At the Bloomberg-Vanity Fair panel the other night, Andrew Ross Sorkin asked Jack Welch whether it was, in fact, true that Welch’s relentless focus on short-term earnings targets destroyed corporate America.
SORKIN: This question is for Jack. Someone said to me today that if there is one person who is responsible from a macro perspective of what’s wrong in corporate America, what happened, it’s actually you.
Focus on short-termism, on quarterly earnings, on making sure that there was a nice, smooth arc to the charts every quarter. What do you make of that?
WELCH: I think it’s an interesting argument. I was there for 80 quarters. I find it difficult to think of 80 quarters as short-term. That’s 20 years. That argument is nonsense.
You have to eat while you dream. And you eat by delivering short-term. And you dream by building jet engines for the future, by building gas turbines for the future, by doing all these things.
You have to deliver both short and long. The idea that some jackass can sit in an office and say don’t bother me now, I’m dreaming about 10 years out – it doesn’t work. You won’t get capital. You won’t be able to invest. You won’t be able to do any of those things. And any jerk in the New York Times can squeeze the paper and squeeze the hell out of it and make the quarter.
SORKIN: …Not these days.