>I am, however, dubious about Jack Welch as a role model. Steve Ballmer's adoption of Welch's employee performance system did more damage to Microsoft than any other single policy I can think of.
I think people can apply something as clear as an equation the wrong way, let alone what a person says. Just because I can't make the maths work doesn't mean mathematics don't work. Maybe I'm just clumsy.
I've become aware of the resentment some people have towards Welch after reading "Winning" (which I liked a lot). I'm not familiar with the controversy, but from what I have seen, Welch is revered by a lot of people too.
It appears GE's valuation increased 4000% when he was at the helm. Though the S&P was +1400% in 2000 with respect to 1980. A bull market.
CEOs ability to impact a large company performance is very limited. Most likely GE's performance is explained by it's history, luck and/or leverage. I also read Welch's books and am not a big fan, pretty standard MBA (though I don't think Jack ever got one), manage by buzzword, process oriented stuff. Still an interesting read but I wouldn't jump to a conclusion that by applying Jack's ideas you are going to get your company to those 4000% valuation increase.
So for one thing correlation does not equate causation.
Steve Jobs was co-founder of Apple, not just a CEO taking on some random company. So Apple was to some extent his creation and he has guided that creation towards some of his goals from the beginning. He had influence on the culture, what kind of people got hired, etc. from day 1. That said luck certainly played a significant role. The economy played a role. He was at the right place at the right time (and more than once at that). At the end of the day you can always back-splain any success story but for every successful Steve Jobs there can be 100 failed Steve Jobs's that didn't have the lucky circumstances and you've never heard of. Our mind likes to believe the "Story" of Steve Jobs but that's us after the fact. Take Steve Jobs to a different company in a different era and the outcome could have been different. He's definitely special in many ways but anyone who has worked for a large company knows there are lots of factors that a CEO is unable to control, most factors for that matter, and there are lots of people who could potentially be just as successful as the CEO that hits gold.
EDIT: So another thought is that there's certainly some value in looking at the success stories and finding commonalities, including qualities of management. But to look at single data point of a successful company and attribute that to some management philosophy (let's say "Six Sigma", or only being in the business that you're #1 at) and then try to take that into a different situations is not science, it's religion. There are people who are very successful (let's say Buffet) or inspiring (let's say Obama) but I don't think any of that boils down to a recipe or guarantees of success. It's just not simple cause and effect. Even though we want to believe otherwise...
>I wouldn't jump to a conclusion that by applying Jack's ideas you are going to get your company to those 4000% valuation increase.
The reason I mentioned the raging bull S&P (+1400℅) during Welch's tenure and the reason I added the S&P chart was precisely to suggest the possibility of correlation and looking at the performance of each within the context they inherited the company.
The point I was making is that the controversy around Jack Welch as a person has no effect on what you can learn from him as a brain. Imagine if people wouldn't read Mein Kampf because Hitler was "not nice".
Now, you are warning people that there's no direct cause to effect relationship between the advice in the book and the 4000℅.. Is that warranted, though? That would probably be named "cargo cult reading".
I think people can apply something as clear as an equation the wrong way, let alone what a person says. Just because I can't make the maths work doesn't mean mathematics don't work. Maybe I'm just clumsy.
I've become aware of the resentment some people have towards Welch after reading "Winning" (which I liked a lot). I'm not familiar with the controversy, but from what I have seen, Welch is revered by a lot of people too.
It appears GE's valuation increased 4000% when he was at the helm. Though the S&P was +1400% in 2000 with respect to 1980. A bull market.
Here's GE under Welch during the boom:
https://www.dropbox.com/s/v4hgl8zpzrtg34k/Welch_GE_SP.png?dl...
Here's GE from 2001 when he left (dealing with two crashes must have been terrible for Immelt):
https://www.dropbox.com/s/k6gk4vztyzvxnp0/GE_2001_2016.png?d...