Once, during his long reign at International Telephone & Telegraph Co., Harold Geneen dispatched a pair of engineers from headquarters to ITT installations around the world on a hit mission.
Their assignment: to ferret out any efforts under way in any ITT company to develop computers. For several years, they were licensed to kill any projects that might lead ITT into competition with IBM.
"If they were given any trouble, they were to call us at headquarters, and we would stamp it out for them," he said.
That is a Harold Geneen story. There are a lot of Harold Geneen stories, and he's added to them in his latest incarnation as author and critic of American management practices in his new book, "Managing," written with Alvin Moscow.
In fact, when Geneen talks about management, the only thing missing is Frank Sinatra singing "My Way" in the background. As the man who transformed ITT from a troubled telecommunications firm with annual sales of $765 million to a global conglomerate with $22 billion in sales 17 years later, triggering some political and diplomatic land mines along the way, Geneen has few regrets or second thoughts about his approach to managing.
"I don't believe it can be done in better ways," Geneen said. "We bought over $6 billion worth of companies and welded them together into a company that grew and made a profit."
Geneen, who can claim the bushiest set of eyebrows since Leonid Brezhnev, retired from ITT in 1979. During his tenure, he bought, sold or merged more than 350 companies. That's a rate of more than 20 companies a year.
He does leveraged-buyout deals now on a far smaller scale than was his practice, and although he denies it, he gives the impression that he misses the rough and tumble of the top. At 74, he still works 12-hour days.
"When I look out at the ITT building after 6, most of the office lights are out. It's a different company now," he said ruefully,
Many corporate managers and business analysts would argue that Geneen's style and strategy belong to a different time. Now there is a widespread trend to reverse the kind of empire-building he symbolized, as conglomerates sell off whole divisions to make themselves more manageable. ITT is among them -- it is selling ITT Continental Baking Co., for instance, to help finance a risky move into the fiercely competitive U.S. telecommunications and automated-office-equipment field.
Books on managerial strategy such as "In Search of Excellence" sell millions of copies by preaching "small is beautiful" homilies against conglomeration and advising managers to build from within, on their strengths, rather than grow by snapping up target companies. But Geneen insists that his approach is the only way to manage large and growing enterprises.
Sitting in his office at the Waldorf Towers -- spitting distance away from ITT World Headquarters -- Geneen picked up a copy of Business Week. On the cover is a photograph of "In Search of Excellence." The headline is a boldfaced and oversized "OOPS!" The story describes how many of the "In Search of Excellence" companies have fallen on harder times.
In a very neat hand, Geneen has underlined several passages in the article and marked others with asterisks. He can't help smiling as he reads from it aloud.
"There are 42 companies listed here," he said. "Fourteen of these companies now have management troubles or earnings troubles or some other troubles. That's one-third in two years. We had our problems, but not in that ratio. This tremendous formula -- which has sold 2.5 million books, by the way -- seems to have something wrong with it. These companies couldn't handle the growth."
Geneen's book, which has yet to crack the best-seller lists, offers the prescription he says these companies need: Facts and Hard Work.
Harold Geneen likes facts. His whole corporate structuring of ITT was geared to rooting out the facts -- the critical benchmarks and telltale indicators of a business' performance.
"We worked on what I call breaking facts," Geneen said. "We had 250 divisions we were running, and the top guy in each wrote a report every month that covered everything. All 250 of those guys sent their reports directly to me -- which cut out at least three layers of management -- and I read them all.
"We all had these facts coming in, and we took all those and, once a month, we sat down here for a full week of meetings. There'd be about 120 people in, and we'd go to 10 or 11 at night just beating the hell out of those facts. We'd take the factual approach to all this frontline material, and you knew and everyone else knew what was happening."
Combine that with a full week of meetings in ITT's headquarters in Brussels, and you have a situation where for 18 years we must have spent nine years doing nothing but meetings to figure out what to do," Geneen said.
The meetings assumed an almost legendary quality, with Geneen's command of detail determining the ebb and flow of managerial criticism. One-syllable words were as common as seven-digit numbers. But Geneen asserts that the monthly meetings were the only structural way to assure that he and everyone else in the company knew where everything stood. Geneen is a great believer in personal contact. That way "we stayed close to the breaking facts," he said.
"The only other option is to delegate down and act like a traffic cop."
The result was a balance sheet that was the envy of corporate America and a darling of the Wall Street experts who insisted on bottom-line performance. Geneen likes to note that ITT's earnings per share grew an average of 10 percent a year during a span of 58 consecutive quarters, a record that a retrenching ITT cannot begin to boast of today. That represented a quadrupling of per-share earnings in 14 1/2 years.
Along with that kind of financial performance came a sense that the business of ITT was business.
"Gradually, as we grew more confident in our skills, we got to the point where we thought we could buy anything and manage it," Geneen said. "And that's exactly what we did."
Geneen dismisses the suggestion that the idea that ITT could run anything is presumptuous.
"I don't think that's arrogant," he insisted. "I think that's hard goddamn work.
"The one drawback of this approach is that you have to do a lot of homework yourself," he maintained. "You had to do a lot of homework to carry your end of the game."
Although he declines to say so explicitly, Geneen, who won worldwide notoriety as the consummate workaholic, feels that many American managers have simply gotten lazy. It's not that giant conglomerates such as ITT can't be managed, it's that top management won't make a hard enough effort to do so.
Geneen likes to compare his brand of hands-on management to cooking on a wood stove: You have to check the fire, watch the pot, add the right amount of seasoning and dip a finger in to taste the stew. It's a job for an expert chef and not a matter of punching buttons on a computerized microwave oven and coming back in half an hour.
"All this stuff about conglomerates slimming down is a lot of baloney," he said. "They're probably selling off because: a) they need the money, or b) they don't know how to manage it.
"General Electric is a diversified company, isn't it? It's in jet planes and robotics and medical technologies and light bulbs, isn't it? It's very successfully run, isn't it?"
Geneen maintains, even in this current era of deconglomerization, that the underlying principle of conglomerate diversification still applies: With a broad enough range of holdings, some companies in the corporate portfolio always will be outperforming the economic cycle.
"We made it work by doing a lot of work," he said.
But there are some questions about management that Geneen finds more difficult to answer. He has trouble assessing what his own weakness as a manager was.
"I think it was relying too much on the assumptions of others," he said.
Moreover, it was never quite clear just what ITT was supposed to be beyond a profit-making entity. Geneen avoids words and phrases like "vision" or "strategic planning" or "corporate mission" when talking about his old company or about how to manage existing ones.
"I believe in managing companies for a profit," Geneen said. "Our vision was that our autonomous divisions would expand and be more profitable in their markets."
That's not a particularly profound statement, but it was the basis for Geneen's success as a conglomerateur. In many respects, he is the arch-disciple of his own self-described "Three Sentence Course on Management":
"You read a book from beginning to end. You run a business the opposite way. You start from the end, and then you do everything you can to reach it."
Geneen's "Managing" is best read from beginning to end but, as even he concedes, it's less likely to have the same kind of impact on the business community that his managing did.