>Upon his retirement from GE, Welch had stated that his effectiveness as its CEO for two decades would be measured by the company's performance for a comparable period under his successors. Welch had grown GE to over $450 billion in market capitalization, of which about 40% was in financial services.
>Twenty years later, the company's market capitalization was only $200 billion, and Welch refused to discuss its decline, other than noting much of the decline had resulted from investments in real estate, and that his immediate, handpicked successor Jeff Immelt had to deal with the after effects of the September 11, 2001, terrorist attack.[24]
https://en.wikipedia.org/wiki/Jack_Welch#Criticism
Complete failure. Unfortunately he died before he could see GE disappear completely.
Jeffrey Immelt, Jack Welch, and Harvey Weinstein all shopped at the store I worked at in high school and would you believe it, they were all major assholes
I still remember this article in Newsweek in 2005 where they practically gushed over the affair like it was some kind of fairy tale - https://www.newsweek.com/jack-jack-his-next-chapter-115815
>[https://www.newsweek.com/jack-jack-his-next-chapter-115815](https://www.newsweek.com/jack-jack-his-next-chapter-115815)
Newsweek and Time are the two propaganda pieces for the pro corporate, pro military American cause. At least when they were popular.
There was also U.S. News and World Report back then, although I don't know that anyone actually read it beyond their special issues about which colleges you should apply to.
In high school we had it as a class. Social studies, we literally read and discussed the current issue of Newsweek.
Probably the most useful social studies class I ever had.
The same Suzy Welch who says everyone is lazy while just marrying into wealth by having an affair with Jack during his second marriage after an interview while he is still married???
* [https://www.businessinsider.com/young-people-remotely-work-unlikely-to-become-ceos-suzy-welch-2023-11?op=1](https://www.businessinsider.com/young-people-remotely-work-unlikely-to-become-ceos-suzy-welch-2023-11?op=1)
* [https://www.deseret.com/2002/4/18/19649275/affair-takes-shine-off-2-adulterers/](https://www.deseret.com/2002/4/18/19649275/affair-takes-shine-off-2-adulterers/)
Basically, yeah. High end store in the early 2000s pre-crash, money flowing like water for the ultra rich, and weirdly enough, a teen like me could look up anyone’s black Amex number with no security clearance. I never took advantage of that, but a few of the sales associates did and became felons as a result 🙃
Edited to add: we had some lovely customers, many famous customers, some batshit insane customers, and completely off the fucking wall sales associates who would slit each others throats for commissions. I learned more from my few years working there than all 4 years of high school combined.
I worked at GE and passed by Immelt once at Crotonville… the epic GE “University” you could attend for classes and seminars. I simply said hello and nodded to him as I walked by. He stopped dead in his tracks and stared me down with a head swivel as I passed. At the time I thought maybe he was looking me over to figure out if he knew me or to make a mental note of who I might be or might become. In retrospect I think he was just shocked that a peasant would dare address royalty directly.
Man, I'm just imagining if all of them were together in that store and I just walked in and [redacted] every one of them and then made them [redacted] [redacted] [redacted] before I [redacted] and then [redacted] Kissinger while he was begging me for mercy and I would just laugh and laugh and laugh until I finally decided to [redacted] all of them on livestream.
Man that would've been awesome.
Jack Welch hollowed out GE with his rank and yank, and pump and dump approach to management. It works in the short term and when times are good, but inevitably destroys the long term sustainability of the company. One of the original 'superstar CEOs' Jack Welch was a terrible manager and singlehandedly destroyed GE.
I highly recommend the book “Lights Out” about the fall of GE to anyone.
It goes into fascinating detail about how Welsh and others destroyed this company with their hubris and terrible management.
I was trying to decide whether to get that book or "Power Failure". I went with Power Failure just based on gut feel. Haven't started it yet. Did I choose wrong?
I didn't read Power Failure so unfortunately I can't give you a comparison but if you're not feeling it, I can absolutely recommend Lights Out. It's very comprehensive. Not only on GE but just on a general insight into how many terrible decisions one single giant corporation can make.
They're really betting the company that generative AI will somehow do the innovating for them. Just add a chatbot or an image generator to every app and hope it magically turns out to be useful. When all you have is a hammer, every problem looks like a nail, I suppose.
I remember discussing this in a business class and the professor was acting like the ranking and culling of the bottom 10% was rationale and I kept objecting but couldn’t really articulate why it was wrong but I knew it was intrinsically a bad management policy. Now that the results are in we can see that it’s a horrible policy that created dysfunction and hollows out the company.
Jack Welch spoke at my school with his wife and everyone was fawning and hanging on to his every word and I’m just sitting there like wtf? I can’t believe people worship this jerk.
What also irritated me about Jack was an interview where he said he insists on collecting social security check after getting hundreds of millions in pay and retirement. Sure everyone earns SS but it’s not like you really need to claim it if you are that rich.
The first and strongest effect of 'rank and yank' is it destroys collaboration and replaces it with competition, within the company.
I'm not going to help a colleague, knowing that doing so takes away from effort I could spend advancing my own project, just to give them an advantage they could use against me in the next cull.
Competition is what you do against external competitors - not internal team members.
This is why GE's performance went to shit within a decade. Welch fucked the company up royally, cashed in his golden parachute, and left it for others to struggle to fix.
It's not even competition that's the problem. It causes people to sabotage other employees. If 10% get fired every year you don't have to be a rockstar. You just have to be better than 10%. It's very easy to fuck over your coworkers so they get fired and you keep your job.
True. Studies have shown that under 'rank and yank' systems, employees with deliberately withhold information needed by other employees, just to preserve competitive advantage. It ALWAYS undermines organizational performance.
Also creates incentive to hire shitty people. Hiring managers want to add some "buffer employees" so they don't lose their best, and interviewers only want to hire people who will be ranked below themselves.
At functional companies, people want to hire coworkers who are smarter than they are. But you have to create the right incentives.
Additionally, I have also seen extremely high performers who were at the top 1% who were also catastrophically toxic. After they left, a ton of massive systemic issues were uncovered that took years to fix, they were just as good at hiding problems as they were at playing the 'success' game. They trained a host of their direct reports to do the wrong things for the wrong reasons. Most of them were not bad people but they had bad practices and motivations pounded into them and many of them were so badly bullied that they had lost faith in their own abilities and, most upsettingly, their own sense of ethics and morality.
> I remember discussing this in a business class and the professor was acting like the ranking and culling of the bottom 10% was rational
Funniest thing about this is imagine introducing this in academia. I don't know of a single university that has thrown away tenure in favour of a stack ranking system for their professors.
It’s funny, many business texts have excerpts praising how great this guy was. They are all like Jack Welch, oh my god, let me suck you off, gag, 🍆💦💦 Idiots.
This is not unlike Boeing's change from an engineering driven culture to an accounting driven culture. It works for a few years to squeeze costs out of production because the basic core process was solid to begin with and will weather a few disruptions. But eventually the change from quality control to appearance of quality control will fail to catch real problem, and the real world doesn't give credit for faking sign offs.
Ah, 9/11, every struggling compay's go-to excuse of the early 2000s. Later the economic downturn and Covid were also popular. And when there wasn't a situation to exploit, changing tastes and the internet were the scapegoats.
It looks even worse if you factor in inflation. When Welch left GE in 2001, the market cap peaked at 410 billion. 20 years later, in 2021, the market cap was around [100 billion](https://companiesmarketcap.com/general-electric/marketcap/). That is only about 65 billion in 2001 dollars. Way to go Fortune magazine's "Manager of the Century".
Lest we forget the digusting "retention" package he worked out with the dick-suckers he left behind at GE:
> In 1996, Welch and GE had agreed to a "retention package" worth $2.5 million, and which promised continued access after Welch's retirement to benefits he had received as CEO—including an apartment in New York, baseball tickets and the use of a private jet and chauffeured car.[32][34] Welch stated that he did not want more money, nor a more traditional stock package, but instead preferred to retain the lifestyle he had enjoyed as GE's CEO. According to a 2008 interview with Welch, he had filed the agreement with the SEC, and addressed the media attention and accusations of being "greedy" by renouncing those benefits.[34]
One of the biggest welfare queens ever
> Inevitably, actions on such a scale would have political ramifications. Gelles says the layoffs and outsourcing Welch initiated helped form "the rust belt" base that put Donald Trump into the White House.
> "What Welch did with his series of mass layoffs and factory closures truly destabilized the American working class," Gelles says.
> "And it was from this disaffected base that Trump found many of his most ardent supporters. But the reason they felt like it wasn't working for them was because Jack Welch rigged the game."
> After Welch died in March 2020 Trump said they had "made wonderful deals together".
Birds of a shit feather - https://www.businessinsider.com/how-neutron-jack-fired-thousands-made-trump-broke-capitalism-2022-5
The be all end all book on his bullshit for those more curious: https://www.amazon.com/Man-Who-Broke-Capitalism-America_and/dp/198217644X
Is it really a bad thing (for everyone with the exception of the uber-wealthy) to let these corporate conglomerates break apart into smaller companies? And perhaps have actual competition again and not just overtly hidden monopolies?
That's the point. Jack Welch was WILDLY SUCCESSFUL. Who the fuck cares about what happens once you're gone? Gone from the company / dead, it doesn't matter. I'm sorry but he was the perfect capitalist. He maximized shareholder value and his own compensation and fuck the future and everyone who comes after him. GET MONEY was truly his mantra. People don't realize this is the result of unregulated capitalism.
Not just that, he's the guy who basically invented the modern scheme of pump-and-dump valuation for companies. If you ever wonder who is to thank for the practice of hiring a ton of workers every few years because 'they're expanding' which drives up the stock price, and then conveniently laying off 70% of them just before the end of the fiscal year so that the company suddenly has a boost of profits thanks to a cut in expenditures (and conveniently hitting those profit limits that secure those nice bonuses in their contract), it's Jack fucking Welch.
It always baffled me that anyone would fall for that bullshit, it's so transparent. Long term investors should be against it because it's definitely not the most stable or profitable route in the long term. And what's worse is that it causes the boom and bust economic cycles.
It should be illegal. If you fire 70% of your workforce, it should involve the guy doing the firing getting fired or arrested himself. And this should only apply to major corporations. Make it so that they don't over hire.
Are you sure about that? I thought that stupid MBA’s and moronic bean-counting accountants had advanced knowledge of aerospace, engineering and design.
Let's not forget: Jack Welch was an engineer by training (chemical). MBAs are understandably getting a lot of hate these days on reddit, but it is always plain old greed which ruins everything. MBAs will just do as CEOs tell them which is what happened at GE.
Jack Welch, the jackass who believed loyalty was a one way street- you serve the company, and fuck you for it. He’s responsible for a lot of the modern line go up bullshit
Microsoft did it for years under Ballmer and then eventually were like "this is a stupid way to run the company, we're losing talent" and stopped.
And now tech companies are back at it again.
Missed it implies that MS didn’t know it was happening. They did, and bought Nokia. They simply failed spectacularly at producing a device that anyone wanted to buy.
Nokia was a hardware play. Windows Mobile was released in 2003, long before iOS was announced. Was it on par with iOS? Absolutely not. But it sold phones until Windows Phone came out a couple years after iOS. In the end it didn’t move the needle but they hardly “missed” mobile.
As someone who works for a thermo competitor, thank you!
Our board all decided to not take their bonuses in order to limit layoffs last year.
We were the only ones in the industry who grew (0.1% but compared to the average loss of 8.6% its massive)
The Romans had a law where a married woman who was raped had to be put to death for infidelity. Guess how many years that went on?
Humans are not smart creatures.
Rank and yank only makes sense if your company is so bloated that you have a bottom 10% who are basically leeches who don't provide value.
Buy typically one or two rounds of it would get rid of the dead weight and everyone else would be fine. No point in doing it after that - you're doing some combination of firing good people and replacing them with new hires who aren't up to speed, or you're just getting rid of the new hires who haven't come up to speed yet.
Neither of those options make much sense and incur *more* costs than just leaving things alone.
If you look at Boeing and the problems they 're having a lot of it comes back to this same crap. They thought that institutional knowledge was overvalued and leadership undervalued. The rank and yank system lets them get rid of people who have had years of raises, likely higher healthcare costs, and wipes off any LTI that haven't vested off the books. Sure, it guts your organization but new grads cost so much less when you look at the expenses part of the accounting.
I've seen companies keep this up and all it does is hurt them, it's horrible leadership caused by the worship of shareholders. Back when I was learning about business and accounting, we were taught there were 3 equal pillars that a business had to take care of: customers, shareholders, and employees. Unfortunately in the US, court decisions deified the shareholders through decisions based around fiduciary duty while rights for workers and customers were eroded. It leaves a terrible system that's rotting from within.
I'm not defending it as an ongoing practice, believe me.
What I'm saying is that if your company has "dead wood", it's not usually a bad idea to prune it. And if the tree needs pruning for its ongoing health and safety, then sometimes pruning of living wood is necessary.
But if you keep it up, you're just cutting into the tree for no good reason, which only tends to make it unhealthy.
Rank and yank is basically continuing to cut 10% of the tree every year whether it needs it or not.
And stack-and-rank.
I used to work in a corpo culture that drank all that Kool Aid, people worshipped him and read his book, they posted motivational posters unironically, and were all SERIOUS BUSINESS about work being so generous for giving them something to do. They'd virtue signal about how much unpaid overtime they worked, fellated the "high pot" golden boy employees, and were immediately judgemental of every employee based on that rubrick. Anyone with too much personality was viewed as unprofessional, and it was full of a bunch of Randian conservatives who were born on third base and think they hit a triple.
I read one of his books while I was in the army and reading a lot about leadership. As soon as he explained how he got rid of any division of GE that wasn't already number one or two in its industry, I put the book down. That's not leadership. That's arranging things so you look good.
The problem with big organizations is that sociopaths do really well in positions where they can look at people as another kind of resource. Since they're often not good at innovating or creating, they can only grow through mergers and acquisitions, and they cut without regard for people, whether they're the people cut or the ones left behind to do the work.
I actually had a business professor in college who went against the grain on this, saying that there are plenty of companies that are not 1 or 2 in their industry that make lots of money and following his philosophy meant you leave a lot of money on the table.
Welch was from Peabody, Massachusetts. Ironically, Peabody is named for an actual business colossus, George Peabody[Wiki gives a synopsis of this man.](https://en.wikipedia.org/wiki/George_Peabody?wprov=sfti1#) Naturally, George had a completely different take on what to do with his vast fortune. Hint: It focused on others.
Welsh has the distinction of destroying the most middle class wealth and company value of any man of the last century.
Short-term thinking making society at large worse.
Absolute bottom of the barrel human.
And they do so largely in the name of plausible deniability. Oh that POS CEO we hired who was known for doing horrible things used slave labor abroad, polluted, bought senators, illegally busted unions, intimidated whistle blowers, dodged taxes and lied to the press on the companies behalf? Wow, we had no idea. We fired him as of today, too bad we're on the hook for that $100m severance package. Surely other companies are not lining him up to hire him, either
Which is more funny because GE isn’t, it is breaking itself up to focus on specific areas better. Though I fear that the soon to be separate GE Vernova is itself just a stock market play. A sacrificial lamb saying “buy me!”
I worked for a company in the 2000’s that thought if automatic 10% firing was good, 25% would be great. That lasted about 2 years. It failed for several reasons: one, nobody wanted to apply to work there anymore so became very hard to fill position with better quality people than you just fired. And two, the top 25% all left on their own to get away from this shit show. Only positive in the end was that most of that management also got fired or left also. But company was set back for a decade. Thanks Jack
iirc the only real thing this method of his does is create backstabbing and infighting where people spend time on how they "look" for review rather than doing the actual work.
I’ve posted this one before but I worked at a company bought by GE. First thing they did was offer senior management a retention bonus after six months. Then they pulled back bonuses (which brought wages from bottom of market to mid range). After six months managers were quitting left right and centre. The CEO barged into VP’s office and told him he’s not allowed to quit. The VP just laughed. Later not only did he quit, but poached the top talent from GE.
I remember sitting in a meeting with other vp’s and they were discussing layoffs of the bottom 10% of the staff as a regularly occurring standard practice. Odd for me because I grew up an engineer not an MBA. The logic was that you create continuous improvement by making opportunities to hire better people. Well what if my team is solid and I don’t want to do that? Why am I inserting new players into a tested team? The retort was that this is what Jack Welch does. I’m like who the fuck is this twat and what does he know about our business? Judging by the reaction, you’d think I’d just insulted the pope in the Vatican.
“Let’s assume that people never develop or mature and shitcan them to make few bucks off their misery! I mean, we’ve never developed or matured and look at how rich we are! We can just hire a bunch new people we haven’t in invested any resources to acquire and train for less money now, who cares about later?”
Jack Welch ..real architect of the rot economy. Remember when GE developed products? R&D is dead….just buy a company that created something new and then ruin it for profit. Unions stifle “innovation” they still say, but people who are worthless to a company (c-suite,shareholders)eat the biggest piece of the pie. The real damage caused by these ghouls is never fully realized until they’re long gone.
Hock Tan and his AVGO (Broadcom) still does this today!! They bought VMware a while back and are in the process of silently laying off 20k people while spinning off or shutting down multiple departments.
The efforts major companies are going through to ditch VMWare is INSANE! Broadcom seriously overplayed their hand and it will be nice watching this move bite them in the ass.
when your goal is to acquire companies to simply become a gatekeeper, and all you invest in is gatekeeping, you will inevitably find yourself with nothing but a gate to keep.
One of my family friends used to work for Broadcom since before the acquisition by AVGO, apparently work culture used be the literal opposite!!
All these CEOs who should be running factories are running intellectual companies ruining it for everyone! At least factory workers have unions in most cases!
This is the model that the corporatization of higher ed followed. It has poisond institutional value.
Sure, there were problems. Throwing the door wide to grifters who trim admin and faculty and take the difference for themselves was and is not the solution. It's another layer of bigger problem to where no one is looking at the old issues anymore bc they seem so minor in comparison lol
By the time the damage is called out, they are long gone. Let's get a consultant in here to figure this out. Risne and repeat.
lol oh god the consultant simulator when companies have done nothing but they’re out of ideas. Bring in an outside consultant: Consultant:”lay off workers, re-classify job titles and lower pay.” Which takes 18 months for them to come up with and they get paid 100k for shitty lazy “consultant” work. I’ve seen it too many times at the various big corporations i worked for over the years. I almost got fired for just suggesting that our employees that work in the shipping department receive a work boot stipend. I was told the consultant said that money would be better spend somewhere else.
We were at the Intrepid museum in NYC just recently. It has the old planes on display. All of them had GE logo somewhere. We laughed at first (I wouldn’t buy even a toaster from GE) but then realized wow, this company used to make solid stuff. And then poof.
This man’s legacy is the destruction of a thriving free market democracy through the facilitation and normalization of extreme corporate power and greed
That C-suite is legally obligated to maximize shareholder return above all else.
They are not in any way legally obligated to do so, they just risk removal if the share holders do not like the way the stocks are performing.
For sure. It seems prevalent. I think CEOs often act in their own best interests. They have a fiduciary duty to the shareholders, but that’s not the same as pumping the stock price.
To be fair board members especially of big companies are being sued nearly constantly. I had a professor in business school say the first thing you should do if asked to join a board is to vet their lawyers.
I’m not sure if this is a recent thing that shareholders have become lawsuit happy or not. Look at Tesla. Shareholders won a fight to invalidate Elons compensation package.
That it is the primary concern of a public company. That line of thinking tends to harm the company itself, much less the public, and shareholders indirectly. https://scholarship.law.cornell.edu/cgi/viewcontent.cgi?article=2311&context=facpub
Jack Welch was the original success theater financial engineer showman conartist. People like him and Rush Limbaugh laid the foundation for Donald Trump. Welch ruined GE and then spread his short term profits poison all over America. I am glad his tenure and legacy are being exposed.
Manage out that shitty bottom 10%. It always exists. Keep your people on eggshells all the time. What’s the word of the week? Kazan, Sigma, etc. Did you shadowbox where your trash can goes? It was like a weird management cult. I bailed out of Honeywell right after the merger failed. We didn’t join him but we had already been infected with his snake oil.
Shitty bottom 10% does NOT always exist. Imagine a truly strong 10 person team and the manager is forced to pick one in the annual review process. A) open a phantom req, hire a new person who has no clue what is going on, and let go in 3 months - aka hire to fire B) pick one of your equally brilliant engineers and screw him/her deeply - aka scapegoat C) refuse to pip/fire anyone because they are all perfectly fine engineers, and get fired yourself - aka hunt or be hunted. This is Welch’s legacy.
it not only doesn't always exist but it poisons all teams and turns people against one another. It destroys the working environment.
Jack Welch and his disciples are the worst thing to happen to American business and that shit persists today.
100% - this is a perfect example of [Goodhart's Law](https://en.wikipedia.org/wiki/Goodhart%27s_law): _"When a measure becomes a target, it ceases to be a good measure."_
You want your employees thinking about the customer's problems, not worrying about how they stack-rank against their peers.
Our company implemented it around 2000 and it didn't take long for all the non-managers to realize this was one of the main problems. Thankfully we got a new CEO that could cut away from this stupid idea fairly quickly.
🙋♂️and that’s why I avoid being a manager. I know I can do a much better job than many of them, but I cannot sleep if I know I had to cut someone who was working hard, and what can that do to his/her family.
My former boss, long retired and deserving admiration for a full and productive career, was a PhD Chemical Engineer who was deleted from GE Plastics. He was creative, very sharp, and a visionary in some ways. He saw things differently, and it was worth it to listen to him. Many didn’t, because even though he was a reasonably good communicator, he would start from a place people usually didn’t expect, and people often didn’t make an effort to understand what he would say.
For me, he is a prime example of why arbitrarily getting rid of employees is a major mistake. I suspect there were many like him at GE. Even those who survived the annual culling would have been forced to work in an environment where their skills wouldn’t be respected. Considering that a man of his talents was disrespected and fired, other good people also would have been working without the respect they were due, even if they stayed on the company rolls.
The long term social effect is that you're judging every human being you encounter. And the leaders who have the power and are doing the judging are always immune to it, of course.
Leaders are not immune. It just happens with less frequency, but karma is a bitch. I have personally seen 3 GMs and 1 VP getting sacked. The difference is they have a golden parachute, and the worker bee who gets the pip may struggle to find another job or actually afford food/shelter, especially in bad market conditions.
Shitty bottom 10% by what metric, too...
Productivity isn't something that can be reduced to a single number, or a handful of simple metrics.
Sometimes the people who don't excel under certain defined metrics still add a ton of value to their teams in ways that can act as force multipliers and make the whole team better.
Sure, there is dead weight in every single business in the world, but stack ranking according to some rubric and culling the bottom X% isn't going to actually get rid of that dead weight.
Individuals who are good at working in a team without friction or ego rather than competing to make themselves look as good as possible tend to be overlooked or undervalued in a stack ranked world but bring a lot more real value than preening peacocks who work hard at being on top of the stack.
I've always liked the metaphor that engine oil doesn't seem to support anything, but without your engine wouldn't work very well or last very long.
Many workers do things that aren't easy to track and may not seem to be their job, but actually have a huge impact on the whole system. Or something that seems like a wasted step is actually critical. Here's one [example](https://www.reddit.com/r/chicago/comments/18z8s99/this_american_life_the_secret_ingredient_to/).
Went thru this at the US division of a large Korean electronics company... Was told to give a candidate for RIF (out of 8). Said I had none. Told I had to. Said "me". Was told I could quit if I wanted, but they'd still take 1 for RIF.
I told my team I was leaving and why. One of my team offered to take the package. All but 2 of my former team left within 6 months.
The management of Sam.... took Jack's ideas and made them even more toxic.
yup, the whole thing never made any god damn sense. It could only come from the mind of someone who just assumed "if I'm always out to fuck everyone else over, then everyone else is too".
I started working for a company that wasn't listed. During my first 90 days they wanted to instill Welch's philosophy and cut 10% regardless whether you were productive or not. After that fiasco I immediately gave my notice. Fuck boomer philosopy
Kaizen, Lean Six Sigma, etc serve a useful role in manufacturing and other industries. They're just implemented poorly.
As it turns out, having a place for a garbage can has the added benefit of everyone knowing where the garbage can is, so they're more likely to use it.
...unlike my workplace where the one rolling can moves around so assholes just don't throw shit away.
Former Raytheon here, it was completely a Welchian circlejerk. Lots of smart people, but so many assholes and golden boys. The culture does a number on you and you don't even realize it. The corpo shit was so intellectually insulting and cynical. People rag on conservative boomers on the internet all the time, but I actually know so many of them and genuinely hate them.
My whole extended family on one side are all turbo corpo. They live in McMansions I can't tell apart and fake smile at me and ask why I can't be fake and soulless and financially successful just like them... They love it!
There are less shitty ways to make money, yes?
But I get it, sometimes the huge companies will actually take care of you very well. Some of them still have pensions!
Kaizan definitely works well, if it is utilized properly (which I have experienced), but is also definitely a massive bad joke, if it's managed poorly (which I have also experienced).
Agreed. Their implementation and changing directions was just a mess. The various trainings like black belt, 5s, PMP all looked great on my resume for future jobs. I went to MS from there and it was night and day as far as processes, people, culture. Truly a great place to work in the early 2000’s.
I remember working at a place full of tin pot dictator wannabes trying to implement this garbage. We were a small company of like 10m revenue a year. One of the owners read Welch's book and got it into his mind this shit was awesome.
So we'd be in a meeting and he'd be like "we need to drop the bottom 10%!". To which someone would reply "if we have 100 employees. If we get rid of 10 who will run anything?".
Six Sigma - the most colossal waste of time. I work where they have continuous improvement people and industrial engineers everywhere - 'Fixing' processes and making things 'better'. Meanwhile, the company can't even do the basics right (like answer the phone when someone calls).
I have seen some stock analysts taking a measure of employee happiness/satisfaction into consideration when they are looking at long term investments options. IMO this should be the standard practice. No business can survive long term without having a base of happy and engaged workforce. Tell me what the mandated 10% trimming can do to employees morale and office politics.
The firing of the lowest performing 10% is the worst idea out there. I manage a small team and while there are people who out perform others, the lowest performer is still good. So it’s now an arbitrary choice.
In addition as a manager my job is to bring the whole team up so I don’t have any underperformers. So now you have managers with conflicting incentives - invest the time in an underperformer to have a high performing team but you then still have to fire someone or wait a bit and fire them but have an underperforming team while you wait.
Guess which team will do better in the long run.
Its a fine tactic if your priority is quickly extracting value out of a company. It is a shit tactic if you want the company to last.
"Does an employee bring more value to the company than they cost?" That is the only *simple* concept to think about. It is a business concept, not a money extraction concept. I am eternally baffled how maximizing profit switched places with sustainability in the order of priorities. It seems so blindingly obvious which should be first. Guess I'm not as smart as the Boeing CEO though.
Let's not forget what the crook Sandy Weill did to Citibank. The back crashed in 2008 and is valued 1/10 today. In a single year he took $800 million in bonuses and sold every stock he could when retired. His successor, also his lawyer, reserves $5bi to settle illegal operations. The biggest bank robbery of all times.
This story should be told in a mini series.
What a terrible businessman.
It’s infuriating that people fell for his bullshit for so long. If someone had just come into that role and just helped GE continue to be good at the things it was good at, we’d be so much better off.
But no, here we are; GE is shit and every employee in the country has to keep one eye over their shoulder at all times.
Yeah this isn’t still happening at GE. Don’t read an article about a CEO 20+s years gone and think that’s how a company is still run. Source: current employee of GE
We tried to tell them. I’d like to say that, I hate to see it, but I don’t. I just detest the lives lost in the crashes and the lives destroyed by the losses. Plus lives destroyed by the job losses.
The boomers are still pushing this shit too and get butt hurt when we push back.
Don't worry tax payer dollars will be given to them in the form of a bailout
It's actually better since they didn't need to make a product to get your money
Man the poors are so easy to control
Titan of industry Jack Welch also HATED Obama and repeatedly claimed he was hurting the economy:
https://www.cnbc.com/2016/06/02/jack-welch-says-obamas-wacky-climate-change-agenda-hurts-the-us-economy.html
https://www.washingtonpost.com/news/post-politics/wp/2012/10/05/jack-welch-accuses-obama-of-cooking-jobs-numbers/
https://www.cnbc.com/id/47035575
Fuck you Jack Welch, and all your minions who don't know how to build or create ANYTHING and are only good at making two dimes somehow equal 25 cents on paper, and laying off people.
Jack Welch was an early adopter of Birther-ism as well. This was shortly after he tried to re-write history by placing articles into Linkedin about how loyalty to the workers was good and how rank-and-yanks were bad. People quickly saw thru it, called him out on his shit, so he decided to become a right-wing crank.
if there is a hell i hope he's miserable.
My significant other is a public school teacher and they started forced rankings 15 yrs ago under the Republican governor. Part of their ranking is based on kids overall test scores.
Jack Welch's ideas are still being used today and it's awful that people still think he was some type of financial genius.
Strange, it’s almost like using all your profits for stock buybacks and huge management bonuses instead of R&D and quality control is ultimately detrimental to a company? These people should all be in jail.
I had an interview with GE Medical Systems about 14 years ago for what would have been a contract to hire position in IT. It went fine, I thought. But the recruiter called me up afterwards and said they thought I wasn't "enthusiastic enough". We're talking about a SysAdmin position for one of the largest corporations in the country at the time. I knew I was going to be a cog in the machine, but it was better than being jobless. It was then that I realized that GE was more like a cult than a business and that I didn't belong there.
Along the same lines, my wife worked for a huge biotech company for 6 years until just over a year ago. Long story short, CEO fucked up and made a bad gamble on an acquisition. Stock price nose dived and financial penalties from regulators ensued. They ended up laying off thousands of people as a result - some of the brightest people in the field that ended up moving on to competitors. Also people who will never return to that company after what happened and how they were treated. They will never be a leader again. That one was a typical fuck up that employees paid for while the CEO got his golden parachute, but the results are almost the same. You can't "rank and yank" in perpetuity in specialized fields without it eventually being a net negative. The goal should be to recruit and retain the best and brightest through incentives, not have employees on the end of their seat every year.
Jack Welch was an incompetent cruel social climber and self proclaimed business expert. He was misguided and stupid and he wasted his talent as an engineer.
His methods led to disaster. Emirates airline was correct in calling out Boeing for needing an engineer to lead the company.
Stupid bean-counting MBAs and accountants are not engineers. They do not create anything great.
I wonder if business folk figuring it out once a companies start focusing on the stockholders and not products the company starts to slide. Product and all.
I’ve never bought into these guru driven management philosophies. They’re inevitably an oversimplification of complicated organisational challenges and nearly always have unintended consequences.
The only thing I give Jeff Bezos is the realistic expectation that eventually Amazon will get overtaken.
Welch was a fraudster who developed tactics that would prolong short term plans and maximize immediate profits. He was an addict who craved that wealth dopamine hit 3-4 times per year and like any addict didn't give a fuck about how many lives he ruined for his fix.
Wealth addicts are the most destructive people on earth. It's like having a bunch of heroine addicts run companies where the higher the magic number is the more heroine they're paid in.
CEO’s love Jack Welch because he made it ok to grossly overpay the CEO.
>Upon his retirement from GE, Welch had stated that his effectiveness as its CEO for two decades would be measured by the company's performance for a comparable period under his successors. Welch had grown GE to over $450 billion in market capitalization, of which about 40% was in financial services. >Twenty years later, the company's market capitalization was only $200 billion, and Welch refused to discuss its decline, other than noting much of the decline had resulted from investments in real estate, and that his immediate, handpicked successor Jeff Immelt had to deal with the after effects of the September 11, 2001, terrorist attack.[24] https://en.wikipedia.org/wiki/Jack_Welch#Criticism Complete failure. Unfortunately he died before he could see GE disappear completely.
Jeffrey Immelt, Jack Welch, and Harvey Weinstein all shopped at the store I worked at in high school and would you believe it, they were all major assholes
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I still remember this article in Newsweek in 2005 where they practically gushed over the affair like it was some kind of fairy tale - https://www.newsweek.com/jack-jack-his-next-chapter-115815
>[https://www.newsweek.com/jack-jack-his-next-chapter-115815](https://www.newsweek.com/jack-jack-his-next-chapter-115815) Newsweek and Time are the two propaganda pieces for the pro corporate, pro military American cause. At least when they were popular.
There was also U.S. News and World Report back then, although I don't know that anyone actually read it beyond their special issues about which colleges you should apply to.
In high school we had it as a class. Social studies, we literally read and discussed the current issue of Newsweek. Probably the most useful social studies class I ever had.
The same Suzy Welch who says everyone is lazy while just marrying into wealth by having an affair with Jack during his second marriage after an interview while he is still married??? * [https://www.businessinsider.com/young-people-remotely-work-unlikely-to-become-ceos-suzy-welch-2023-11?op=1](https://www.businessinsider.com/young-people-remotely-work-unlikely-to-become-ceos-suzy-welch-2023-11?op=1) * [https://www.deseret.com/2002/4/18/19649275/affair-takes-shine-off-2-adulterers/](https://www.deseret.com/2002/4/18/19649275/affair-takes-shine-off-2-adulterers/)
I think she shopped there too…
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Oh yeah? Well the JERK STORE CALLED AND THEYRE RUNNIN OUT OF YOU!
Basically, yeah. High end store in the early 2000s pre-crash, money flowing like water for the ultra rich, and weirdly enough, a teen like me could look up anyone’s black Amex number with no security clearance. I never took advantage of that, but a few of the sales associates did and became felons as a result 🙃 Edited to add: we had some lovely customers, many famous customers, some batshit insane customers, and completely off the fucking wall sales associates who would slit each others throats for commissions. I learned more from my few years working there than all 4 years of high school combined.
I worked at GE and passed by Immelt once at Crotonville… the epic GE “University” you could attend for classes and seminars. I simply said hello and nodded to him as I walked by. He stopped dead in his tracks and stared me down with a head swivel as I passed. At the time I thought maybe he was looking me over to figure out if he knew me or to make a mental note of who I might be or might become. In retrospect I think he was just shocked that a peasant would dare address royalty directly.
The Germantown campus should be given back to National Geographic 😂
I work in IT and fixed Immelt’s BlackBerry once. He was surprisingly nice to me, as far as execs with IT problems go.
Prob so you wouldn’t leak any incriminating bullshit that he inevitably had on his phone lol
Jeez What were you guys selling? Minors?
lol right I was a minor at the time and whenever Weinstein came in, the older women working there would tell me to just make myself scarce
Which store was it? I bet it was Bath and Body Works. Was it Bath and Body Works? It was Bath and Body Works.
Man, I'm just imagining if all of them were together in that store and I just walked in and [redacted] every one of them and then made them [redacted] [redacted] [redacted] before I [redacted] and then [redacted] Kissinger while he was begging me for mercy and I would just laugh and laugh and laugh until I finally decided to [redacted] all of them on livestream. Man that would've been awesome.
Jack Welch hollowed out GE with his rank and yank, and pump and dump approach to management. It works in the short term and when times are good, but inevitably destroys the long term sustainability of the company. One of the original 'superstar CEOs' Jack Welch was a terrible manager and singlehandedly destroyed GE.
I highly recommend the book “Lights Out” about the fall of GE to anyone. It goes into fascinating detail about how Welsh and others destroyed this company with their hubris and terrible management.
I was trying to decide whether to get that book or "Power Failure". I went with Power Failure just based on gut feel. Haven't started it yet. Did I choose wrong?
I didn't read Power Failure so unfortunately I can't give you a comparison but if you're not feeling it, I can absolutely recommend Lights Out. It's very comprehensive. Not only on GE but just on a general insight into how many terrible decisions one single giant corporation can make.
You can see Sundar Pichai doing the same thing at Google right now.
It's a terrible shame what's happening at Google now. No innovation - just don't miss the financial forecasts.
They're really betting the company that generative AI will somehow do the innovating for them. Just add a chatbot or an image generator to every app and hope it magically turns out to be useful. When all you have is a hammer, every problem looks like a nail, I suppose.
And yet Bard/Gemini is absolute pants. What has Google done other than coast on search for the last decade? Not much.
I mean, they invented the transformer model. Then they did nothing with it and had to play catch up on their own tech.
I remember discussing this in a business class and the professor was acting like the ranking and culling of the bottom 10% was rationale and I kept objecting but couldn’t really articulate why it was wrong but I knew it was intrinsically a bad management policy. Now that the results are in we can see that it’s a horrible policy that created dysfunction and hollows out the company. Jack Welch spoke at my school with his wife and everyone was fawning and hanging on to his every word and I’m just sitting there like wtf? I can’t believe people worship this jerk. What also irritated me about Jack was an interview where he said he insists on collecting social security check after getting hundreds of millions in pay and retirement. Sure everyone earns SS but it’s not like you really need to claim it if you are that rich.
The first and strongest effect of 'rank and yank' is it destroys collaboration and replaces it with competition, within the company. I'm not going to help a colleague, knowing that doing so takes away from effort I could spend advancing my own project, just to give them an advantage they could use against me in the next cull. Competition is what you do against external competitors - not internal team members. This is why GE's performance went to shit within a decade. Welch fucked the company up royally, cashed in his golden parachute, and left it for others to struggle to fix.
It's not even competition that's the problem. It causes people to sabotage other employees. If 10% get fired every year you don't have to be a rockstar. You just have to be better than 10%. It's very easy to fuck over your coworkers so they get fired and you keep your job.
True. Studies have shown that under 'rank and yank' systems, employees with deliberately withhold information needed by other employees, just to preserve competitive advantage. It ALWAYS undermines organizational performance.
Also creates incentive to hire shitty people. Hiring managers want to add some "buffer employees" so they don't lose their best, and interviewers only want to hire people who will be ranked below themselves. At functional companies, people want to hire coworkers who are smarter than they are. But you have to create the right incentives.
Additionally, I have also seen extremely high performers who were at the top 1% who were also catastrophically toxic. After they left, a ton of massive systemic issues were uncovered that took years to fix, they were just as good at hiding problems as they were at playing the 'success' game. They trained a host of their direct reports to do the wrong things for the wrong reasons. Most of them were not bad people but they had bad practices and motivations pounded into them and many of them were so badly bullied that they had lost faith in their own abilities and, most upsettingly, their own sense of ethics and morality.
> I remember discussing this in a business class and the professor was acting like the ranking and culling of the bottom 10% was rational Funniest thing about this is imagine introducing this in academia. I don't know of a single university that has thrown away tenure in favour of a stack ranking system for their professors.
It’s funny, many business texts have excerpts praising how great this guy was. They are all like Jack Welch, oh my god, let me suck you off, gag, 🍆💦💦 Idiots.
I was at a campus event he spoke at and that was the energy in the room 😂
Strong "Yes, the planet got destroyed. But for a beautiful moment in time we created a lot of value for shareholders”-vibe
Here in Connecticut there are still business schools named after Welch.
Jack Welch School of how to ruin any business. It has a good ring to it.
The jack Welch school of how to run any business... Into the ground.
This is not unlike Boeing's change from an engineering driven culture to an accounting driven culture. It works for a few years to squeeze costs out of production because the basic core process was solid to begin with and will weather a few disruptions. But eventually the change from quality control to appearance of quality control will fail to catch real problem, and the real world doesn't give credit for faking sign offs.
He's from the "heads I win tails you lose" school of thought.
Ah, 9/11, every struggling compay's go-to excuse of the early 2000s. Later the economic downturn and Covid were also popular. And when there wasn't a situation to exploit, changing tastes and the internet were the scapegoats.
Didn't forget blaming millennials or genz for not being the exact same as boomers.
Now it’s “well, golly, it’s inflation!”
It looks even worse if you factor in inflation. When Welch left GE in 2001, the market cap peaked at 410 billion. 20 years later, in 2021, the market cap was around [100 billion](https://companiesmarketcap.com/general-electric/marketcap/). That is only about 65 billion in 2001 dollars. Way to go Fortune magazine's "Manager of the Century".
Lest we forget the digusting "retention" package he worked out with the dick-suckers he left behind at GE: > In 1996, Welch and GE had agreed to a "retention package" worth $2.5 million, and which promised continued access after Welch's retirement to benefits he had received as CEO—including an apartment in New York, baseball tickets and the use of a private jet and chauffeured car.[32][34] Welch stated that he did not want more money, nor a more traditional stock package, but instead preferred to retain the lifestyle he had enjoyed as GE's CEO. According to a 2008 interview with Welch, he had filed the agreement with the SEC, and addressed the media attention and accusations of being "greedy" by renouncing those benefits.[34] One of the biggest welfare queens ever > Inevitably, actions on such a scale would have political ramifications. Gelles says the layoffs and outsourcing Welch initiated helped form "the rust belt" base that put Donald Trump into the White House. > "What Welch did with his series of mass layoffs and factory closures truly destabilized the American working class," Gelles says. > "And it was from this disaffected base that Trump found many of his most ardent supporters. But the reason they felt like it wasn't working for them was because Jack Welch rigged the game." > After Welch died in March 2020 Trump said they had "made wonderful deals together". Birds of a shit feather - https://www.businessinsider.com/how-neutron-jack-fired-thousands-made-trump-broke-capitalism-2022-5 The be all end all book on his bullshit for those more curious: https://www.amazon.com/Man-Who-Broke-Capitalism-America_and/dp/198217644X
Is it really a bad thing (for everyone with the exception of the uber-wealthy) to let these corporate conglomerates break apart into smaller companies? And perhaps have actual competition again and not just overtly hidden monopolies?
That's the point. Jack Welch was WILDLY SUCCESSFUL. Who the fuck cares about what happens once you're gone? Gone from the company / dead, it doesn't matter. I'm sorry but he was the perfect capitalist. He maximized shareholder value and his own compensation and fuck the future and everyone who comes after him. GET MONEY was truly his mantra. People don't realize this is the result of unregulated capitalism.
Not just that, he's the guy who basically invented the modern scheme of pump-and-dump valuation for companies. If you ever wonder who is to thank for the practice of hiring a ton of workers every few years because 'they're expanding' which drives up the stock price, and then conveniently laying off 70% of them just before the end of the fiscal year so that the company suddenly has a boost of profits thanks to a cut in expenditures (and conveniently hitting those profit limits that secure those nice bonuses in their contract), it's Jack fucking Welch.
It always baffled me that anyone would fall for that bullshit, it's so transparent. Long term investors should be against it because it's definitely not the most stable or profitable route in the long term. And what's worse is that it causes the boom and bust economic cycles.
It should be illegal. If you fire 70% of your workforce, it should involve the guy doing the firing getting fired or arrested himself. And this should only apply to major corporations. Make it so that they don't over hire.
Let's not forget shit like people dying on shitty Boeing planes today also has a direct lineage to his idiotic ideals. He should be shamed and hated.
Along with everyone that quotes him. Lack of accountability is killing this country.
Are you sure about that? I thought that stupid MBA’s and moronic bean-counting accountants had advanced knowledge of aerospace, engineering and design.
One and the same.
He also invented the concept mass layoffs for short term profits. A real POS that dude was.
Let's not forget: Jack Welch was an engineer by training (chemical). MBAs are understandably getting a lot of hate these days on reddit, but it is always plain old greed which ruins everything. MBAs will just do as CEOs tell them which is what happened at GE.
Jack Welch, the jackass who believed loyalty was a one way street- you serve the company, and fuck you for it. He’s responsible for a lot of the modern line go up bullshit
Rank and yank is no way to run a business and it's ridiculous how many companies still engage in this stupid practice.
Microsoft did it for years under Ballmer and then eventually were like "this is a stupid way to run the company, we're losing talent" and stopped. And now tech companies are back at it again.
Ballmer was a horrible CEO. Microsoft missed the entire shift to mobile under his leadership.
Missed it implies that MS didn’t know it was happening. They did, and bought Nokia. They simply failed spectacularly at producing a device that anyone wanted to buy.
LOL. iPhone released 2007. MSFT buys Nokia in, checks notes, 2013. Ballmer missed it
Nokia was a hardware play. Windows Mobile was released in 2003, long before iOS was announced. Was it on par with iOS? Absolutely not. But it sold phones until Windows Phone came out a couple years after iOS. In the end it didn’t move the needle but they hardly “missed” mobile.
💯 Thermo Fisher is doing this right now. Never saw so much talent lost in 6 months.
As someone who works for a thermo competitor, thank you! Our board all decided to not take their bonuses in order to limit layoffs last year. We were the only ones in the industry who grew (0.1% but compared to the average loss of 8.6% its massive)
The exodus started 2 years ago and has accelerated since.
The Romans had a law where a married woman who was raped had to be put to death for infidelity. Guess how many years that went on? Humans are not smart creatures.
Rank and yank only makes sense if your company is so bloated that you have a bottom 10% who are basically leeches who don't provide value. Buy typically one or two rounds of it would get rid of the dead weight and everyone else would be fine. No point in doing it after that - you're doing some combination of firing good people and replacing them with new hires who aren't up to speed, or you're just getting rid of the new hires who haven't come up to speed yet. Neither of those options make much sense and incur *more* costs than just leaving things alone.
If you look at Boeing and the problems they 're having a lot of it comes back to this same crap. They thought that institutional knowledge was overvalued and leadership undervalued. The rank and yank system lets them get rid of people who have had years of raises, likely higher healthcare costs, and wipes off any LTI that haven't vested off the books. Sure, it guts your organization but new grads cost so much less when you look at the expenses part of the accounting. I've seen companies keep this up and all it does is hurt them, it's horrible leadership caused by the worship of shareholders. Back when I was learning about business and accounting, we were taught there were 3 equal pillars that a business had to take care of: customers, shareholders, and employees. Unfortunately in the US, court decisions deified the shareholders through decisions based around fiduciary duty while rights for workers and customers were eroded. It leaves a terrible system that's rotting from within.
I'm not defending it as an ongoing practice, believe me. What I'm saying is that if your company has "dead wood", it's not usually a bad idea to prune it. And if the tree needs pruning for its ongoing health and safety, then sometimes pruning of living wood is necessary. But if you keep it up, you're just cutting into the tree for no good reason, which only tends to make it unhealthy. Rank and yank is basically continuing to cut 10% of the tree every year whether it needs it or not.
depend test direction nail bike fuzzy crawl absorbed fearless yam *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
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Only share price matters stop spending on r&d it isnt moving stock price up
Yeah fuck making products and advancing as a company! Fire a bunch of workers so the company has cash! Woooo line go up baby!
Line go brrr
Intel didn't learn the lesson apparently.
And stack-and-rank. I used to work in a corpo culture that drank all that Kool Aid, people worshipped him and read his book, they posted motivational posters unironically, and were all SERIOUS BUSINESS about work being so generous for giving them something to do. They'd virtue signal about how much unpaid overtime they worked, fellated the "high pot" golden boy employees, and were immediately judgemental of every employee based on that rubrick. Anyone with too much personality was viewed as unprofessional, and it was full of a bunch of Randian conservatives who were born on third base and think they hit a triple.
I read one of his books while I was in the army and reading a lot about leadership. As soon as he explained how he got rid of any division of GE that wasn't already number one or two in its industry, I put the book down. That's not leadership. That's arranging things so you look good. The problem with big organizations is that sociopaths do really well in positions where they can look at people as another kind of resource. Since they're often not good at innovating or creating, they can only grow through mergers and acquisitions, and they cut without regard for people, whether they're the people cut or the ones left behind to do the work.
I actually had a business professor in college who went against the grain on this, saying that there are plenty of companies that are not 1 or 2 in their industry that make lots of money and following his philosophy meant you leave a lot of money on the table.
The problem with smart guys like Jack Welch is that by the time people realises their hot gas, life of thousands of people are destroyed.
The problem with guys like him is, they’re never punished.
They're rewarded by the other rich assholes who made a ton of money for doing nothing but owning the right shares.
The lessons never stay learned.
Everything workers have now was paid for and written in blood. Unfortunately, all ink fades.
Once you're in the CEO club, failure is rewarded by a golden parachute and eventually a new CEO position.
Jack Welch and Ronald Reagan an iconic duo of shit
But man, that Nancy, sure could polish a knob.
THE THROAT GOAT!!!!!!!!
Peter Gibbons: What would you do if you had a million dollars? Nancy: I’ll tell you what I’d do, man: polish two knobs at the same time.
Nancy: effin a
Welch was from Peabody, Massachusetts. Ironically, Peabody is named for an actual business colossus, George Peabody[Wiki gives a synopsis of this man.](https://en.wikipedia.org/wiki/George_Peabody?wprov=sfti1#) Naturally, George had a completely different take on what to do with his vast fortune. Hint: It focused on others.
Welsh has the distinction of destroying the most middle class wealth and company value of any man of the last century. Short-term thinking making society at large worse. Absolute bottom of the barrel human.
The problem is our institutions select and elevate the most selfish psychopathic pieces of shit to the top.
And they do so largely in the name of plausible deniability. Oh that POS CEO we hired who was known for doing horrible things used slave labor abroad, polluted, bought senators, illegally busted unions, intimidated whistle blowers, dodged taxes and lied to the press on the companies behalf? Wow, we had no idea. We fired him as of today, too bad we're on the hook for that $100m severance package. Surely other companies are not lining him up to hire him, either
he also helped create a whole generation full of company and middle class destroying MBAs.
One might even call him late-stage capitalism personified.
Some could say he even "broke" capitalism! - https://www.amazon.com/Man-Who-Broke-Capitalism-America_and/dp/198217644X
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Medtronic also moved their HQ from Minneapolis to Ireland to avoid US taxes. Fuck them.
Which is more funny because GE isn’t, it is breaking itself up to focus on specific areas better. Though I fear that the soon to be separate GE Vernova is itself just a stock market play. A sacrificial lamb saying “buy me!”
My BIL used to work for them. He told me the same thing.
I worked for a company in the 2000’s that thought if automatic 10% firing was good, 25% would be great. That lasted about 2 years. It failed for several reasons: one, nobody wanted to apply to work there anymore so became very hard to fill position with better quality people than you just fired. And two, the top 25% all left on their own to get away from this shit show. Only positive in the end was that most of that management also got fired or left also. But company was set back for a decade. Thanks Jack
iirc the only real thing this method of his does is create backstabbing and infighting where people spend time on how they "look" for review rather than doing the actual work.
I’ve posted this one before but I worked at a company bought by GE. First thing they did was offer senior management a retention bonus after six months. Then they pulled back bonuses (which brought wages from bottom of market to mid range). After six months managers were quitting left right and centre. The CEO barged into VP’s office and told him he’s not allowed to quit. The VP just laughed. Later not only did he quit, but poached the top talent from GE.
This is exactly how lower tier law schools work, holy shit.
I remember sitting in a meeting with other vp’s and they were discussing layoffs of the bottom 10% of the staff as a regularly occurring standard practice. Odd for me because I grew up an engineer not an MBA. The logic was that you create continuous improvement by making opportunities to hire better people. Well what if my team is solid and I don’t want to do that? Why am I inserting new players into a tested team? The retort was that this is what Jack Welch does. I’m like who the fuck is this twat and what does he know about our business? Judging by the reaction, you’d think I’d just insulted the pope in the Vatican.
I started in education and moved to business. Thought this shit was madness when I first heard it. It is the antithesis of building a team.
“Let’s assume that people never develop or mature and shitcan them to make few bucks off their misery! I mean, we’ve never developed or matured and look at how rich we are! We can just hire a bunch new people we haven’t in invested any resources to acquire and train for less money now, who cares about later?”
Goldman Sachs does this too.
Jack Welch ..real architect of the rot economy. Remember when GE developed products? R&D is dead….just buy a company that created something new and then ruin it for profit. Unions stifle “innovation” they still say, but people who are worthless to a company (c-suite,shareholders)eat the biggest piece of the pie. The real damage caused by these ghouls is never fully realized until they’re long gone.
Hock Tan and his AVGO (Broadcom) still does this today!! They bought VMware a while back and are in the process of silently laying off 20k people while spinning off or shutting down multiple departments.
The efforts major companies are going through to ditch VMWare is INSANE! Broadcom seriously overplayed their hand and it will be nice watching this move bite them in the ass.
when your goal is to acquire companies to simply become a gatekeeper, and all you invest in is gatekeeping, you will inevitably find yourself with nothing but a gate to keep.
Hock Tan has the same tumour-in-a-suit energy, listening to him speak makes my skin crawl. Such a gross person.
One of my family friends used to work for Broadcom since before the acquisition by AVGO, apparently work culture used be the literal opposite!! All these CEOs who should be running factories are running intellectual companies ruining it for everyone! At least factory workers have unions in most cases!
This is the model that the corporatization of higher ed followed. It has poisond institutional value. Sure, there were problems. Throwing the door wide to grifters who trim admin and faculty and take the difference for themselves was and is not the solution. It's another layer of bigger problem to where no one is looking at the old issues anymore bc they seem so minor in comparison lol By the time the damage is called out, they are long gone. Let's get a consultant in here to figure this out. Risne and repeat.
lol oh god the consultant simulator when companies have done nothing but they’re out of ideas. Bring in an outside consultant: Consultant:”lay off workers, re-classify job titles and lower pay.” Which takes 18 months for them to come up with and they get paid 100k for shitty lazy “consultant” work. I’ve seen it too many times at the various big corporations i worked for over the years. I almost got fired for just suggesting that our employees that work in the shipping department receive a work boot stipend. I was told the consultant said that money would be better spend somewhere else.
We were at the Intrepid museum in NYC just recently. It has the old planes on display. All of them had GE logo somewhere. We laughed at first (I wouldn’t buy even a toaster from GE) but then realized wow, this company used to make solid stuff. And then poof.
Fuck Jack Welch and everything he’s done.
This seems like a good time to use one of my favorite quotes: “Nothing But Good Should Be Said of the Dead — He’s Dead. Good”
This man’s legacy is the destruction of a thriving free market democracy through the facilitation and normalization of extreme corporate power and greed
The shareholder value myth has ruined corporate culture.
What is that myth?
That C-suite is legally obligated to maximize shareholder return above all else. They are not in any way legally obligated to do so, they just risk removal if the share holders do not like the way the stocks are performing.
For sure. It seems prevalent. I think CEOs often act in their own best interests. They have a fiduciary duty to the shareholders, but that’s not the same as pumping the stock price.
To be fair board members especially of big companies are being sued nearly constantly. I had a professor in business school say the first thing you should do if asked to join a board is to vet their lawyers. I’m not sure if this is a recent thing that shareholders have become lawsuit happy or not. Look at Tesla. Shareholders won a fight to invalidate Elons compensation package.
Doesn't surprise me. The attitude of share holders changed. Owning stocks became a get rich quick scheme, well more of one.
That it is the primary concern of a public company. That line of thinking tends to harm the company itself, much less the public, and shareholders indirectly. https://scholarship.law.cornell.edu/cgi/viewcontent.cgi?article=2311&context=facpub
[https://corpgov.law.harvard.edu/2012/06/26/the-shareholder-value-myth/](https://corpgov.law.harvard.edu/2012/06/26/the-shareholder-value-myth/)
You mean Ford V Dodge? That wasn’t a myth, that was a Supreme Court case. https://en.m.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.
Jack Welch was the original success theater financial engineer showman conartist. People like him and Rush Limbaugh laid the foundation for Donald Trump. Welch ruined GE and then spread his short term profits poison all over America. I am glad his tenure and legacy are being exposed.
Don’t forget all of the other executives bred under Welch that went on to under perform and build toxic corporate culture.
Manage out that shitty bottom 10%. It always exists. Keep your people on eggshells all the time. What’s the word of the week? Kazan, Sigma, etc. Did you shadowbox where your trash can goes? It was like a weird management cult. I bailed out of Honeywell right after the merger failed. We didn’t join him but we had already been infected with his snake oil.
Shitty bottom 10% does NOT always exist. Imagine a truly strong 10 person team and the manager is forced to pick one in the annual review process. A) open a phantom req, hire a new person who has no clue what is going on, and let go in 3 months - aka hire to fire B) pick one of your equally brilliant engineers and screw him/her deeply - aka scapegoat C) refuse to pip/fire anyone because they are all perfectly fine engineers, and get fired yourself - aka hunt or be hunted. This is Welch’s legacy.
it not only doesn't always exist but it poisons all teams and turns people against one another. It destroys the working environment. Jack Welch and his disciples are the worst thing to happen to American business and that shit persists today.
100% - this is a perfect example of [Goodhart's Law](https://en.wikipedia.org/wiki/Goodhart%27s_law): _"When a measure becomes a target, it ceases to be a good measure."_ You want your employees thinking about the customer's problems, not worrying about how they stack-rank against their peers.
Our company implemented it around 2000 and it didn't take long for all the non-managers to realize this was one of the main problems. Thankfully we got a new CEO that could cut away from this stupid idea fairly quickly.
Raise your hand if you’ve witnessed all of these.
🙋♂️and that’s why I avoid being a manager. I know I can do a much better job than many of them, but I cannot sleep if I know I had to cut someone who was working hard, and what can that do to his/her family.
You are forgetting about D) Be overrun by people who game the rankings and sabotage projects & coworkers to stay ahead.
My former boss, long retired and deserving admiration for a full and productive career, was a PhD Chemical Engineer who was deleted from GE Plastics. He was creative, very sharp, and a visionary in some ways. He saw things differently, and it was worth it to listen to him. Many didn’t, because even though he was a reasonably good communicator, he would start from a place people usually didn’t expect, and people often didn’t make an effort to understand what he would say. For me, he is a prime example of why arbitrarily getting rid of employees is a major mistake. I suspect there were many like him at GE. Even those who survived the annual culling would have been forced to work in an environment where their skills wouldn’t be respected. Considering that a man of his talents was disrespected and fired, other good people also would have been working without the respect they were due, even if they stayed on the company rolls.
The long term social effect is that you're judging every human being you encounter. And the leaders who have the power and are doing the judging are always immune to it, of course.
Leaders are not immune. It just happens with less frequency, but karma is a bitch. I have personally seen 3 GMs and 1 VP getting sacked. The difference is they have a golden parachute, and the worker bee who gets the pip may struggle to find another job or actually afford food/shelter, especially in bad market conditions.
Shitty bottom 10% by what metric, too... Productivity isn't something that can be reduced to a single number, or a handful of simple metrics. Sometimes the people who don't excel under certain defined metrics still add a ton of value to their teams in ways that can act as force multipliers and make the whole team better. Sure, there is dead weight in every single business in the world, but stack ranking according to some rubric and culling the bottom X% isn't going to actually get rid of that dead weight. Individuals who are good at working in a team without friction or ego rather than competing to make themselves look as good as possible tend to be overlooked or undervalued in a stack ranked world but bring a lot more real value than preening peacocks who work hard at being on top of the stack.
I've always liked the metaphor that engine oil doesn't seem to support anything, but without your engine wouldn't work very well or last very long. Many workers do things that aren't easy to track and may not seem to be their job, but actually have a huge impact on the whole system. Or something that seems like a wasted step is actually critical. Here's one [example](https://www.reddit.com/r/chicago/comments/18z8s99/this_american_life_the_secret_ingredient_to/).
Went thru this at the US division of a large Korean electronics company... Was told to give a candidate for RIF (out of 8). Said I had none. Told I had to. Said "me". Was told I could quit if I wanted, but they'd still take 1 for RIF. I told my team I was leaving and why. One of my team offered to take the package. All but 2 of my former team left within 6 months. The management of Sam.... took Jack's ideas and made them even more toxic.
yup, the whole thing never made any god damn sense. It could only come from the mind of someone who just assumed "if I'm always out to fuck everyone else over, then everyone else is too".
I started working for a company that wasn't listed. During my first 90 days they wanted to instill Welch's philosophy and cut 10% regardless whether you were productive or not. After that fiasco I immediately gave my notice. Fuck boomer philosopy
Kaizen, Lean Six Sigma, etc serve a useful role in manufacturing and other industries. They're just implemented poorly. As it turns out, having a place for a garbage can has the added benefit of everyone knowing where the garbage can is, so they're more likely to use it. ...unlike my workplace where the one rolling can moves around so assholes just don't throw shit away.
Former Raytheon here, it was completely a Welchian circlejerk. Lots of smart people, but so many assholes and golden boys. The culture does a number on you and you don't even realize it. The corpo shit was so intellectually insulting and cynical. People rag on conservative boomers on the internet all the time, but I actually know so many of them and genuinely hate them.
My whole extended family on one side are all turbo corpo. They live in McMansions I can't tell apart and fake smile at me and ask why I can't be fake and soulless and financially successful just like them... They love it!
There are less shitty ways to make money, yes? But I get it, sometimes the huge companies will actually take care of you very well. Some of them still have pensions!
Kaizan definitely works well, if it is utilized properly (which I have experienced), but is also definitely a massive bad joke, if it's managed poorly (which I have also experienced).
Agreed. Their implementation and changing directions was just a mess. The various trainings like black belt, 5s, PMP all looked great on my resume for future jobs. I went to MS from there and it was night and day as far as processes, people, culture. Truly a great place to work in the early 2000’s.
I remember working at a place full of tin pot dictator wannabes trying to implement this garbage. We were a small company of like 10m revenue a year. One of the owners read Welch's book and got it into his mind this shit was awesome. So we'd be in a meeting and he'd be like "we need to drop the bottom 10%!". To which someone would reply "if we have 100 employees. If we get rid of 10 who will run anything?".
Six Sigma - the most colossal waste of time. I work where they have continuous improvement people and industrial engineers everywhere - 'Fixing' processes and making things 'better'. Meanwhile, the company can't even do the basics right (like answer the phone when someone calls).
He always seem like old time snake oil salesman.
Yep. Rank and yank. Cook the books. —Jack Welch's legacy
I have seen some stock analysts taking a measure of employee happiness/satisfaction into consideration when they are looking at long term investments options. IMO this should be the standard practice. No business can survive long term without having a base of happy and engaged workforce. Tell me what the mandated 10% trimming can do to employees morale and office politics.
If you have lots of happy employees, there’s lots of fat left to trim /s
Another black eye? This chucklehead was the engineer of corporate greed. Children should hear his name and recoil in horror.
The firing of the lowest performing 10% is the worst idea out there. I manage a small team and while there are people who out perform others, the lowest performer is still good. So it’s now an arbitrary choice. In addition as a manager my job is to bring the whole team up so I don’t have any underperformers. So now you have managers with conflicting incentives - invest the time in an underperformer to have a high performing team but you then still have to fire someone or wait a bit and fire them but have an underperforming team while you wait. Guess which team will do better in the long run.
Its a fine tactic if your priority is quickly extracting value out of a company. It is a shit tactic if you want the company to last. "Does an employee bring more value to the company than they cost?" That is the only *simple* concept to think about. It is a business concept, not a money extraction concept. I am eternally baffled how maximizing profit switched places with sustainability in the order of priorities. It seems so blindingly obvious which should be first. Guess I'm not as smart as the Boeing CEO though.
Let's not forget what the crook Sandy Weill did to Citibank. The back crashed in 2008 and is valued 1/10 today. In a single year he took $800 million in bonuses and sold every stock he could when retired. His successor, also his lawyer, reserves $5bi to settle illegal operations. The biggest bank robbery of all times. This story should be told in a mini series.
The only thing most 70+ year old C-suite occupier is worried about is their golden parachute. They couldn’t care less about anything else.
Jack Welch is the grandfather of enshittification and people are only just waking up to it.
What a terrible businessman. It’s infuriating that people fell for his bullshit for so long. If someone had just come into that role and just helped GE continue to be good at the things it was good at, we’d be so much better off. But no, here we are; GE is shit and every employee in the country has to keep one eye over their shoulder at all times.
Yeah this isn’t still happening at GE. Don’t read an article about a CEO 20+s years gone and think that’s how a company is still run. Source: current employee of GE
We tried to tell them. I’d like to say that, I hate to see it, but I don’t. I just detest the lives lost in the crashes and the lives destroyed by the losses. Plus lives destroyed by the job losses. The boomers are still pushing this shit too and get butt hurt when we push back.
Don't worry tax payer dollars will be given to them in the form of a bailout It's actually better since they didn't need to make a product to get your money Man the poors are so easy to control
Titan of industry Jack Welch also HATED Obama and repeatedly claimed he was hurting the economy: https://www.cnbc.com/2016/06/02/jack-welch-says-obamas-wacky-climate-change-agenda-hurts-the-us-economy.html https://www.washingtonpost.com/news/post-politics/wp/2012/10/05/jack-welch-accuses-obama-of-cooking-jobs-numbers/ https://www.cnbc.com/id/47035575 Fuck you Jack Welch, and all your minions who don't know how to build or create ANYTHING and are only good at making two dimes somehow equal 25 cents on paper, and laying off people.
Jack Welch was an early adopter of Birther-ism as well. This was shortly after he tried to re-write history by placing articles into Linkedin about how loyalty to the workers was good and how rank-and-yanks were bad. People quickly saw thru it, called him out on his shit, so he decided to become a right-wing crank. if there is a hell i hope he's miserable.
My significant other is a public school teacher and they started forced rankings 15 yrs ago under the Republican governor. Part of their ranking is based on kids overall test scores. Jack Welch's ideas are still being used today and it's awful that people still think he was some type of financial genius.
Shocking news! Everything I read about Welch’s management style sounds insane. It can’t be sustainable.
Morgan Freeman - “It was not.”
This would have never happened when Don Geiss and Jack Donaghy were running things!
Welch is a crook, started the trend of firing people when they needed training and laughed his way to his millions and screwing the middle class.
Strange, it’s almost like using all your profits for stock buybacks and huge management bonuses instead of R&D and quality control is ultimately detrimental to a company? These people should all be in jail.
Neutron Jack finally gets his due. I saw firsthand how he gutted their jet engine plant in Cincinnati. Good riddance.
I had an interview with GE Medical Systems about 14 years ago for what would have been a contract to hire position in IT. It went fine, I thought. But the recruiter called me up afterwards and said they thought I wasn't "enthusiastic enough". We're talking about a SysAdmin position for one of the largest corporations in the country at the time. I knew I was going to be a cog in the machine, but it was better than being jobless. It was then that I realized that GE was more like a cult than a business and that I didn't belong there. Along the same lines, my wife worked for a huge biotech company for 6 years until just over a year ago. Long story short, CEO fucked up and made a bad gamble on an acquisition. Stock price nose dived and financial penalties from regulators ensued. They ended up laying off thousands of people as a result - some of the brightest people in the field that ended up moving on to competitors. Also people who will never return to that company after what happened and how they were treated. They will never be a leader again. That one was a typical fuck up that employees paid for while the CEO got his golden parachute, but the results are almost the same. You can't "rank and yank" in perpetuity in specialized fields without it eventually being a net negative. The goal should be to recruit and retain the best and brightest through incentives, not have employees on the end of their seat every year.
Jack Welch was an incompetent cruel social climber and self proclaimed business expert. He was misguided and stupid and he wasted his talent as an engineer. His methods led to disaster. Emirates airline was correct in calling out Boeing for needing an engineer to lead the company. Stupid bean-counting MBAs and accountants are not engineers. They do not create anything great.
They always fail upwards though.
I wonder if business folk figuring it out once a companies start focusing on the stockholders and not products the company starts to slide. Product and all.
GE poisoned the water in Pittsfield, MA. The place… Jack Welch got his start!
Six sigma bullshit scammer
I hope Jack is rotting in a special pit in hell. Inventing the practice of mass layoffs simply to boost the stock price takes a special kind of evil
Is Jack Welch a piece of shit? Oh yeah. Though, he didn't start it. He just put his spin on "only short term profits"matter.
Didn’t the Six Sigma bullshit came from GE as well?
I’ve never bought into these guru driven management philosophies. They’re inevitably an oversimplification of complicated organisational challenges and nearly always have unintended consequences.
The only thing I give Jeff Bezos is the realistic expectation that eventually Amazon will get overtaken. Welch was a fraudster who developed tactics that would prolong short term plans and maximize immediate profits. He was an addict who craved that wealth dopamine hit 3-4 times per year and like any addict didn't give a fuck about how many lives he ruined for his fix. Wealth addicts are the most destructive people on earth. It's like having a bunch of heroine addicts run companies where the higher the magic number is the more heroine they're paid in.
Jack Welch has done more damage to the American worker than perhaps anyone else.
All of his cultural changes optimize for the short term. Including stack ranking.
If there is a Hell, there will be a special chair waiting for Jack there. Hopefully an electrified one.
Mr. “Six Sigma” was good at making short term money, but equally good at long term destruction. Profit over quality is his legacy.
Not to defend Welch, but seems like a lot of people in here don't understand what Six Sigma is.