For many years, investors loved GE’s stock because the GE management team always “made their numbers”-that is, the company produced earnings per share at least as large as what Wall Street analysts predicted. My first big takeaway is that one of GE’s greatest apparent strengths was actually one of its greatest weaknesses. Gryta and Mann gave me the detailed insight I was looking for into the culture, decisions, and accounting that eventually caught up to GE in a gigantic way. But I got a lot out of reading this book. I wanted to understand what really went wrong and what lessons this story holds for investors, regulators, business leaders, and business students.Īt times, it was a bit hard for me, as a former CEO, to read such harsh criticism of fellow leaders, including people I know and like. ![]() That’s why I was eager to read Lights Out: Pride, Delusion, and the Fall of General Electric, by the Wall Street Journal reporters Thomas Gryta and Ted Mann. I wish I could tell you that I was one of them, but I was just as surprised as most people. Only a few people saw it coming (including one, ironically, from J.P. It’s a textbook case of mismanagement of an overly complex business. It’s also not a case of outright fraud, like Enron. GE’s fall is not the result of innovators developing a better jet engine or wind turbine. In 2018, GE was dropped from the Dow Jones Industrial Average after more than a century in the index. Its share price has fallen precipitously. Its workforce has been hollowed out, from 333,000 employees in 2017 to fewer than 174,000 at the end of last year. ![]() The corporation has come crashing to Earth in one of the greatest downfalls in business history. It turns out that the word “mythic” is the perfect word for GE. When GE started using Microsoft software in our early days, that gave us a huge boost in the market, because GE was such a bellwether company. Its legendary CEO Jack Welch, who wrote five bestselling books on leadership, became a model for an entire generation of executives. Its founding story includes the innovator Thomas Edison and financier J.P. It was at one time the largest, most powerful company in the world.
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