Geneen, Harold Sydney
GENEEN, Harold Sydney
(b. 22 January 1910 in Bourne-mouth, England; d. 21 November 1997 in New York City), corporate executive who, during his tenure as the president and chief executive officer of International Telephone and Telegraph (ITT), transformed it from a minor telecommunications firm into one of the most powerful multinational corporations of the late 1960s and early 1970s.
Geneen was the only child of a Russian Jewish father and an Italian mother. When not quite one year old, he emigrated to the United States with his father, Alexander Geneen, a concert manager, and his mother, Aida DeGruciani. Geneen became a naturalized citizen in 1918. Soon after the family's arrival in the United States, Geneen's parents separated, and he later looked back on his childhood as a lonely time spent at boarding schools and summer camps.
Geneen worked his way through college by serving as a runner at the New York Stock Exchange, and earned a B.S. in accounting and finance from New York University in 1934. After graduation he went to work as a senior accountant at the prestigious firm of Lybrand, Ross Brothers, and Montgomery. Geneen spent eight years at Lybrand, and then served as the chief accountant at the American Can Company (1942–1946); controller for Bell and Howell Company in Chicago (1946–1950), and Jones and Laughlin Steel Corporation in Pittsburgh (1950–1956); and executive vice president and director of Raytheon Manufacturing Company in Waltham, Massachusetts (1956–1959).
Geneen's first marriage came to an end in 1946, and in December 1949 he married June Elizabeth Hjelm, his secretary at Bell and Howell. He never had any children, a fact that may have been closely tied to work habits that gave him little time for a personal life. Prone to working weeks of seventy hours or more, Geneen, who was noted for his aphorisms, once said, "Some people accuse me of being a workaholic. I plead guilty."
In 1959 the board of directors of International Telephone and Telegraph (ITT) named Geneen as the company's president, chief executive officer (CEO), and director of the board. He held the first position until 1973, the second until 1977, and the third until 1983, but he performed most of his most important work in the 1960s. During that decade, Geneen not only transformed ITT, but established a reputation as a management innovator. He also helped to create the blueprint for the U.S. multinational corporation.
When Geneen took the helm of ITT, it had annual sales of about $700 million; by the time he left the company, he had turned it into the eleventh largest corporation in the United States, with sales of $17 billion. Profits soared from $29 million to $550 million. Along the way, ITT acquired some 250 companies in more than eighty countries. Among these were the Sheraton hotel chain; Continental Baking, the makers of Wonder bread; the Hartford, an insurance company; Avis Rent-a-Car; and scores of smaller companies that manufactured or sold products ranging from cosmetics to automobile parts. The philosophy guiding this rampant diversification and expansion was Geneen's belief that competent management and leadership could make a success of any business. His principles of business leadership focused on setting targets, making decisions based on numerical data, receiving frequent reports from subordinates, and taking judicious risks.
With regard to goal setting in business, Geneen was quoted as saying, "You read a book from beginning to end. You run a business the opposite way. You start with the end, and then you do everything you must to reach it." His accounting background gave him a strong faith in the power of numbers to provide an accurate picture of economic performance, and he devoted much of his time to meeting with various leaders in the company, attempting to discern what he called the "unshakable facts" regarding each division. Management meetings, held in Brussels, Belgium, on the last Monday of each month, ran for four days and took place in a room with the curtains drawn. Top managers representing ITT's various holdings around the world would present progress reports, and then would be subjected to a withering series of questions by the CEO.
According to Geneen, "Will Rogers said he never met a man he didn't like. Well, I never met a business that I didn't find interesting." Nevertheless, he refused to invest in computers, airlines, or films, all of which he maintained were too risky. Not all of his attempted acquisitions ended in success. In 1966 ITT tried to purchase the American Broadcasting Company (ABC) television network for $700 million. The fact that this amount was equal to the company's annual sales when Geneen took over just seven years earlier says a great deal regarding his abilities as a leader; however, the ABC deal came to an unsuccessful conclusion when federal antitrust regulators put a stop to it.
During the early 1970s ITT ran into difficulties springing from charges of corruption both at home and abroad. First there were allegations that the company had subsidized the 1972 Republican National Convention in San Diego to gain a favorable antitrust ruling. Given that ITT had its hand in a wide range of businesses, antitrust scrutiny such as that arising from the ABC deal seemed almost inevitable. ITT became the target of investigations by the U.S. Securities and Exchange Commission, the Watergate special prosecutor, a Senate subcommittee on multinational corporations, and a federal grand jury. Additionally, rumors circulated that ITT had been involved in a plot by the Central Intelligence Agency (CIA) to destabilize the democratically elected government of the Chilean president Salvador Allende in 1973. ITT's subsidiary in Chile had been seized by the Allende regime, and the company later admitted that it had provided the CIA with $350,000 for "political" purposes.
Geneen served as the ITT board chairman from 1964 to 1979, and as the chairman of its executive committee from 1974 to 1980. As soon as he departed, the dismantling of ITT, which by then had come to be seen as bloated and vulnerable, began. ITT sold off most of its holdings, including its core telecommunications divisions. After his so-called retirement, Geneen continued to work ten hours a day, creating small companies and further building his investment portfolio. He wrote Managing (1984), with Alvin Moscow, as well as The Synergy Myth and Other Ailments of Business Today (1997). In the latter, he critiqued modern business trends, including the merger mania of the 1990s. Despite his own penchant for acquisitions in the 1960s, Geneen maintained that joining businesses with different management styles was an exercise in futility: "If you mix beef broth, lemon juice, and flour, you don't get magic, you get a mess." Geneen also commented on ITT's fate following his departure: "After I left, the company veered on to a new course, emphasizing consolidation rather than growth. Often I have felt the stab of frustration and regret, wondering what might have been."
In late 1997 the eighty-seven-year-old Geneen was admitted to a local Manhattan hospital after complaining of pain. He soon suffered a heart attack and died in the hospital. His secretary, Marie Serio, who disclosed information regarding his death to news organizations, did not disclose to reporters where he would be buried.
Geneen's management style and his grueling monthly meetings earned him a reputation as a harsh, plain-speaking CEO. Yet he was also widely regarded as a visionary and one of the few true innovators in twentieth-century American business. ITT under Geneen was a prototype for the international conglomerate at a time when such an entity had yet to be comprehended by the leadership of even the largest corporations. As such, it possessed both the strengths and the shortcomings embodied in the phrase "multinational corporation." In the 1960s and early 1970s the company was a powerful player on the national and international stages; but, as symbols of international capitalist influence, Geneen and ITT were targets of scorn among left-wing political activists of the era.
Under Geneen's leadership, ITT diversified and expanded, yet in so doing, it became unwieldy. In hindsight, his attitude of resistance toward the computer industry seems positively quixotic. However, he managed to produce fifty-eight straight quarters of earnings growth, an impressive record by any standard. Although he claimed that numbers and "unshakable facts" governed the growth of ITT, later events suggest that the company's success owed much to Geneen's visionary leadership.
For a full-length biography of Geneen, see Robert J. Schoenberg, Geneen (1985). An overview of his business philosophy can be found in Stuart Crainer, The Ultimate Book of Business Gurus: 110 Thinkers Who Really Made a Difference (1998). Anthony Sampson, The Sovereign State: The Secret History of ITT (1973), contains an analysis of Geneen's contribution to the corporation. For a critique of his role in the history of telecommunications, see Robert Teitelman, "How ITT Blew It: How the Greatest Businessman of the 1960s Turned His Back on the 1990s," Financial World (1989). Obituaries are in the Wall Street Journal (23 Nov. 1997), The Economist (6 Dec. 1997), and the London Times (22 Dec. 1997).
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