The man named the Manager of the Century today by Fortune magazine leads the 300,000 employees of the second most valuable company on earth, but he doesn't believe in layers and bureaucracy.

"Layers insulate. They slow things down. They garble," John F. "Jack" Welch wrote in a letter to shareholders of General Electric Co. at the beginning of the decade. "Hate bureaucracy and all the nonsense that comes with it," he instructed his managers.

Some management analysts believe that may be Welch's great contribution to the lexicon of leadership and a philosophy that helped him become one of the nation's most successful, and celebrated, corporate leaders.

Yet the Welch era is coming to a close. On Monday, Welch told CNBC (which GE owns) that he will retire after the company's annual shareholder meeting in April 2001--precisely 20 years after he became GE's chief executive at age 45. While it has long been known that he would retire at age 65, no exact time had previously been set. He also said he would name his successor--possibly the world's most watched changing of the corporate guard--at the end of 2000.

(GE's shareholders hardly noticed. The stock closed today at $129, down just 37 1/2 cents.)

What made Welch successful? He asked GE's managers to throw away their blue books full of rules, to have a vision and then to trust the company's people to carry it out. He wanted each of GE's various businesses--from refrigerators to financial services--to be No. 1 in its field.

That management style has seen GE flourish. Second only to Microsoft Corp. in its market value, GE has grown from a $14 billion company to a conglomerate with a market capitalization of more than $400 billion in the years since Welch took over.

"What's amazing about him is that he learns from everybody and continually questions assumptions," said James M. Citrin, managing director of SpencerStuart, an executive recruiting firm, and co-author of "Lessons From the Top," for which he interviewed Welch.

Welch told Citrin that you might call his philosophy of breaking down organizational barriers and letting people make decisions the power of informal. He then turned to one of his senior staffers and said: "The power of informal. Let's use that! It's good!"

But in an organization of 300,000 people, that goal still hasn't quite been reached, Citrin said.

Speculation about who will fill the shoes of such an outspoken and admired leader has long occupied GE watchers. The names mentioned most often are W. James McNerny Jr., who runs the company's aircraft-engine business, and Jeffrey R. Immelt, the head of its medical systems unit.

But one thing is certain: It will be someone from inside GE. Unlike other Fortune 500 companies that have gone outside for top talent--companies such as International Business Machines Corp., Hewlett-Packard Co. and AT&T Corp.--GE has a strong leadership bench, company observers say.

"The whole key to Welch is that he has developed more leadership talent than any large organization in the world," said Noel M. Tichy, a professor at the University of Michigan business school and coauthor of a book on Welch titled "Control Your Destiny or Someone Else Will: How Jack Welch Is Making GE the World's Most Competitive Company."

For example, Welch set up GE's own leadership development center in Crotonville, N.Y. Each year, 10,000 managers go through the company's management war college to learn Welch-style management. Welch himself leaves his Fairfield, Conn., offices at least once every two weeks to sit in "the pit," a room where employees call him Jack and can ask anything they want.

He also instituted annual evaluations for the top 5,000 people at GE, where each was ranked on performance and values. If an employee scored high on performance but low on matching GE's value system, he was fired.

Not everything Welch has touched has turned golden. In his first years at GE, when he cut more than 100,000 people from the payroll, he was known as "Neutron Jack," and managers say he can be tough and demanding.

"I don't think he's a wizard," said Gerald C. Meyers, the Ford distinguished professor at Carnegie Mellon University's graduate school of business and former chief executive of American Motors.

Looking back on a century of change, Fortune chose as its businessman of the century Henry Ford, "the builder of an industry that transformed the very land we live on." His runner-up was Microsoft's Bill Gates.