Q: Do you give people goals to improve their performance?

A: I think goals are less helpful than knowing they are not at a dead end. We want to grow this company as fast as we can. I think that is about as specific a goal as I ought to be setting. Because I want to let them think up a zillion ways to grow. If I know what to do, what do I need them for? Some companies have contracts with their employees. I hate those. If you and I are making a contract, and I am the boss, what are you likely to do for the week before we meet? You are going to work out 50 charts to prove to me that you can't do too much. And I am going to try to pull you higher. And in the end we will compromise.

On the other hand, if I turn to you and say I wantevery growth idea you have in your body -- and I ask, ``What do you need, do you need more people, do you need more research and development?''-- you will come in with all kinds of things that I have never thought about. Then I can say, ``I don't like that idea, I don't want to do that one, but I would like to do that one.'' The dialogue between us is so much richer.

Q: How do you encourage risk-taking and mistakes when you also require results?

A: I talked before about the disadvantage of working in a big company, the numbing feeling you can have in the parking lot. But there's also an advantage to being huge.

Last year, we made 108 acquisitions for $21 billion. That's 108 swings. Every one of those acquisitions had a perfect plan. But we know 20 per cent or 30 per cent will blow up in our face. A small company can only make one or two bets or they go out of business. But we can afford to make lots more mistakes, and in fact we have to throw more things at the wall. The big companies that getinto trouble are those that try to manage their size instead of experimenting with it.

Q: How do you get your message down through the ranks?

A: I would never want to run this company without Crotonville (GE's management training center in Crotonville, New York). About 5,000 people go through there each year. I will see about 1,000 myself for four hours, plus another two hours at the bar.

Q: Aren't you also known for sending personal notes to managers?

A: I just became an e-mail person. And one executive I e-mailed wrote back saying he couldn't stand my new skill. He said, ``How will I know without that big black scribble across the top of the page--with the width of the scribble determining the angst with which you are writing--how you feel?''

Q: How involved do you get in GE's distinct businesses?

A: My job is not to know everything about each business. It is to pick the people who will run the business and to decide how much money Business A versus Business B or C gets--andhow to transfer people, dollars and ideas across those businesses. I don't get into the how. So I get into trouble when I get on the golf course with someone from a particular industry who wants to know how the widget is built. I am out of gas then.

Q: When it comes to recognizing employees, what counts more, financial rewards or the personal touch?

A: I think showering rewards on people for excellence is an important part of the management process. There's nothing I like more than giving big raises. I don't want anyone with his nose against the glass, I want them to go right through the glass--maybe because I had my nose against the glass. You have to get rewarded in the soul and the wallet.

The money isn't enough, but a plaque isn't enough either. Years ago I worked for somebody who was giving out medals to employees who got patents. I wanted to give them more cash. This guy was a fat cat who had a lot of money. He said money is so crass, just give them the medal. I just thought that was wrong;you have to give both.

Q: How do you evaluate your top executives? Do you rate them against each other?

A: I compare them against their competition, and never against each other. We have one plan where half the reward an executive gets is for the performance of his business and half for the performance of the whole company. But if the company doesn't make it and the business has a greater performance, the bonus is zero-because no boats get to the shore if the Titanic sinks.

Q: How important is it to feel attuned with the people you manage?

A: It doesn't matter if you don't want to hang around with them or socialise with them. It doesn't matter is someone doesn't like baseball or libraries or museums or opera or they dress differently than you. But if your business values are different, if your treatment of people is different, if you don't agree about the behaviour you want to cultivate in your company, that is a problem. You have to be on the same page there.

Q: How do you overcomeemployees' intimidation when in your presence?

A: This is a hard question, because I don't really know if they feel intimidated. But we have a lot of humor in our company. We spend a lot of time screwing around.

Our meetings are not always the most productive. Like, for example, the other Monday: We spent the first half-hour talking about Saturday's golf tournament, and everybody was screaming about the putts. And we had the most crazy packed day.

Q: You've been identified with GE for so long. How will your successor establish his own identity?

A: By being himself and doing it his way. It will take some time. It takes everyone time. But we are so deep. We have so many people. This is so much less of a one-man show than the world will ever give it credit for being. They are all sitting there saying, ``I would like to do this this way. I would like to do that that way. And why is that jerk doing that?'' That is the way life is.

The Asian Wall Street Journal