boarding schools and summer camps. When Geneen started work, as a runner for the New York
Stock Exchange, he continued to study at night at New York University. In 1934 his hard work
was rewarded with a degree in accounting.
For the next 25 years his career took in a string of companies starting with the forerunners of
Coopers & Lybrand followed by Montgomery an accounting firm, then the American Can Co.,
Bell and Howell Co., Jones and Laughlin Steel Co. and Raytheon. After Raytheon, where
Geneen was vicepresident, came the biggest challenge of Geneen’s career and the job that
made him famous — International Telegraph and Telephone Company (ITT).
When Geneen arrived at ITT in 1959 the corporation was a ragbag collection of businesses,
loosely focused around telecommunications, with revenues of $800,000. During the 1960s the
predominant organisational trend was one of diversification and conglomeration. CEOs went
into a purchasing frenzy raiding the corporate aisles for any company, no matter what business
it was in, so long as it turned a profit. Geneen was no exception.
Over the ensuing decade Geneen purchased over 300 companies operating in over 60 different
countries. There was no rationale to these purchases, no common thread, other than that of
profit. Sheraton hotels, Avis car hire, Continental Baking, were all tucked away in ITT’s roomy
It was a mammoth undertaking to manage so many disparate companies. Fortunately for ITT,
Geneen was a fiercely driven workaholic. His ITT office in New York was equipped with
eight telephones and a clock that showed what parts of the world were in daylight, and what in
Ten suitcase-sized leather attaché cases crammed full of documents were stacked along the
window ledges. Six of the cases, stuffed with reports, communiqués and memos from over 400
reporting corporations, followed Geneen around the country and the world.
In his late eighties long after he left ITT, Geneen was still working a ten hour day at his office
in New York’s Waldorf-Astoria hotel running a company, Gunther International, that he had
bought into in 1992. “If I had enough arms and legs and time, I would do it all myself,” said
Geneen. Even then it required all his energy to control the ITT conglomerate. To keep ITT
under control Geneen employed rigorous financial accounting methods.
Each month 50 or more executives flew to Brussels to spend several days examining the
figures. “I want no surprises,” was one of Geneen’s mantras. Full information was paramount,
as was the ability to tell real facts for details masquerading as facts. “The highest art of
professional management requires the literal ability to smell a real fact from all others,”
And Geneen’s approach seemed to work. From 1959 to 1977 ITT sales rocketed from some
$765 million to approaching $28 billion, with earnings up from $29 million to $562 million.
It was a success by most people standards, not just Geneen’s.
Yet the more companies Geneen acquired, the harder it was to keep all the plates spinning in
the air. In 1974 and 1975 profits fell, Geneen may have been able to keep up a relentless place,
but his followers were either unable or unwilling to match it.
Geneen’s efforts to support his company’s share price sometimes strayed outside the boundaries
of acceptable practice. In 1972 America’s Securities and Exchange Commission discovered
$8.7m had been sunk into nefarious and illegal activities around the world. This allegedly
included bribery and colluding with the CIA in an attempt to undermine the Allende government
Geneen stepped down as chief executive in 1977, as chairman in 1979, and as a director four
years later. Geneen carried on working in a number of different companies of his own creation
until his death from a heart attack in 1997.
ITT, however, was a different proposition. Without Geneen to support it the house of cards
collapsed. ITT limped on but eventually, after selling many of the companies acquired by
Geneen, it was split up into three separate companies.
Harold Geneen was one of the last of his breed. He came to power at ITT at the height of the
mania for conglomerates. Size mattered. It’s doubtful if any other CEO in corporate history has
acquired more companies, over 300, with less rationale. Of course acquisition is one way to
grow earnings, but eventually the relentless growth has to stop and increased earnings must
come from existing operations.
In the decade following Geneen’s departure from ITT, the cry from the boardroom was “stick
to the knitting”. Companies slimmed down, shed non-core business and left ITT looking like
a bloated dinosaur. Yet, Geneen deserves his place in the pantheon of business greats. Why?
Because he was the best of his type, the paragon of his age. The king of the conglomerates.
Source: Business Strategy Review, Autumn 2005
"In the business world, everyone is paid in two coins: cash and experience. Take the
experience first; the cash will come later."
"Do you want my one-word secret of happiness -- It's growth -- mental, financial, you name it."
"I don't believe in just ordering people to do things. You have to sort of grab an oar and row
"When you have mastered numbers, you will in fact no longer be reading numbers, any more
than you read words when reading books You will be
"The worst disease which can afflict executives in their work is not, as popularly supposed,
alcoholism; it's egotism."
"You can't run a business or anything else on a theory."
See more famous quotes by Harold S. Geneen
|Wikipedia: Harold Geneen|
for divisions maintaining high degree of financial and other accountability.
company from a medium-sized business with $760 million sales in 1961 into multinational conglomerate with $17 billion
management and other areas. Under Geneen's management, ITT became the archetypal modern multinational conglomerate.
ITT grew primarily through a series of approximately 350 acquisitions and mergers in 80 countries. Some of the largest of
successors, starting with Rand Araskog, steadily sold off parts of the business.
- The worst disease which can afflict executives in their work is not, as popularly supposed, alcoholism; it's egotism.
- You can't run a business or anything else on a theory.
- Leadership is practiced not so much in words as in attitude and in actions.
- The only unforgivable sin in business is to run out of cash.
- In the business world, everyone is paid in two coins: Cash and Experience. Take the experience first. The cash will
- come later.
Harold Geneen wrote and co-authored several books:
- Harold Geneen, with Brent Bowers The Synergy Myth: And Other Ailments Of Business Today, St. Martin's Press,
- ISBN 0-312-14724-4
- Harold Geneen, with Brent Bowers Synergy and Other Lies: Downsizing, Bureaucracy, and Corporate Culture
- Debunked, St. Martin's Press, ISBN 0-312-20080-3
- Harold Geneen, Alvin Moscow Managing, Avon Books, ISBN 0-380-69986-9
- Harold Geneen, Alvin Moscow Alta dirección, Lectorum Pubns Inc, ISBN 84-253-1871-8