A mess of an article, focusing on issues 10 years after Jack left. Ignores Jack's big quality push via six sigma and the hands-on work he did to dive deep and fix quality issues at GE during his long career. Jeff Immelt deserves much more blame during this period at GE, but his name won't get the clicks. Jeff was his own man is was not a puppet of Jack, the two hardly talked after Jeff got the top job.
There is plenty of legitimate criticism about Jack and his management style. In fact, the book referenced at the end of the article is a well rounded detailed account of how his management style really did end up long term gutting GE and lead to their decline, but its not wholly ignorant of the facts like this.
I think Jack Welch deserves a share of the blame as well—if you had to attribute GE’s fall to one thing (which you shouldn’t), it would probably be the funding crisis at GE Capital when they couldn’t roll their commercial paper at the height of the GFC. Jack loved GE Capital because it was the perfect cookie jar to reach into when he needed another penny or two of EPS to hit the Street consensus; just realize a capital gain somewhere in Capital, and voila, you’ve met your number again. But of course the article doesn’t discuss the financial crisis at all, or for that matter anything that happened during Jack’s tenure or the first half of Jeff Immelt’s. Or any non-Energy/now Vernova business lines.
It's an interesting thought experiment for how Jack would handle the financial crises. I don't think it would play out in the same way. Maybe I'm too much of a fan boy, but Jack would have seen the writing on the wall far sooner than Jeff and had more time to pivot.
Maybe so, but I think the actual problem was too much of a black swan. There were certainly executives who voiced concerns about the asset side of Capital’s balance sheet and were vindicated in the crisis; Jack might have listened to them better than Jeff did. But I don’t think anyone really even considered the idea that you wouldn’t be able to find buyers for the commercial paper of a AAA-rated issuer pretty much until it was happening.
That said, there were outside commentators who’d raised questions about GE’s liquidity in the 2000s (notably Bill Gross) which did get Immelt and co. to term out some of GE’s debt. Maybe Jack would have been foresighted enough to do more. But that would have hit earnings (you’d pay a higher interest rate on longer term debt), so it would have been a tough sell, I think.
in my experience with six sigma (back at Sun Microsystems) and its various incarnations later it is among the worst things which can happen (though the company has to already be in significant rot to let such parasite in), last nail into the coffin so to say, it is the moment when totally clueless, this time by-design, management - all those six sigma certified belts - overtake the product development and kill whatever last reason and sense that was still there. And that is what article describes happened with GE and Boeing when they got overtaken by such a management. Anyway, the point of the article seems to be not the details of how Jack and his spawn ruined those companies, the point is the climate change related effects of that.
Six sigma's main push in the 80s was to drastically reduce defect count by diving deep into manufacturing processes, the opposite of the quality issues discussed in the article. It sounds like your experience is similar to what happens to a lot of management philosophies when they get popularised into airport books and watered down.
> management philosophies when they get popularised into airport books and watered down.
You’ve just gravely offended all those top consultancies hired by the companies I worked at. Basically you repeating the favorite argument of management consultants - if Scrum isn’t working for you then you’re doing it wrong.
Sat through three weeks of brutal Sun Sigma training back in the day. What a total waste of time and money. Scott lost the plot being hypnotized by JW.
Yeah, I agree. I took a Six Sigma class and somehow a planning class taught by Welch himself back in the late 90's. I really only spent a day with him but I remember him talking a lot about quality. This article feels like a stretch from the tiny bit I know about him.
