Jack Who?

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Immelt jumped a big hurdle in getting the job. Succession is practically papal at GE--Immelt is only the ninth chairman in the company's 123-year history--and a close three-way race emerged among Immelt and two other senior executives, Robert Nardelli, 52, and W. James McNerney Jr., 51. Immelt was the youngest of the three, and the fact that he could serve as CEO for two decades may have nudged him ahead. As for the losers, within weeks they were running FORTUNE 500 companies. Nardelli took over retailer Home Depot, and McNerney now heads 3M, a tech and consumer products company more like GE.

In a sense, Immelt's campaign for the top spot didn't begin until after he won it. Living on airplanes, where he devours mystery novels and biographies (including David McCullough's John Adams), he has crisscrossed the globe to meet with employees, key customers, suppliers and investors, morphing the company's public face from Jack to Jeff in person. "I've used the time to transfer relationships," he says. "It's got to be done retail, face to face, and you've got to keep doing it."

Not all the votes are in, but insiders are blown away by how many employees Immelt seems to know, though he's worked in only three of the company's 10 main businesses and never overseas. "I've seen him under fire and under grace, and his instincts are all right on the button," Welch said from his vacation home on Nantucket, where he's getting in some golf before his much anticipated book, Jack: Straight from the Gut, hits stores next week. "My report card comes out in another five years, when Jeff has taken this company to a whole new level, and people are saying, 'Is that all Jack did?'"

The primary strategic mission for Immelt is to hasten GE's transformation from a low-margin manufacturer to a more lucrative services company that sells solutions as much as stuff. In GE's world there are fewer but bigger customers, so there's a vital need to maximize the relationship--to milk them for all they're worth. GE now gets 70% of revenues from services, compared with about 15% when Welch took over. The bulk of it, however, comes from its giant GE Capital subsidiary, with $370 billion in assets.

Immelt believes that "services are still in their infancy" at many of the company's other divisions. Rather than just sell aircraft engines, for instance, GE can help airlines maintain them, even remotely monitoring performance from the ground while the jets are in the air. Power systems, currently enjoying a $40 billion order backlog, can work with utilities to maximize efficiency and eventually offer forecasting technology to better predict electricity demand. Medical, which Immelt transformed from a $4 billion imaging-equipment vendor into a $7 billion, full-fledged systems provider, not only sells MRI machines to hospitals but also monitors the hardware over the Internet and supplies software to manage billing, create digital patient records and reduce errors. "[Immelt's mandate] is to see 20% to 30% of their revenue come out of intellectual content--software and other information that can enhance productivity," says Nicholas Heymann, analyst at Prudential Securities and a former GE auditor.