Customer Reviews

The Secret to GE's Success: A Former insider Reveals the Leadership lessons of the World's Most Competitive Company

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First, a disclaimer: unlike most (all?) of the previous reviewers, I'm not a GE alumnus. So I can't opine as to how intense will be the waves of nostalgia this book may induce in you if you currently work or previously worked for that company.

For outsiders, this book describes some interesting history. But I was disappointed at the relative shallowness of the discussion. The book seems designed to be read during a flight from L.A. to Chicago; the author duly adheres to commandment #1 of contemporary business book writing, namely don't trust your reader to be able to concentrate on one topic without interruption for more than 1.25 pages. (It also doesn't add depth that he relies on websites for most of his references.) Compared to, say, Robert Burgelman's study of Intel, "Strategy is Destiny", this book is very unsatisfying if you're interested in strategy. Considering that the author had been a senior corporate strategist at GE, one could reasonably have hoped for more.

Instead, the lion's share of the discussion is about the personalities and decisions of GE's leadership, and issues of succession. Even strategic issues are refracted through this leadership lens. Not that this was uninteresting -- but unless you're a CEO or a board member of a company, you aren't going to be able to apply these lessons on the job.

The author's decision to structure the book chronologically rather than, say, thematically, constrained him to draw edifying strategic conclusions from each of GE's administrations, even when the performance of some of them had been less than exemplary. As a result, some of the "takeaways" can be a bit banal, such as "Review your strategy from the top to the bottom and make sure it is internally consistent" (@ 69). Sometimes the advice seems inappropriately retro or unsubtle, e.g. using Edison's experience to justify patenting everything and litigating aggressively (@ 17). This ignores other possible ways of getting value from IP portfolios, as well as the fact that managing the costs of filing, litigating and maintaining multinational patent portfolios is a much bigger headache today than in Edison's time. The author tells us to judge business practices by the standards of their day, rather than the present; OK. But whether those historical practices can tell us much useful for the present has to be judged by the standards of today. And those standards include globalization, antitrust regulation in the US and EU, hair-trigger financial markets, and many other factors that have changed radically during GE's 126-year history.

Nonetheless, the most interesting aspect of the book for me was the discussion of GE's management team from 1922 until the early years of the Second World War, especially CEO Gerard Swope (who served about as long as Jack Welch). As amazing as it sounds, Swope was a Socialist. When the Depression hit, he and chairman Owen Young instituted a variety of progressive benefits policies, including offering all employees a 4-day work-week (to avoid having to fire 20% of the workforce) and profit-sharing. They also invited the CIO to unionize the company, which allowed GE to avoid strikes until the late 1940s (under Swope's successor). As an adviser to FDR, Swope became the prime architect of Social Security, among other New Deal programs. At the same time, Swope and Young also instituted a number of very smart, very capitalist moves that enabled the company to grow under the so-called "Benign Cycle" based on GE's consumer products and power generation systems product lines. To think that there were such complex and idealistic business leaders in the past -- now, *that* made me feel nostalgic.

William E. Rothschild's book The Secret to GE's Success is a very good read.... even for laypeople like myself who are not versed in management strategies. It captures your interest and holds it from beginning to end.

The book gives an illuminating history of the company from its inception

126 years ago and its' emphasis on leadership and strategic planning for the future, as well as how each CEO paved the way for his successor. Little did Thomas Edison realize what he started in the late 1870's.

General Electric has always had a vested interest in its employees .... a rarity in the current big business climate. Rothschild notes that GE's motto: "Do right voluntarily" extends to its employees and business practices today.

No doubt for reasons of convenience, most (if not all) of the most important information about GE is summarized within a series of acronyms. For example, with regard to GE's "4 E's (+P) of Leadership," Jack Welch explained that the four Es represent positive Energy, the ability to Energize others, having an Edge (i.e. the courage to make tough yes-or-no decisions) and Execution (the ability to get the job done). What about P? "Passion!"The subtitle to William E. Rothschild'sbrilliant book refers to another acronym, LATIN, that reveals "the secret to GE's success": Leadership as well as Adaptability, Talent, Influence, and Networks. As Rothschild explains, his material covers GE's successes and failures since 1892 when it was established in New York, the result of a merger of of the Thomson-Houston Company and the Edison General Electric Comany. Charkes Coffin was GE's first president and Edison, who left the company two years later, initially served as a director. Rothschild describes the five success factors in each stage and provides "an objective assessment of what was done in each realm - both positive and negative."

The material is carefully organized within four sections, each of which covers a specific period throughout GE's history:

Part I "Living Better Electrically": 1879-1939 (Chapters 1-4)

Part II "Diversification and Decentralization": 1940-1970 (Chapters 5-9)

Part III "Portfolio Leadership": 1971-2001 (Chapters 10-13)

Part IV: "Back to the Future": 2001-Present (Chapters 14-16)

When reading Rothschild's book, it soon becomes obvious that those who led GE determined its priorities and objectives in each of the stages of its development. For example, Edison's focus was on identifying real problems, finding solutions and commercial applications for them, insisting that everything be patented and copyrighted; Coffin and Edwin Rice (1892-1921) ensured the success of the merger with a commitment to participative and consultative leadership, and willingly shared authority with associates; Gerard Swope and then Owen Young (1922-1939) took that commitment "to a higher level by creating ways for managers and employees to contribute to the company's strategies and policies; Charles Wilson and Philip Reed (1940-1950) were transitional leaders and Wilson "understood the old GE perfectly" but lacked the experience and the temperament to lead "the significantly charged company" after World War Two and voluntarily stepped won; Ralph Cordiner and Reed (1950-1963) spearheaded GE's decentralized growth with "a new and relatively unproven way," management by objectives (MBO); Fred Borch (1963-1972) continued decentralized management and, when realizing that he hadattempted to do too much ("GE can do anything it wants to."), "instituted a radical change in GE, enabling it for the first time to exit or prune products or even entire businesses"; lacking a co-leader following the premature death of his mentor, "Flip" Philippe, Reginald Jones(1972-1981) created a new "chairman's office," assumed the titles of chairman and CEO, and surrounded himself with those who had diverse personalities andf leadership styles; Jack Welch (1981-2001) accepted Jones's suggestion that he "blow up GE" (i.e. eliminate everyone and everything that did not add substantial value to the company) and did so - in Rothschild's words -- as a "contentious, demanding, celebrity CEO, a surgeon leader," [who was his]own inteligence network"; and finally, Jeff Immelt (2001-Present) who is more diplomatic "but still tough" and considers people selection and their development especially high priorities as he leads GE through what continues to be a troubled global economy. By the way, those who have a special interest in GE's current CEO are urged to check out David Magee's recently published book, Jeff Immelt asnf the New GE Way.

Rothschild devotes equal attention to each of the other four success factors (i.e. Adaptability, Talent, Influence, and Networks) during each of the four eras. Readers will also appreciate his skillful use of various devices that cluster key points. Briefly annotated checklists, for example, such as these: Common characteristics of all GE training programs (Pages 32 and 112), special benefits offered to electric utilities companies to ensure their growth and profitability (Page 92), GE's four-step process to recognize business opportunities (Pages 176-177), the steps Welch took to implement Six Sigma at GE (Page 214), how various CEOs successfully completed major change initiatives (Page 265), and finally, "some GE surprises and what the company did in response" (Pages 269-270). Other reader-friendly devices include boxed "Exhibits" that also cluster key points such as those that summarize the five ingreients for success for each of the four eras: "Living Better Electrically" (Edison through Swope and Young), Diversification and Decentralization (Wilson...Borch), Portfolio Leadership (Borch...Welch), and "Back to the Future" Strategy (Immelt). Rothschild also provides a "Highlights" section to introduce each of the four Parts and a "Takeaways" section at the conclusion of most chapters.

When concluding his book, William Rothschild acknowledges, "The GE Way doesn't always work consistently at GE; it can't possibly work for any other comany that attempts to embrace it indiscriminantly." Rather, he urges those in other companies to "adapt, rather than adopt, the GE approach" that he so brilliantly examines in this book.

The best, latest and most interesting insider revue of what has made General Electric the great enterprise it still is and why in these times of international growth and competition. Lessons for all companies.

I am a self-confessed business book junkie and how this book slipped past me is a mystery. This is the best business book I have ever read! Fellow reviewers described it as a page turner and I have to agree. A frequent comment about business books is that they are really pumped up magazine articles. Rest assured, there is nothing pumped up about this book. It is loaded with information. Best of all is the quality of mind behind the words. Nice work Mr.Rothschild! Five stars!

Most consumers know the ad slogan, "GE brings good things to life," but few know this complex company's fascinating 126-year history. GE is one of America's greatest business stories, spanning technological innovation, World War II, the politics of the New Deal, antitrust battles and the modern technological revolution. William Rothschild, a 30-year GE veteran, reflects on what makes GE great, including its distinctive leaders and the strategic management decisions that shaped the company. This well-researched book is also unusual because it is part memoir and part management study. It's not a polished work; Rothschild strays as he tells his personal story. The book also needs a company timeline to put events into perspective. Still, we consider this unusual corporate profile useful reading for developing managers.

I first thought about GE and its management practices in 1973 when a prospective client asked me for help in implementing a detailed strategic planning process and handed me a one-page version of the process (you can see a disguised version of that process on page 161 of this book). The initials in the corner were W. E. Rothschild, author of The Secret to GE's Success. Naturally, when I saw this book, I couldn't wait to see what this strategic planner extraordinaire had to say.

Most people see GE in terms of the Welch era. Why? Because that's when GE got the most press coverage. Also, the Immelt era's heritage isn't clear yet. It hasn't been long enough. Prior to that, few remember that Reg Jones was once considered a legendary CEO. Further back, only GE alumni can mention many names after Thomas Edison.

I found this book to be a helpful history of GE's continuing success, tying together many themes that I had missed. In addition, it was interesting to see how many GE "innovations" were really simplifications of earlier work . . . or continuations of long-held concentrations of focus.

Unlike many books that seek to pursue too many themes, Mr. Rothschild conveniently selected only five to illuminate and explore:

1. Choosing leaders well and pursuing an inclusive leadership style.

2. Finding effective ways to adapt to new conditions, success, and setbacks.

3. Identifying, nurturing, and encouraging excellent people.

4. Being prudently proactive in engaging stakeholders.

5. Creating connections to others that allow everyone to accomplish more.

Although Mr. Rothschild is appropriately proud of the company's success, he doesn't shrink from pointing out missteps, areas where processes need to be adjusted, and unnecessary delays in taking needed actions. He also wisely suggests that other companies not copy these practices, but rather adapt the practices to their own circumstances. In some conceptual exhibits, he provides helpful clues for how such adaptation might be done (see especially pages 59, 181, 208, 209, and 255).

Ultimately, of course, the limitation of a management book based on one company is that you don't see the lessons as clearly as you would if you had more comparisons. That's the strength of Built to Last, for example. As a result, I think most people will get more out of this book if they read Built to Last first.

The only point that I hear many management observers make about GE that Mr. Rothschild doesn't make is how slow GE usually is to adopt helpful, new practices that originated in other companies. You only see hints of that problem in the long delays involved in correcting some of the missteps. The press coverage of the company stresses the opposite point: Everything was invented by GE. But that's not really the case.

Good work, Mr. Rothschild.

I thoroughly enjoyed reading Bill Rothschild's latest book The secret of GE's Success. I only wish I was young enough to apply some of his insights into my own endeavors. Although Bill addresses his TAKEAWAYS to CEO's and upper management, this book is a "must read" for up-and-coming junior executives so they have a basis for comparison to their own organizations. I suspect that most organizations do little in the way of Succession Planning. Usually the CEO is secretly planning his own exit to his next opportunity while the Board is secretly searching for his replacement.

Bill Rothschild's "The Secret to GE's Success" is a great read. It is most enjoyable for GE alums and can be a learning tool for business people who can learn through Bill's insights about GE. It is a good read for anyone who has an interest im GE's fascinating history. I give it a 10!

Once again, Bill Rothschild's incisive analysis captures the "pearls" of wisdom and decisions that underpin General Electric, one of the century's enduring success stories. As the book so clearly points out, the leadership in talent, technology and financial structuring has adapted to changing global markets and environments. I am a GE alumna, and I still adhere to the tenets so well documented in the book.