Power Failure: The Rise and Fall of an American Icon (Book Review)

Summary: Written by William D. Cohan, this book chronicles the birth and demise of General Electric. The author focuses specifically on the CEO administrations of Jack Welch and his successor, Jeff Immelt. GE was the premier American business model in the 20th century. With operations worldwide and a diverse line of operations and businesses, GE was a business powerhouse and the CEO title there was competitively sought.

This book read like a novel. Greed, hubris, deception, scandal, paybacks and crime were found at the highest ranks of the company. Did Jack Welch “cook the books” to satisfy his promise of reaching quarterly earning projections? It appears he did utilize assets from GE Capital when there were operation shortfalls. Welch laid off tens if not hundreds of thousands of employees. He closed business lines that had operated successfully for decades. Business operations, employees and products were chess pieces for GE CEOs.

Welch more than Immelt had the respect of GE employees and certainly senior management of the corporation. Welch personally managed the careers of many of the men who moved up in the organization. Welch also listened to objections to his thinking, something that Immelt refused to do.

Both Welch and Immelt made poor business decisions. There were businesses and companies that each man should not have merged with or purchased. Immelt generally did not solicit comments or potential objections from his senior officers before a major business decision. This was a major cause in his downfall and GE’s fortunes.

Welch was a complex figure. His loyalty to men who worked for him did not extend to women he married. He appeared to find solace with his third wife, Susie.

Cohan spent time within the book describing the personalities and lifestyles of not only Welch and Immelt but other men of ambition and power in the GE organization. How GE did or did not develop a succession plan for their next CEO is a topic worthy of study by MBA classes.

Rating: ★★★★★

One of the best business books that I have read.