers, and home appliances maker Haier. They were among companies adopting management structures aimed at reducing bureaucracy and boosting efficiency.
Liu, who founded Legend Computers in 1984, said during a China Central Television programme in 2015 that he could not be compared to Welch as a company boss, but that he had learned from the former GE chief how to diversify Lenovo’s business.
“When I met Welch, I was impressed by his super brain and the wit he had,” Liu said. “After I studied GE’s business model of a conglomerate driven by the two engines of industrial and financial businesses, I realised that a diversification of our company was needed to pursue further growth.”
Zhang, Haier’s chairman, has said on several occasions that he would have liked to have met Welch, and ask him for advice on better managing his company.
Rachel Duan, president and chief executive of GE Global Growth Organisation, who is also head of GE China, the first Chinese to take up the role, said she clearly remembered her first meeting with Welch, which took place more than two decades ago.
“[I was] nervous like hell because he was such a legend at the beginning, but utterly enjoyed the experience because he is such a straight shooter, down to earth, truly valuing your opinions regardless of rank and where you are from, and plus he was just charming,” she said.
