Jack, GE, and Me
William D. Cohan's "Power Failure: The Rise and Fall of an American Icon"
I strongly recommend William D. Cohan’s new book about Jack Welch and GE. It’s on New Yorker, Financial Times, and Economist Best Books of 2022 lists.
GE’s 50-year arc from greatest corporation on the planet to dissolution is riveting, brought to life by Cohan’s extensive interviews with key players. He had remarkable access to Jack Welch, GE’s President and Chair from 1981 to 2001; Jeff Immelt, Jack’s successor from 2001 to 2017; and Bob Wright, the head of NBC and a GE Vice Chair through both Jack and Jeff’s tenure.
As it happens, I knew all three and worked for two of them. And, like so many ex-GE-ers, GE’s collapse affected our family, too. So, much of the book was personal for me.
My intersection with the story started in 1982 and lasted on an off for almost a decade. I joined NBC (then part of RCA)’s corporate planning staff in ‘82. I had been an associate at BCG prior to living in Paris for a year, and joined a small team in NYC tasked with bringing the latest in strategic planning to NBC.
After a few months I was promoted to the small strategic planning staff for RCA, the corporate parent.
I left in 1984 to return to Stanford for my MBA, during which time GE bid for and acquired RCA. That deal turned out to be, as Cohan notes, GE’s most successful acquisition ever.
After Stanford, I joined Mike Carpenter’s business development group on Jack Welch’ staff at GE. A few months later I was asked to join Bob Wright as he moved into the CEO role at NBC, so found myself back in NYC doing business development again for Bob. I worked with him for another few years, then was recruited away by Bill Ziff to run his non-U.S. interests.
All of which is a prolegomena to a few observations about Cohan’s book:
While at RCA in late ‘83 or early ‘84, I reached out to and met with Mike Carpenter at GE (also a BCG alum). Mike was running corporate development for Jack at the time. I suggested GE should consider buying RCA and gave him my personal view as to the price it would take. GE ultimately bought RCA — at that price. I was WAY out of bounds…
The corporate development group at GE was essentially an internal M&A shop. This was a complete contrast to RCA’s strategic planning function which under CEO Bob Frederick (who lost the race for GE CEO to Jack in ‘81) was a notoriously process-constrained goofiness. Every business unit in RCA had to complete a detailed bottoms-up five year strategic plan for Corporate — every year. This was in addition to and separate from the annual budgeting process, overseen by a different corporate officer (the CFO). I still have nightmares of the reams of white notebooks stuffed with plans staring down from my office walls.
By contrast, and as Cohan notes in the book, the M&A work we did for corporate development at GE on Jack’s staff was useful — and extraordinarily thorough. We were a small team of ex-consultants, and took a consulting, rather than investment banking, dive into every deal. Owens Corning was a friendly potential target during my tenure. We spent weeks modelling the long-term integration economics, including mapping out exactly how and where the two companies’ operations would combine — down to decisions about locations and front-line operational management. The work included multiple direct reviews with Jack — and we ultimately passed on the deal. ’Deal fever’ was broken by analysis.
Jack and Bob dropped three of us into NBC in similar roles at around the same time. Dave Zaslav, Tom Rogers and I actually all reported to Ellen Agress who was with NBC when GE acquired RCA. I consider Dave a friend (and am rooting for him with Warner Bros. Discovery) — and Ellen didn’t get the credit she deserves for corralling our three hyper-ambitious egos into productive work.
We had a remarkable run at NBC given the legal constraints on expansion for a broadcast network. We launched CNBC and bought its competitor FNN; sold the radio division ,bought a TV station in Miami, and financed the first commercial TV network in New Zealand; saw ratings and profits soar even as we dealt with Dave Letterman’s ‘GE Handshake’ mocking GE’s ownership of NBC; and tried hard to buy a movie studio to strengthen the network’s vertical integration. Bob and the team ultimately found a way to get that done, buying Universal after I left, a transaction which, as Cohan points out, gave GE a critically valuable asset to sell to Comcast when the company was reeling after the 2008 financial decline.
One of my roles at NBC involved managing all NBC’s non-U.S. interests. GE (Jack) was on a kick to globalize every business line. The legal constraints for NBC and international media ownership in that era limited our options, but my explorations meant time abroad with, err, ‘small’ personalities including Robert Maxwell, Rupert Murdoch, Sylvio Berlusconi, and Leo Kirch. (Sidenote: I tried to convince Dan Ritchie, then running Group W for Westinghouse, to sell the group to NBC. Decades later, Dan and I reunited in Denver when as Chair of the Board of Trustees he oversaw my hiring as Dean of Engineering and Computer Science at the University of Denver. Roles neither of us anticipated back in the ‘80s… )
Like all GE ‘hi potential’ execs, my career path with the corporation would have meant frequent unpredictable moves around the world. My next stop after NBC was to be either Singapore or Louisville — where I would have worked for Jeff Immelt in appliances. I talked to Jeff and we were entranced by Singapore, but ultimately my wife and I decided we didn’t want a peripatetic GE career. I loved media and tech, so in the early ‘90s Bill Ziff recruited me away to run his non-U.S. operations.
Jack and Bob’s personalities (and Jeff’s, though I knew him less well) shine through Cohan’s book. Jack was warm, prickly, empathetic, and always better-versed on your business than you were. Bob was analytical, incredibly hard-working, and dedicated to moving NBC out of its broadcast confines no matter how little support he had along the way. Jeff had a big compelling personality and sold well. Everyone was highly competitive, and knew GE was the best company in the world. Cohan talked to many others for the book, including most of those considered for CEO over the decades. All of our careers were curated through GE’s high potential executive talent management system, which was an extraordinary asset significantly responsible for GE’s ability to thrive as a conglomerate. An asset if you were a white male who golfed, that is…
In my next post I’ll talk about where I felt the book missed the mark … and in the interim I hope you’ll give it a read!
Happy New Year!
