LIGHTS OUT

Two Wall Street Journal reporters expand years of their newspaper coverage into a detailed book about the decline of General Electric due in large part to management incompetence, greed, and dishonesty.

Founded in Schenectady, New York, in 1892, General Electric eventually grew into one of the world’s largest corporations, selling products and services with sterling reputations, developing a loyal workforce, training managers who earned renown (especially Jack Welch), and providing reliable investments for stockholders. Examining what went wrong during the past two decades, Gryta and Mann focus mostly on CEO Jeff Immelt and his successor, John Flannery. During their stewardships, GE stock prices and number of employees dropped significantly. At times, financial disaster seemed imminent, as the corporation sold many of its electricity-related assets to raise cash. When Flannery arrived in 2017, the company was fighting “dysfunction tending toward chaos and a confrontation with the past that was mere weeks from spilling into public view. Beneath the placid surface, GE was in total disarray.” The authors attempt to place the demise in a larger context by noting that for many decades, GE served as a model of excellent management for countless other corporations. This leads the authors to wonder about the viability of many other seemingly healthy corporations. Often, the authors’ exploration of the bigger picture falls victim to the excruciatingly detailed saga of GE. Readers without a direct connection to the corporation—e.g., current or former employees, outside corporate analysts, and investors—will be tempted to skim the parts of the narrative about the dizzying maneuvering inside the corporate suites. The authors’ knowledgeable reporting is mostly top-down, as they rarely focus on lower-level employees. They analyze Immelt from a variety of angles, and while he certainly emerges as a complex figure, the authors struggle to make him compelling as a protagonist. The book would have been more engaging if shortened by nearly 100 pages.

An overlong survey that may interest business students as a case study.