Lights Out: Pride, Delusion, and the Fall of General Electric Hardcover – July 21, 2020

I spent 25 years with GE (17 as an executive band employee), and worked at 6 different businesses within the company. I joined one of the company's corporate leadership programs directly from a 4 year tour with the Army - I targeted GE specifically as I was leaving the military and spent 6 months pestering the company for an interview before they agreed to speak with me. When I finally got an offer I just couldn't believe how blessed I was. I am proud of my GE career, and I am grateful for the chances I had to work with high quality people during my time there. It wasn't an easy place to make a career, and the company had a lot of warts, but I found the culture to be mostly inspiring (more under Welch than Immelt) and the opportunities for growth were incredible.Reliving the unraveling of a company I loved was not easy, but I would still recommend this book to anyone wondering what happened. For me, it was a difficult, almost cathartic read. My former GE colleagues, especially the ones who spent many years with GE, will recognize many of the people, events and cultural dynamics the author describes. This book is well researched and well written.

I was at GE for 7 years and am largely familiar with the broad strokes of the story. There were several smaller things in the book that I never knew or had heard of, so I don't regret spending all day reading the Kindle book. The story skipped around jarringly throughout the book, but as former GE I could keep up.It was interesting to hear an account of John Flannery's departure from his side. Jeff Immelt was portrayed as a somewhat clueless but likable jerk in a few spots, and arguably delusional.Insulting Larry Culp's suit size choices seemed unnecessary and petty.My main problem is the book doesn't live up to what I had expected - deep insights into what went wrong and why. The book was mostly shallow coverage of public material, with some small fresh insights from their interviews peppered in.

I purchased the book mainly because I work for the digital operations of one of GE's rivals and many of our leadership are GE alumni.I think the book really fails to show what went wrong at GE (ironically the title is the fall of GE). Authors spent 2/3 of the book talking about GE Capital...that business unit was practically shrunked by mid 2010s and there were much deeper problems at GE than Capital. Authors never discuss Renewables that practically never turned a profit, Transportation that didn't have any sales for years. Briefly talk about Digital which was a huge disaster, mention Power a few times although it was arguably a unit that broke their back. The entire book is about dissing Jeff Immelt, which in no doubt was an incompetent CEO who contributed big time to GE's misery. But for a company with 8 9 business units where all but one or two were in an absolute state of disarray, the problems are far more deeply rooted than a bad CEO in corporate office who is not involved with business units' day to day decisions.The book had a lot of potential to get deep in why things went wrong but so far it's all 'it was Jeff Immelt's fault'.

Having spent 5 years on a GE leadership team, much of what I read in this well-written book rings true. I don’t know if accounting fraud was committed, but from what I’ve witnessed in meetings I wouldn’t be surprised.GE’s sick culture of humiliating people (in front of their peers) for not meeting numbers or making specific sales, regardless of reason, is enough to make anyone consider dishonesty to avoid torture. According to one of bosses (who thought he was one of the contenders to replace Immelt) this culture was largely created by Jack ‘Birther’ Welch. Welch may have made lots of money for the company during his best decade, but he led the company away from core strengths by distracting it with the now discredited financing business and other ridiculous diversions. Welch turned leadership into a cult that Immelt happily continued. I remember being cautioned by two long time senior GE execs never to question Jeff’s opinions. GE’s fall from grace, due to abysmal leadership, was tragically inevitable.

An excellent book that details the fall of GE from when Jack left until Jeff got asked to leave. Heavy on the GE Capital side, it would have been nice if more emphasis was put on Aviation and Power to get a full picture of what really happened.

As an 8 year executive of a business bought by GE, I found this incredibly accurate.

First let me put in context my interest in this book. I am a GE employee, not by choice, but through chance as the company I worked for was taken over 9 years ago (I was a bit disappointed that the takeover was not mentioned in the book, although I guess $3 billion dollars is small fare in this story). As such I lived within some of the story laid out here and for me it is fascinating to see what was going on behind the scenes at board level, since most of that was hidden as mere employees. Fascinating and slightly horrifying that a company with such a reputation as Ge could be so dysfunctional.The book also echoes a lot of what I have learned about GE. The 1st thing you need to know is that there are two world views of GE. In America, GE status is almost mythological. This stems from the 60s and 70s when GE seemed to run American life from jets, power turbines to fridges and toasters. There was not a part of US life that GE did not touch. Not only that but it seemed very good at making money. Under their CEO Jack Welch, growth seemed limitless and the shares were the darling of pension plans offering a safe haven and guaranteed dividends. In the rest of the world however, GE does not have the same status. Yes it has a big presence in the other parts, but it was little known outside the niches.The book starts off with GE history. If you work in GE you are told we are the child of Thomas Edison, the master inventor (in fact if you visit GE research in Niskyuna, you will find Edison's desk preserved in the entrance). However like a lot of the Edison story, this is not really true. As the book sets out, GE was a creation of failed Edison businesses joined together by the banker J.P.Morgan, and Edison had little to actually do with the company. So rather than a industrial company based on the ideals of industrial innovation, it was a company set up by a finance house for industrial domination. That characteristic forms a large part the rest of the story.The story starts with the legendary chairman Jack Welch who set out transforming the company and become a byword for managerial excellence. However hidden under the success story is another one of shady accounting practices, labyrinths of financial deals and opaque structures which were used to maintain the myth of almost infinite growth.As such the industrial side was supported by the rise of behemoth GE capital which tapped the financial instrument market to ensure a steady supply of cash. In doing so its tentacles spread wide to tap new lines of credit with little apparent appreciation of risk. It feels in hindsight that Jack Welch main talent was in timing and being able to ride the wave of fast growing economy while not having to be held into account for the consequences years into the future. I was also a little disappointed that there was little analysis of one of Jack Welch's worst legacy's, a system called stack ranking which rated everyone and the lowest 10% were forced to leave. This system which at the time was lauded, has been shown to be in the long term destructive as it creates a atmosphere of back stabbing and distrust in a business and was widely sited as one of the reasons that Microsoft lost there way in he the 90's. While no longer implemented, its shadow still sets the culture in GE today and may well have been partly to blame for the Ge capital risk taking culture.In 2001, Jeff Immelt took over as CEO. Mr Immelt is a very charismatic character, however his background was sales rather than engineering and he struggled with running a company which was both large and schizophrenic in character. The capital side providing huge dividends, but with large risks while the industrial side being less profitable, but more stable. This came to ahead almost instantly he took over with the aftermath of the 9/11 attacks and the financial fallout meaning that the capital market shrank overnight. In some way Immelt could be considered unlucky, however the aftermath of a charismatic CEO meant that the board was no longer functioning and failed to rein in a CEO with limited experience. This was shown in two episodes.Firstly was one of Immelt's main initiative, the industrial internet.The idea of the industrial internet was the idea of connecting data from industrial sources to generate new industries around that data. In many ways the idea is a valid one, unfortunately the implementation under-estimated the cost and difficulties. As someone who was involved, I can attest to this. Rather than take a evolutionary approach, GE pumped money into it setting up GE software in California to drive it forward. There were two problems with this. Firstly the GE software department tried to do everything from writing the whole industrial stack to creating the entire data infrastructure to store the data. Despite GE's size it was not a software company and just did not have the resources to manage this. Instead it should of created partnerships to piggy back off someone like IBM. Amazon etc. Secondly there was a big ethos clash between the east coast traditional industries and the west coast new technology gurus. One was traditionally conservative (after all you can't have a jet engine fail in the air), while the other was more just try it and see. The lack of direction and misunderstanding of the two philosophies meant that money was being pored in with concrete objective, other than a vague sales slogan.The second was the purchase of Alstom, a large French owned supplier of power generating equipment. Jeff Immelt set his reputation on purchasing this, however to virtually everyone else it seemed a strange purchase. Before becoming part of GE, we had been part of Alstom and we could attest that it was a company with big problems largely propped up by the French government. The more the negotiations went on and the bigger concessions GE had to make, the less sense it made. In fact the French government really out manoeuvred GE by getting GE to take a troubled nationalised industry off their hands and at the same timer guaranteeing no job losses for a long period, something that even now rankles in GE outside France. The fact that the board failed to rein Jeff Immelt in and Immelt himself could not see the issues pointed to a company no longer in full control or good governance.Jeff Imelt's reign came to an end in 2017, and the CEO position was breifly held by John Flannery. However the excesses of the two previous CEO's and the lack of adaption to the changing market had pretty well made it an impossible job. Also some of the risks taken by Capital came back to haunt GE with a huge debt to finance health insurance policies taken out earlier. Also there had been huge investment in both gas turbines and oil production companies. However the rise in renewables had stopped any growth in the former, and the crash in the oil price had severely dented the latter. What Flannery did do however was a well overdue shake up of the board and remove some the excesses like the 2 planes Immelt had used to travel in.My own story in GE, echoes much of this. In many ways I was there at the beginning. I had visited our CEO as part of a program to allow engineers to meet our then CEO. They had to regularly exit the room to take phone calls, and he asked our group whether our company should remain independent. Obviously he could got give details, but in hindsight they were being wooed by GE. And our company had been a success. We had grown to a billion dollar company in 5 years, by being agile, responsive and innovative. However what was stopping us growing was the lack of capital to take on larger projects. Being part of GE seemed to promise us that access.A number of important things changed when we were taken over however. Firstly our CEO had always travelled on his own. The first meeting of our new boss, was when we were bussed to football stadium and he arrived flanked by about 20 flunkeys. The senior management team were sent to a hotel in Dubai, where a video was made of a speech that looked more like a evangelical rally than a conference. Our CEO had setup a system where you could directly ask him a question. While sometimes abused it provided a communication channel to raise issues and queries. This quickly stopped and it became clear that information would flow only from top to bottom. Our head office had been a single floor of a shared office in a industrial suburb of Paris. That apparently did not meet the image of GE, and was moved to a an expensive old building in central Paris. Or so I'm told because no one outside the top team were allowed to visit.More importantly the management structure changed from a pyramid to a matrix. This meant there was no longer any direct decision making responsibility anymore. The management decided that they no longer wanted us to do the systems, but make products. Systems are more difficult to manage, but products require a whole different mindset. We were told that we were to transform GE, but we quickly found that other parts of GE either kept us at arms length because we threatened their jobs, or saw us as an easy sales win as part of the GE to GE program.We had been bought because we were what GE was not, agile Innovative and not risk averse. After spending 3 billion to take us over, they then set about trying to make us more like GE. At the same time, costs were piled on us. GE companies are run more like franchises with each one paying for headquarter's services. So each excess of the board and each corporate jet was paid for by the businesses in a reduced bottom line. Another thing is that our CEO was an ex-engineer. They knew the product as well as the business. In GE, it seems to rise to the top you need to be from either sales of finance. Engineers have a managerial glass ceiling.So back to the book. Generally it gives a fascinating insight into one of the worlds biggest companies and some idea on how it lost its way. Certainly it gave me insights in many of the things that affected me directly as an employee.However I do feel that the authors missed a trick.The GE story is actually an American story. How companies that made things got seduced away into the world of financial instruments. Where making money is mistaken for making wealth. The truth is the GE myth was a much based on sleight of hand that industrial excellent. It was only federal laws such as the Frank Dodds act that stripped away much of the obfuscation and allowed investors to get a true view of what was going on. Those laws however are under attack by the right wing de-regulation lobby who feel that governments should not have companies oversight. It would of been a useful last chapter for the authors to look at the present state of American capitalism and tie to the how it should change to meet the challenges of a rapidly changing world.The GE story is the American story. How a company famous for making everything from toasters to aircraft engines forgot its roots and became an emperor with new clothes. It is a lesson on the dangers of the deification of CEO's, cosy wall street relationships and lack of business transparency. It is a lesson on how companies lose touch with their employees and how to big to fail is not actually a thing. In the end it is a lesson how America industry lost its way

I was very interested to see this book as I have watched from afar to see the collapse of GE. Two writers putting together an account sounded ideal. Looking from my vantage point, the GE Capital story always looked a bit too good to be true but what did I know? The book sets up the Immelt years with a more balanced view of the Welch years highlighting his obvious skills but also highlighting how he did sow the seeds for the eventual collapse. One feels more sympathy for Immelt who comes across as more a tragic character than anything else. The 9/11 attacks coming on his second day as CEO a case in point. Not being able to see the wood for the trees is an obvious flaw but so easy to see how that develops amidst a company so focused on delivering quarterly earnings. Notably strong language in the epilogue on the failure of the board who oversaw it all without really challenging what was going on. Final point, at 340 pages, the book is thorough but I reckon it could have been 240 pages as there is a fair degree of repetition. I concede it's a complicated company with plenty of moving parts and businesses so I can understand that to a point. My only gripe in an otherwise interesting read.

The authors have achived their primary goal, to summarize the history of this great Amrican company, its rise to proeminence under the leadership of Jack Welsch, and its decline in the last 20 years, to its current status, a pale shadow : too much financial risk, too much leverage, too much diversification, too opportunitic in its management, etc. among other sins of conglomerization.BUT the book is also somewhat disappointing : not much beyond a good summary of old pages of the Wall Street Journal, but no new, original insight into the difficulties of good management.

I thought the book was a fascinating read and for a business book an easy read. Perfect for a Christmas present for somebody who enjoys business books. Its tells an interesting story and leaves you with a lot to think about. Even after reading it. Its still hard to tell where it all went wrong for GE. Thats not to say after the read you aren't left with your own opinion of where it went wrong. You are. So if you do like talking about books you read, this one leaves you with lots of topics to explore.

Interesting for past or present GE employees to get an insight into the recent history and decision making at the top of the company.Not many lessons clearly articulated so you have to come to your own conclusions.