Column: CEO Learnings
Power Failure: The Rise and Fall of an American Icon, by William D. Cohen, is an outstanding book that delves deep into the history of General Electric (GE), its transformation into a corporate giant under the leadership of legendary CEO Jack Welch, and its subsequent downfall under his successor, Jeff Immelt.
Page-turner from start to finish
Despite its substantial length of 737 pages, Cohen’s meticulous research and insightful analysis make it a captivating page-turner from start to finish.
Cohen, a former employee of GE’s capital division, brings a unique perspective to the book, having had access and great insights into the inner workings of the company. With his background as an investigative reporter and his three years of dedicated research, Cohen delivers a comprehensive and engaging account of GE’s journey.
Jack Welch, a transformative leader
The book begins by establishing Jack Welch as one of the greatest CEOs of the 20th century, credited with 20 years of consistent earnings and a 
remarkable increase in GE’s market value from $14 to $600 billion.
Welch’s strategic investments in various industries, such as energy, materials science, medical imaging and broadcasting, as well as his ability to groom top-notch executives who went on to lead other companies, set him apart as a transformative leader.
Cohen skillfully explores the qualities that made Welch unique, providing valuable insights for business enthusiasts and aspiring executives.
Jeff Immelt, Jack’s successor
Power Failure not only offers an in-depth analysis of Welch’s tenure but also delves into the management style, key decisions and internal politics of Jeff Immelt during his 16-year reign as CEO.
Immelt’s leadership was marked by a different approach from his predecessor, characterized by indecisiveness and a more intellectual mindset.
Cohen examines Immelt’s attempts to refashion the company by divesting from slower growth, low-tech and non-industrial businesses, and the consequences of those decisions, including the sale of NBC to Comcast and GE’s removal from the prestigious Dow Jones Index.
Contrasting CEO backgrounds and management styles
The author emphasizes the contrasting backgrounds and management styles of Welch and Immelt. Welch, who grew up with a hardscrabble upbringing, was a great motivator, holding people accountable and pushing them beyond their perceived limits.
In contrast, Immelt, who had a privileged upbringing, was seen as indecisive and lacking the action-oriented approach that characterized Welch’s leadership. Cohen paints a vivid picture of the clash between these two leaders and their respective management philosophies.
GE’s challenges, activist investors, 9-11 and Sarbanes-Oxley
Furthermore, the book sheds light on the challenges GE faced, including the impact of an activist investor and external factors such as the events of 9/11 and the introduction of the Sarbanes-Oxley Act.
Cohen explores the role of corporate governance in GE’s collapse, highlighting the importance of training CEOs on governance principles and the
consequences of neglecting this aspect. He also analyzes Immelt’s overpayment for acquisitions, his hubris and the culture of superficial congeniality that permeated the company during his tenure.
This book fills a critical gap in today’s business education
Power Failure fills a critical gap in business education, offering a behind-the-scenes look at the rise and fall of an American corporate icon.
Cohen’s comprehensive research, combined with his ability to present complex information in an accessible manner, makes this book an essential read for anyone with executive ambitions or a keen interest in the corporate world. It not only provides valuable lessons from GE’s history but also serves as a cautionary tale for leaders in any industry.
Outstanding, compelling
William D. Cohen’s Power Failure: The Rise and Fall of an American Icon is an outstanding and compelling book that meticulously examines the history, evolution, and ultimate downfall of General Electric. With his extensive research and insightful analysis, Cohen delivers a must-read for business enthusiasts, MBA students, and anyone interested in the intricacies of corporate leadership and governance.
Listen to my interview with author William Cohen
You can listen to my interview of William Cohen on THE MENTORS RADIO SHOW in which we discuss GE, and the legacies of both Jack Welch and Jeff Immelt. This episode was broadcast worldwide on The Salem Radio Network, iHeartRadio, and Tunein Radio. To listen, go to https://thementorsradio.com/312-power-failure-and-what-we-learned-from-jack-welch-jeff-immelt-and-ges-fall-from-being-americas-greatest-corporation-an-interview-with-william-d-cohan/
RELATED RESOURCES:
- Power Failure: The Rise and Fall of an American Icon – by William D. Cohen
- Power Failure and what we learned from Jack Welch, Jeff Immelt and GE’s fall from being America’s greatest corporation: An Interview with William D. Cohen – engaging interview on The Mentors Radio
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