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jerryking : jack_welch   23

GE: industrial stalwart contemplates a general overhaul
OCTOBER 5, 2018 | Financial Times | by Ed Crooks in New York.

“GE Power is at death’s door,” says Scott Davis, an analyst at Melius Research. “It’s going to require a massive change in strategy to fix it.”

The Alstom deal is far from being GE’s only strategic mis-step. But it is emblematic of two of the company’s flaws: a weakness for dealmaking, and an inability to respond effectively to a changing market. Together, those failings go a long way to explaining why one of the greatest names in American business, an original member of the Dow Jones Industrial Average at its creation in 1896, has lost more than 80 per cent of its market capitalisation since 2000......while GE’s leaders were focused on a deal that might have been perfect 10 or 20 years ago, they were underestimating the scale of the changes hitting the electricity industry. As the costs of wind and solar power have plunged, they have become competitive against the gas-fired and coal-fired power plants that are GE and Alstom’s forte. It is a mistake that companies often make at times of structural change, says Kingsmill Bond of the Carbon Tracker Initiative: “They confused the current size of the market with the future growth of the market.”.....As the scale of the problem emerged, Mr Flannery moved to cut costs. Last December he announced 12,000 jobs would go from the power division. But reducing headcount is slow work in Europe, especially in France, where Mr Immelt had pledged to create a net 1,000 additional jobs by the end of 2018......The urgency of the crisis creates opportunities to make radical changes. A group of investors including hedge fund manager Sir Christopher Hohn of the Children’s Investment Fund on Friday published a letter to Mr Culp, urging him to scale back investment in gas and coal power and embrace clean energy.....Giving up on selling new turbines to concentrate on the more lucrative services business would be a momentous step, but Mr Davis says that like General Motors during the 2008 financial crisis, the business is in urgent need of a radical rethink.
Alstom  CEOs  change  cost-cutting  creating_opportunities  deal-making  DJIA  energy  exits  GE  Jack_Welch  Jeffrey_Immelt  John_Flannery  shifting_tastes  Siemens  structural_change 
october 2018 by jerryking
The High Cost of Raising Prices - WSJ
By Andy Kessler
July 30, 2017

The more prices rise, the more customers bolt. It’s like running up a down escalator and never getting to the top. With the stock market hitting highs just about every day, investors need to be wary of companies that raise prices to make their numbers. These stocks make for spectacular sell-offs on even the slightest earnings miss......I had a friend who worked at General Electric for decades. He told me that in strategy sessions with his management, Jack Welch would constantly berate them, saying, “Any idiot can raise prices.” Except he used a stronger word than idiot to coax them into squeezing out costs, adding features, improving services and generally delighting customers. Contrast this with Berkshire Hathaway . Vice Chairman Charlie Munger found that with See’s Candies “we could raise prices 10% a year and no one cared. Learning that changed Berkshire.” .........There’s a long list of price bumpers. Walk down any supermarket aisle. Kellogg’s prices constantly snap, crackle and mostly pop. Procter & Gamble toothpaste sizes shrink faster than my cavity count, always less for the same price. Now private-equity firms are circling P&G. Same for Nestlé . Expect rising beer and liquor prices soon....Empires are lost on rising prices. Until recently, rather than innovate in mobile or cloud computing, Microsoft kept raising the price of its Windows operating system to computer manufacturers. Tablets and phones ate their lunch. Fees rose at eBay until Amazon took its growth away. .........Increasing prices attracts others to attack your market. Amazon’s Jeff Bezos warns: “Your margin is my opportunity.”....Competition solves much of this problem. Investors love protected businesses, but eventually relentless price increases kill them all. Consumers are the kangaroo at the bar in the old cartoon: The bartender says, “Say, we don’t get a lot of kangaroos in here.” The kangaroo replies, “No, and with these prices, I can see why!” Call me a kangaroo, but I prefer to invest in companies that lower prices and offer more.
Andy_Kessler  pricing  price_hikes  drawbacks  margins  Charlie_Munger  CPG  shareholder_activism  P&G  Nestlé  Kellogg  Jack_Welch  GE  large_companies  cost-cutting  Amazon  Jeff_Bezos  staying_hungry  delighting_customers  high-cost 
july 2017 by jerryking
The Economy Needs Amazons, but It Mostly Has GEs
the country as a whole badly needs some rules-defying risk-taking. For business, that means a bit more Amazon in the boardroom and a bit less GE....The purchase of Whole Foods by Amazon introduced a level of volatility and turmoil (at least singularly to the retail sector) which had been absent from the market for a long time....The rest of the market remained placid. And months of historically low volatility has begun to look like dangerous complacency....... another, potentially more troubling explanation: stagnation. Muted markets may be an inevitable product of steady, sluggish growth, low and predictable interest rates, declining business startups and failures, and decreased competition. In other words, the problem is, there aren’t enough Amazons disrupting the stock market and the economy.....Jeffrey Bezos founded Amazon in 1994, he has prioritized expansion and innovation ahead of profit. In its early years, free cash flow—cash from operations minus CAPEX—hovered around zero. Mr. Bezos approaches new products like a VC. Many will flop (like the Fire smartphone), but some will be home runs (e.g. AWS). Amazon launched Prime, which offers free delivery in exchange for an annual fee, in 2005. John Blackledge, notes Amazon has repeatedly innovated in ways that make Prime even more valuable to subscribers.......Amazon is now profitable, yet cash retention remains secondary to building great products and delighting and retaining customers.

....If Amazon is one extreme in how companies invest, General ElectricCo. is the other. It has long been fastidious about capital and cash deployment......CEO Jack Welch perfected this approach in the 1990s.. it continued under Jeffrey Immelt. Last week, Mr. Immelt said he would retire, after 16 years struggling to restore growth. In part, that reflected how financial engineering had inflated profits under Mr. Welch. Yet Mr. Immelt ’s investment decisions too often chased the conventional wisdom on Wall Street and in Washington. ...........growth is hard for any company that dominates its markets as much as GE does. GE’s size also attracts debilitating political scrutiny. ....In response to new regulations and pressure from Wall Street, Mr. Immelt largely dismantled the business...........Investors still want GE to return cash to shareholders, and it has obliged,.....while good for shareholders in the short run, this is no recipe for growth in the long run. GE’s cash flow is shrinking despite the company’s focus on preserving it, while Amazon’s is growing despite that company’s readiness to spend it.......North American boardrooms desparately needs some rules-defying risk-taking. For business, that means a bit more Amazon in the boardroom and a bit less GE

[ See John Authers article which references Vix]

The "Minsky Moment" occurs when investors realize that they have paid far too much for the credits that have bought, no buyers can be found, and the system collapses. Aka Wile E. Coyote running-off-a-cliff....The greatest dangers to us are not from things we perceive to be high-risk, because we generally treat them carefully. Trouble arises from that which we perceive to be low-risk.
digital_economy  Amazon  GE  Amazon_Prime  risk-taking  volatility  Greg_Ip  stagnation  cash_flows  long-term  growth  start_ups  complacency  instability  conventional_wisdom  Jeffrey_Immelt  Jack_Welch  conglomerates  delighting_customers  capital_allocation  Jeff_Bezos  financial_engineering  rule_breaking 
june 2017 by jerryking
Feeling uncertain, CEO? Better go on the attack - The Globe and Mail
HARVEY SCHACHTER
Special to The Globe and Mail
Published Tuesday, May. 05 2015

Taking control of uncertainty is the fundamental leadership challenge of our time … ” he writes in The Attacker’s Advantage. “The advantage now goes to those who create change, not just learn to live with it. Instead of waiting and reacting, such leaders immerse themselves in the ambiguities of the external environment, sort through them before things are settled and known, set a path, and steer the organization decisively onto it.”
algorithms  ambiguities  anomalies  books  change  data data_driven  gurus Harvey_Schachter  Jack_Welch  leadership  mathematics  management_consulting  offense  offensive_tactics  Ram_Charan  uncertainty  
may 2015 by jerryking
Jack Welch: 'Rank-and-Yank'? That's Not How It's Done - WSJ.com
Nov. 14, 2013 | WSJ| By Jack Welch

Unlike "rank-and-yank"—differentiation isn't about corporate plots, secrecy or purges. It's about building great teams and great companies through consistency, transparency and candor. It's about aligning performance with the organization's mission and values. It's about making sure that all employees know where they stand. Differentiation is nuanced, humane, and occasionally complex, and it has been used successfully by companies for decades....Differentiation starts with communication—exhaustive communication—of a company's mission (where it's going) and its values (the behaviors that are going to get it there)....Differentiation requires managers to let every employee know where he or she stands—how they're doing today, both quantitatively and qualitatively, and what their future with the company looks like. Are they a star in terms of both results and values (say, in the top 20% of the team), about average (say, about 70%), or not up to expectations (the bottom 10%)? Note: The 20-70-10 distribution is not set in stone. Some companies use A, B, and C grades, and there are other approaches as well.

Without a doubt, some companies use differentiation but leave this "grading" part out....The final component that makes differentiation work so effectively is feedback and coaching. Your stars know they are loved and rarely leave. Those in the middle 70% know that they are appreciated, and they receive clear guidance about how to improve their performance. And the bottom 10% is never surprised when the conversation sometimes turns, after a year of candid appraisals, to moving on.
Jack_Welch  talent_management  performance  performance_reviews  assessments_&_evaluations 
november 2013 by jerryking
Women, Welch Clash at Forum
May 4, 2012 | WSJ | By JOHN BUSSEY.

He had this advice for women who want to get ahead: Grab tough assignments to prove yourself, get line experience, and embrace serious performance reviews and the coaching inherent in them.

"Without a rigorous appraisal system, without you knowing where you stand...and how you can improve, none of these 'help' programs that were up there are going to be worth much to you," he said. Mr. Welch said later that the appraisal "is the best way to attack bias" because the facts go into the document, which both parties have to sign.
Jack_Welch  GE  work_life_balance  rigour  gender_gap  movingonup  executive_management  performance  performance_reviews 
may 2012 by jerryking
Dialing For Growth
OCTOBER 30, 2006 | BusinessWeek |By Jack and Suzy Welch
Jack and Suzy Welch

A red flag here, however. Visiting companies to watch them in action can be great, but the exercise is pointless unless your own people are ready to embrace outside ideas. If they're not, some adjustment to your culture is probably necessary. To do that, you've got to kill any not-invented-here syndrome floating around your organization and replace it with a new value of open-mindedness. You can jump-start that process by using praise, money, and promotions to celebrate employees who find outside ideas and bring them back home. Before you know it, you'll find yourself deluged with good ideas from every quarter.
Jack_Welch  GE  advice  growth  not-invented-here  benchmarking  research  research_methods  learning_journeys 
april 2012 by jerryking
Hiring Wrong—And Right
JANUARY 29, 2007| BusinessWeek |By Jack and Suzy Welch

the best way to handle hiring mistakes is to not hire them in the first place. Yes, bringing in the right people is, as noted above, a tough business fraught with pitfalls. But you can really improve your chances if you fight like hell against the three main hiring impulses that most often get managers into trouble.

The first is using your gut. Don't! When you have a big, crucial job opening to fill, it's just too easy to fall in love with a shiny new candidate who is on his best behavior, telling you exactly what you want to hear and looking like the answer to all your prayers. That's why you can never hire alone. Make sure a team coolly analyzes the candidate's credentials and conducts interviews. And by all means, make sure the team includes at least one real hard-nose—the kind of naysayer who is particularly good at sussing out the job fit and sniffing out the phonies.

The second instinct you have to fight is what we call the "recommendation reflex," in which managers rationalize away negative references with excuses like: "Well, our job is different." You should seek out your own references to call, not just the ones provided by the candidate, and force yourself to listen to what they have to tell you even if it ruins the pretty picture you are painting in your head.

Finally, fight the impulse to do all the talking. Yes, you want to sell your job, but not at all costs. In interviews, ask candidates about their last job—and then shut up for a good, long while. As they describe what they liked and what they didn't, you will likely hear much of what you really need to know about fit.

True, you may still make a mistake, but at least it won't be because you rushed. Save the speed for fixing things if they unfortunately go awry.
Jack_Welch  hiring  intuition  mistakes  decision_making  Octothorpe_Software  biases  impulse_control  gut_feelings  the_right_people 
october 2011 by jerryking
"The Best Advice I Ever Got" - March 21, 2005
March 21, 2005 | Fortune Magazine | By INTERVIEWERS Julia Boorstin.

Brian Grazer
"My whole career has been built on one piece of advice that came from two people: [MCA founder] Jules Stein and [former MCA chairman] Lew Wasserman. In 1975 I was a law clerk at Warner Bros. I'd spent about a year trying to get a meeting with these two men. Finally they let me in to see them. They both said, separately, 'In order for you to be in the entertainment business, you have to have leverage. Since you have none--no money, no pedigree, no valuable relationships--you must have creative leverage. That exists only in your mind. So you need to write--put what's in your mind on paper. Then you'll own a piece of paper. That's leverage.'

"With that advice, I wrote the story that became Splash, which was a fantasy that I had about meeting a mermaid. For years, I sent registered letters to myself--movie concepts and other ideas--so that I had my ideas officially on paper. I have about 1,000 letters in a vault. To this day, I feel that my real power is only that--ideas and the confidence to write them down."
advice  career  inspiration  entrepreneur  Managing_Your_Career  Clayton_Christensen  humility  MBAs  Siemens  Salesforce  Mickey_Drexler  JetBlue  Peter_Drucker  Jim_Collins  Rick_Warren  leverage  Xerox  Andy_Grove  conventional_wisdom  Richard_Parsons  negotiations  Jack_Welch  Vivek_Paul  thinking  Starbucks  Warren_Bennis  Richard_Branson  Warren_Buffett  Brian_Grazer  creating_valuable_content  Lew_Wasserman 
december 2010 by jerryking
Jack Welch Blasts H-P’s Board - WSJ @ World Business Forum - WSJ
October 5, 2010 | Wall Street Journal | By Paul Glader. “The
Hewlett-Packard board has committed sins over the last 10 years,” said
Mr. Welch. “They have not done one of the primary jobs of a board, which
is to prepare the next generation of leadership.” Leadership
development, Mr. Welch contended, “was very low on the priority of
leadership at that company.” Mr. Welch said a board’s job is to pick
CEOs, help them shape strategy, make them feel good about themselves,
and, if the CEO isn’t doing a good job, to “get them the hell out of
there.”
Jack_Welch  HP  boards_&_directors_&_governance  leadership_development 
october 2010 by jerryking
Tiger Woods and the Superstar Effect - WSJ.com
APRIL 3, 2010 | Wall Street Journal | By JONAH LEHRER. The
Superstar Effect. From the playing field to the boardroom, when one
competitor is clearly the best, the others don't step up their game—they
give up. As Tiger Woods returns to golf, Jonah Lehrer looks at the
nature of competition.
Tiger_Woods  competition  overachievers  Jonah_Lehrer  GE  Jack_Welch  winner-take-all  blockbusters  superstars  high-achieving 
april 2010 by jerryking
Dear Graduate...
JUNE 19, 2006 | Business Week | By Jack and Suzy Welch. (1) As
an ambitious 22-year-old readying to enter the corporate world, how can I
quickly distinguish myself as a winner? -- Dain Zaitz, Corvallis, Ore.

One gets ahead by over-delivering. Start thinking big. Go beyond being the grunt assigned. Do the extra legwork and data-crunching to give [clients] something that really expands their thinking—an analysis, for instance, of how an entire industry might play out over the next three years. What new companies and products might emerge? What technologies could change the game? Could someone, perhaps the client's own company, move production to China?

(2) Revenue growth is at the top of my to-do list. What should I look
for in hiring great sales professionals? -- John Cioffi, Westfield, N.J.
questions  hiring  recruiting  Managing_Your_Career  advice  Jack_Welch  strategic_thinking  anticipating  new_graduates  chutzpah  movingonup  overdeliver  Pablo_Picasso  individual_initiative  generating_strategic_options  independent_viewpoints  thinking_big  game_changers 
november 2009 by jerryking
The Turnaround Man's Last Speech
Undated retirement speech by Jack Welch, that appears in G&M column by George Stalk Jr. of BCG.
Jack_Welch  leadership  GE  turnarounds  managing_people  George_Stalk_Jr.  filetype:pdf  media:document 
january 2009 by jerryking

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