Tag: Jack Welch

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.

Book Review: The Man Who Broke Capitalism: How Jack Welch Gutted the Heartland and Crushed the Soul of Corporate America—and How to Undo His Legacy by David Gelles

The Man Who Broke Capitalism: How Jack Welch Gutted the Heartland and Crushed the Soul of Corporate America—and How to Undo His Legacy by David Gelles

My rating: 5 of 5 stars

Best business related book that I have read this year…This book is an indictment of Jack Welch, “welchism” and capitalism in general. Jack Welch is not here to defend himself but the author presents a very compelling narrative supported by numbers that Welch was very overrated as a CEO, role model and strategist.

Welch quelched efforts at innovation, long term planning and corporate responsibility so he can meet or exceed quarterly numbers. Welch’s primary business objectives were to please his stockholders and become very personnaly wealthy.

Very well written book. Interesting stories and business analysis…Good investment of my book purchase…

Notes from the book:

Welch employed three main tools in his crusade: downsizing, dealmaking, and financialization.

Welch developed a new policy, colloquially known as “rank and yank.” Each year, managers rated their employees. Those who were in the bottom 10 percent were let go.

GE stock fell 80 percent in the years after Welch retired, becoming the worst performer in the Dow Jones Industrial Average.

Welchism has at its heart the conviction that companies must prioritize profits for shareholders above all else, that executives are entitled to enormous wealth and minimal accountability, and that everyday employees deserve nothing more than their last paycheck.

From runaway climate change to steep inequality, to hollowed-out communities abandoned by companies seeking cheap labor elsewhere, it can at times seem like corporations do as much harm as they do good.

The chief executive of a major American company now makes in one year what it would take a typical worker in that company 320 years to earn.