Jack Welch has died
wsj.comSteve Ballmer revered Jack Welch's rank-and-yank management style.
During the 2000s and early 2010s Microsoft's stack-rank reviews were infamous for the internal politics created. Didn't matter if you had a full team of top-tier engineers, the bottom 15% WAS going to get managed out. Savvy managers would hire low-tier performers to protect the productive ones.
That's the only lens through which I have to view Mr. Welch's contributions unfortunately.
https://en.wikipedia.org/wiki/Vitality_curve
https://money.cnn.com/2013/11/13/technology/enterprise/micro...
Contrast with W. Edwards Deming's approach that stresses the systematics of the organization and considers rank-and-yank a symptom of bad management:
https://en.wikipedia.org/wiki/W._Edwards_Deming#Seven_Deadly...
As far as Welch is concerned, I'm pretty certain that his system was never going to find him in the bottom 10% of any possible ranking. Call it Gödel's Management Strategy.
I identify as software engineer that works with software, processes and a little bit of machines and maths, but have also run a few business in partnership with others.
Years ago in an effort at self improvement I did a postgrad course on software quality. Studying what Deming has to say was a big part of it. Turns out it is not so easy to apply it to engineering (as opposed to manufacturing what the engineers designed), and the ham fisted approaches the postgrad course was promoting at the time (like CMM) didn't look promising, and with the benefit of 20 years hindsight now look farcical.
Nonetheless, his dogma of extracting statistically valid measures of processes, propagating those through the organisation so harvesting everyone's ideas on how to improve them struck a deep cord, and it's something that I've tried to apply ever since. I've been exposed to other MBA related ideas, but that is the only one that ever made sense to me.
It's a pity it's so damned hard to apply to software engineering. It has one one notable effect - I'm now seen by my co-workers as near obsessive about collecting and monitoring failure rates - whether they be bugs or things like people reporting software being difficult to use.
+1 for Deming
IIRC Welch came up with rank-and-yank because he needed to lay people off and decided he wanted to be "fair" about it and not lay off his best performers.
And somehow that got cargo-culted into "we should continuously get rid of the bottom X% of people all the time".
> And somehow that got cargo-culted into…
his book maybe?
He was still defending the practice in 2005: https://usatoday30.usatoday.com/educate/college/careers/Advi...
He seems to suggest not just getting rid of them, rather letting them know where they stand in the hope they move on or take it upon themselves to improve.
> You've got a bad take on it. It's letting the bottom 10% know where they are and then giving them a chance to move on. About 70% (of the bottom 10%) leave on their own. Who wants to be on the bottom once they know it? You don't fire them. That's being mean.
Though of course firing is always an option especially in the USA.
From that article the key point I found was that he would rather expend company resources nurturing top performers instead of salvaging the bottom performers. He believes it's a much better investment.
Well, at some point in American business culture it does seem like a number of people did lose sight and become convinced that the only way to deliver shareholder value is to lay off continuously.
It looks like this became the basis of American economy. And you can't loose your job, because you'll miss your mortgage or education payments and loose your health care. So you must do anything your employer tell you to do.
> because you'll miss your mortgage or education payments and loose your health care.
This is why the sensible thing to do is to save up a cushion of 6 months. You can continue with your employer health care with COBRA for 6 months or a year.
You‘re saying this as if it were realistic for the majority of people to save up a cushion of 6 months in a reasonable time frame (or ever).
A majority of people are significantly above the poverty line. If they're living hand-to-mouth, they are mismanaging their finances.
For example, I know a fellow who told me he could not handle the slightest disruption in his paycheck. He was driving a new car, living in new house, wore expensive clothes, and was starting a family.
A friend of mine living in an apartment told me he was unable to pay his bills. I asked him what the payment was on his new car. I suggested he sell the car, and buy a car he could pay cash for. He surprised me by following my advice and was able to reduce his stress about his finances.
My father, an officer in the AF, was once tasked with counseling the privates on their finances, as many were unable to pay their bills on the local economy. (The AF really tries to be a good citizen in the community where the base is located.)
The privates were paid every two weeks. Half of them drank their paycheck away and ate steak for the first week, and begged/borrowed/stiffed others for money the second. They received the same paychecks, but half could not manage their finances. My father would counsel them, work up budgets for them, all for naught.
A lot of people overspend their income because they're eating out. Restaurants are an extremely expensive way to get fed. Even a quarter pounder at McD's is $6, but I can get a half pound of good steak from the supermarket for $2. My drip coffee costs me $.03 per cup, compared to $4 at Starbucks. You can fry yourself 3 eggs for $.50.
Not sure where I read this, but there was some article about the top skills you can learn that can help you save up money. Cooking was the top skill.
Apart from the upfront restaurant bills, also you can save money health wise on the longer run.
I'd personally file it under the entertainment budget too. It's fun!
Part of the problem here is that restaurants in America are extremely expensive. It's cheaper to eat out in other industrialized nations in my experience. Worse, they try to hide the prices from you by not including tax in the advertised price, and also expecting a "tip" for the service because they don't pay their servers.
> A majority of people are significantly above the poverty line. If they're living hand-to-mouth, they are mismanaging their finances.
Or, another scenario, the 'poverty line' is arbitrary and hardly an indicator of universal financial power.
In other words : the poverty salary 'line' tells you nothing of burden, it's just a magic number. If an individual has multiple unknown burdens, their 'poverty line' is at a much different , unknown, level.
I live in California, mostly. I know of families that live (far) below the 'Poverty Line', but because they send everything they can back to their home country for the rest of their family to live on.
Suddenly an individual at the poverty line is supporting 3-7 people in another country; and has no real legal way to justify or exemplify the practice in any legal financial way that would signify their increased burden - they become essentially a lost statistic and generally lie on their taxes due to fear of losing the arrangement.
Individuals that lead this style of life tend to go back home periodically simply because the burden of living in the US with a sub-poverty income isn't realistic.
tl;dr : The poverty income line alone means next to nothing in personal context. Don't assume that you can dwindle every persons' life down to fitting within it, that's not realistic. Saving money is absolutely important, I agree, but let's not just assume that that kind of financial flexibility exists for every individual. It'd be nice, but it's fantasy.
> exists for every individual
I said "a majority of people". Not every individual.
It's not easy, but I think a lot of the people who don't save, actually could. Part of the problem is people don't think they can save "enough to matter", so they never start. Even starting with just tossing $5 or $10 a month into savings account can help. It kickstarts the habit, at least, and often people can later justify raising that amount or putting in a little more here and there.
For some other people, if they'd drop the "keeping up with the Joneses" mentality even just a little bit, they could develop significant savings.
Yes, there are many people in the US who are just barely getting by, and can't meaningfully save without making cuts to essential spending, but that certainly doesn't describe everyone who currently lives paycheck-to-paycheck.
If they can't, then they shouldn't be homeowners. It's not a choice for everyone. Home ownership is a liability.
Signed, a homeowner who sees a lot of his less well off neighbors making much more extrvagant purchases than he does.
Braces for downvoting
But the <your-nation-here> dream!
If you're a republican, people can't do this because of their failings and choices.
If you're a democrat, it's because the economic deck is stacked against people.
I thought that a very large majority of credit card debt was healthcare costs and other structural life costs, so that is score one for the democrat view, although we are a very unhealthy population (so back to the republican view a bit)
Then again, the real estate bubble showed that people were getting way too much house (republican view)... of course enabled by almost no oversight of the lending and financials underling it (democrat view).
Poverty and unhealthy eating goes hand in hand. If you work for more than 8 hours a day and/or with long commutes, how on earth will you have time to cook? The US has a huge poverty problem that is well-documented in countless studies. It has nothing to do with republicans vs democrats, it has everything to do with believing the facts!
The US does have a huge poverty problem, but that's not the whole story. There's tons of middle-class people living paycheck-to-paycheck because they just have to drive a BMW or have some giant house they don't need, or eat out all the time and get two glasses of wine with each dinner. Yeah, this doesn't describe the poor people getting by on minimum wage, but there's countless $50-100k people who this describes perfectly.
Do you have any evidence to back up your claims? Because I think you are just regurgitating right-wing talking points. The myth of the poor person who is poor only because he or she spends way to much money on extravaganza.
Oh please; I see it all the time, including in my own family. "Right-wing talking points"? From what I can tell, it's frequently the Trump voters who this describes well.
Did you even read my post? I specifically noted this doesn't apply to poor people (the ones the right-wingers will claim are only poor because of bad choices), I'm addressing middle-class and up people.
> how on earth will you have time to cook?
As a non-cook myself, I can fry some eggs in 3 minutes or so, and a steak a bit longer. Sometimes I'll dump a bowl of frozen veggies into a bowl, put a pat of butter on top, microwave for a couple minutes, and it's ready to eat. A can of beans takes a couple minutes.
The idea that to eat decent food requires much prep time in the kitchen isn't true.
You also have to drive to the supermarket and take care of the dirty dishes. But you are right, it's not the minutes per se, it is that if you work more than 8 hours/day, you don't have much energy for anything else.
I feel desperately sorry for Americans when it comes to health care.
Which Americans though?
There are numerous Americans and American institutions whose work specifically involves pushing the interests of insurers, pharma and hospitals on Capitol Hill, against those of average people who work minimum wage jobs and can't afford basic coverage.
Won't someone think of the executives, doctors, lawyers, and lobbyists? They have feelings too.
Why would you need COBRA? You can go to healthcare.gov and buy health insurance that is probably as good or better than what most employers offer. And you wouldn’t have to pay for months you didn’t need healthcare.
Exchange health insurance is still pretty unaffordable if you're unemployed or underemployed, and it's much less likely than employer health insurance to cover medical conditions that aren't required by law to be covered (e.g. gender dysphoria).
Our system is messed up.
I purchase health insurance for my businesses, and it all seems the same to me, cost and coverage wise. I guess it might be a little cheaper if the company has a very young workforce.
Large companies all custom-package their own insurance instead of just buying off-the-shelf plans.
I would say it's become the basis of worldwide modern central banking capitalism, gas and water socialist countries included.
Can't tell if this is meant as sarcasm or truthfully :-)
Actually cutting cost usually comes first to the mind of the investment bankers because:
1. Cutting cost will always yield a quick gain
2. It's a lot more difficult to turn it around and win in the long term
3. Even if the banker wants a long term picture, cutting cost is not necessarily a bad idea.
Yeah, it should really only be a periodic thing every 10 years, but really that's what "reorgs" mean.
Add to that that stack ranking has a tendency to devolve into a popularity contest and that it most rewards those who do the best job of convincing everyone that their job is hard then one has to ask if this is really the best system for a group of people that trends towards being introverted.
I worked at Microsoft for a short time and got burned pretty badly by the stack ranking system.
In my first year there I had 3 different managers, so by the time my review came around, nobody really knew me very well. At least not well enough to fight for me in the ranking meetings.
So ultimately, I received the lowest ranking. What made it most annoying is that it was prefaced with a speech about how I was doing a good job, but someone had to get that ranking. This was just me.
About the only good advice that manager gave me was that if this happened again, I should leave the company because it was going to be an endless spiral that I couldn't get out of.
It was actually the last time they did the stack ranking and I left before finding out if things got any better. The whole project I was on got canceled a few weeks after I left anyway.
Hiring folks to act as telomeres for your team seems so cruel.
Ooh. This is good. When I write my best selling Management Genetics(R) book filled with cellular jargon to describe The Business Double Helix(R), I am totally using this. With attribution, of course.
Ugh, I hate it already. I am sure it would be wildly successful.
Why? Those are people who couldn't get a better job anyway.
They were people who thought they are getting real job, but have been set up to fail from day one. Just because you pay people some money does not mean it is ok to use them like toys.
Ballmer actually left a better company than Welch.
Because of policies like this or in spite of them?
Both. I've posted this before about Ballmer, but I'll repost:
He consistently increased earnings via Windows and Office during his tenure as CEO. He was a very good businessman.
He was not, however, a product guy. Witness their failures with the Zune, mobile, search, and early cloud computing. His problem was that he always tried to do what would be best for Microsoft first and not the customer. You can get away with this if you already have an entrenched install base (windows/office), but with net new products people will look at what's best for them first. Even with developers developers developers he tried too hard to get people to use pure MS tech and made developing for the web on MS ugly if you are using anything other than .NET. He didn't see the geeks learning to program in their basement or dorm rooms who ended up using free software instead of going through any "free" channels that may have been available to them (were they?). The result is a generation of developers on Macs and to a lesser extent linux. MS is only now catering to them.
Funny enough, thinking of the customer is what MS did with the xbox and it worked out well enough.
Ballmer also didn’t create a personality cult around himself. He actually seemed ok with being viewed as a clown as long as it helped Microsoft.
Great point.
Welch also invented corporate raiding by management. When he started, employees owned 0, when finished 31 percent of GE, with majority of 31 owned by management. This effectively transferred 1/3 of value from shareholders to management. Since then same thing happens with most other corporations.
But at the same time enterprize value increased 40x. Paying 1/3 of the gains to management seems fair given the performance.
But it's more complex than this. Would it increase as much without paying 1/3? Were short-term gains optimized at the expense of sustainable business?
Didn't they start doing leveraged finacial product investments and stuff since it was heads their massive stock option incentives pay off, tails no big loss for them.
Was that 31percent purchased or seized?
Granted as stock options or restricted stock units.
Granted by dilution
I find Netflix's model works better: allocating resources by visibility of a team. Roughly speaking, a manager gets a chunk of budget from her manager, and she can decide how big a package she gives to each of her team members. The more important a team becomes, the more budget the team gets. The more visible a person becomes to her manager, the more likely this person will get larger package. This comes with the following nuances: * A team member is responsible for her visibility only to her team and her manager. There is really no need for any popularity contest if the team is small enough. I deem it as fair as it can get. * A manager can definitely abuse the system, but then the team would suffer churn and productivity loss, and the manager would be punished. If the team performed anyway with little churn despite the manager's misbehavior, well, did the manager really misbehaved? * To make the system work, the management chain needs to be perceptive, and teams need to be small. Netflix delivered both, which showed that Reed Hastings is a truly great CEO.
I may not agree completely with Netflix' philosophy but I love that it has "tests", like "would you fight for a person to stay? if not, let her go" https://jobs.netflix.com/culture
With the caveat that you need to be like Netflix to pull this off. Most companies don't have the endless talent pool to feed from that makes this strategy work. So many have to settle for, "Is this person better than no one?
>>she can decide how big a package she gives to each of her team members
In my experience this turns out be a huge scam. Worse a legally sanctioned scam.
Say she had 11 members in her team. She will give $90 to her pet, and $1 each to the remaining 10. That is how this works on the longer run. The definition of a 'high performer' is often hazy here, and a case can be built up to justify giving the money to whom she wants.
Eventually it turns out there are enormous cartel like structures, you have to be in them to get paid up well. Or you slog like a donkey and quit eventually.
Nope. Netflix would not allow that to happen. There is always a balance and check, freedom and responsibility, right?
Who is watching? And who will keep things in check?
People who are supposed to approve, audit and verify are a part of the same system playing with the same incentives.
They called him “neutron Jack” for that very reason.
That was more because of his restructuring in the early 90s. "As with a neutron bomb, the buildings are still standing but the people are gone." He didn't seem to understand GE's broad products businesses but did understand finance, so he continuously closed those operations.
> He didn't seem to understand GE's broad products businesses but did understand finance, so he continuously closed those operations.
Uh...no. He was a trained chemical engineer, and understood products, manufacturing, and operations perfectly well.
In his own words, here's why he emphasized finance:
"My gut told me that compared to the industrial operations I did know, this business [GE Capital] seemed an easy way to make money. You didn't have to invest heavily in R&D, build factories, and bend metal day after day. You didn't have to build scale to be competitive. The business was all about intellectual capital - finding smart and creative people and then using GE's strong balance sheet. This thing looked like a 'gold mine' to me." (emphasis mine)
"[GE Capital] seemed an easy way to make money...This thing looked like a 'gold mine' to me."
A good MBA finance curriculum might kick off with the Modigliani-Miller theorem (M&M), which basically says:
1. Theoretically, you can't create value through your mix of financing. It doesn't matter whether you use 100% equity, 100% debt, or 50/50, your mix of financing won't create value (unlike good R&D for example).
2. #1 above is predicated on the absence of tax incentives, bankruptcy costs, agency costs, and asymmetric information, and the market being efficient.
The creators of M&M believed that the assumptions in #2 are mostly false most of the time. The beauty of the theory is in the assumptions themselves. Prescriptively, it basically says that your mix of financing matters only insofar as the assumptions in #2 are false for your project at your company in your country. If you start a division like GE Finance, and you start using complicated financial derivatives, you have several things to prove. You have to show which M&M assumptions are false for your company, to what degree they are false, that your suggested method of financing will take advantage of the M&M violations, and that the magnitude of financing matches the magnitude of M&M assumption violation (this last bit is important, GE really went hog wild with derivatives in a way that was completely not justified). GE Capital never passed the M&M sniff test.
huh? you don't have this right.
Modigliani-Miller refers to the financial structure of your corporation, GE in this case: it refers to the mix of capital that GE raises from investors (debt + equity). To give a simple example to illustrate, the value of your lemonade stand as a business is based on your revenue minus your costs, it's based on your "business". You need to raise money to buy your raw materials and equipment to get started or expand? Whether you borrow that money or sell shares in your lemonade stand does not change the value of your business. The bit about absence of tax incentives is because you can write off the interest on debt from the income taxes, but the dividends you pay actually get taxed, so there is an incentive for the equity holders to raise some money via debt rather than equity; but the point that M&M makes remains true.
GE Capital did not fund GE, so M&M doesn't apply.
M&M would apply to GE's ownership of GE Capital, but if all the debt and equity is owned by one entity there really isn't a difference between them (see Humpty Dumpty, back together again).
It's quite common for large industrial companies to have large credit arms: oil companies extend credit to gas stations to buy their gas, just like automobile manufacturers finance car purchases. GE was no different. Leveraging their expertise in finance was a natural extension of the business, and financial firms sometimes fail like any other business, whether they are standalone or wholly owned subsidiaries.
I'm aware that GE Capital extended credit to suppliers (good, sometimes). However, my understanding is that it also enabled greater use of financing through off-balance-sheet derivatives for the core entity (bad). GE tried to create value through GE Capital, and it nearly destroyed the company. It's actually a good illustration of the agency costs of debt mentioned by M&M.
I stand corrected.
I think a better way to remember him is his insistence that all GE's company's be either first or second in their market. So under performers got a chance to go for it and if they failed they were sold.
Welch more than quintupled GE during his time. None of his successors could manage the company so what he built is slowly being dismantled. What I never understood is why they didn't just split the company in half which would have returned more value to the shareholders.
> None of his successors could manage the company so what he built is slowly being dismantled.
Or GE Financial was hiding a ton of bad debts while he was in charge.
The problem with performance reviews is that they are mostly subjective instead of mostly objective. I've yet to see a company specify a clear objective criteria for advancement.
I have the same problem with behavioral interviews.
"Tell me about a time when..."
"I want to see how you think."
"What your greatest..."
95% of my philosophy is don't be an asshole, work hard, know my stuff, and don't let the turkeys get me down. I spend no time dwelling on mistakes, as I internalize the lessons and throw out the reason I learned those lessons.
The reasons might come in handy later when you're trying to mentor younger colleagues and you're trying to explain why things are the way they are.
> Steve Ballmer revered Jack Welch's rank-and-yank management style.
So does Jeff Bezos. 10% forced "least effective" is still implemented here at Amazon and is truly destructive. The quota often gets passed down to small teams. The worst part is that performance evaluations have almost nothing to do with performance.
"Savvy managers would hire low-tier performers to protect the productive ones."
Juking the stats! I'm shocked there isn't a middle management bible dedicated to this.
Where is the hackers guide to middle management?
The article has a good summary of his legacy and his gracefulness:
Under Mr. Welch, GE became known for consistent profit performance and a surging stock price. Much of those gains came from GE Capital, the finance arm that ballooned under Mr. Welch and would almost destroy the company during the 2008 financial crisis.
GE’s profit has plunged in recent years, dragged down by hidden costs in the company’s Capital unit and losses in the core Power business. The troubles have prompted the company to break itself apart, overhaul its leadership and slash its once-generous dividend. GE’s share price tumbled roughly 75% in 2017 and 2018, erasing $200 billion of wealth for millions of investors.
In his later years, Mr. Welch witnessed the GE he built get dismantled. The decline of the company pained him, according to friends, and he sometimes said he gave himself an A for his execution of its operations, and an F for his choice of successor.
“he gave himself an A for his execution of its operations, and an F for his choice of successor.”
That alone disqualifies him as a leader “I did everything right but others screwed it up”.
And to be clear he was absolutely lying about that. Immelt was certainly a problematic leader, but a lot of the problems with GE happened under Welch. The biggest issue with GE was massive insurance liabilities for assisted living insurance which drastically exceeded anything GE predicted.
Well Welch started the insurance business in GE and took on a lot of these liabilities.
And while Immelt certainly had his problems, his mistakes were basically in the fact that he continued the Welch strategy rather than make new types of mistakes.
I remember people like Suze Orman were always handwringing since the 1990s about "Why doesn't the market take off in long-term care insurance?"
The obvious answer is that it doesn't work. One is that inevitably you get done in by cost disease, the other is that LTC insurance has a narrow market of people that can afford it but are not rich enough that they don't need it.
It is a deeper problem than that. Why buy insurance when you can create a trust to hide your assets and have the taxpayer pay? (Once you’re broke, you go on Medicaid)
There’s no nice nursing home or homecare. You just need enough money to get in, and the provider can’t kick you out. If you have a good support network, the only “enhanced” level of care is hiring people off the books with cash.
> And to be clear he was absolutely lying about that.
So his legacy is not only a management style that imploded and dismantled a collosal corporation but also him being the kind of person that throws people under the bus, including his closest associates and hand-picked successors.
Furthermore, people asked Jack Welch about the GE Capital spin-off and he said he agreed it was the right decision for the business. So I find it contradictory how Welch could feel bad while agreeing with major strategic decisions. Was it an execution problem? Because no amount of execution would have saved GE Capital given all the scathing criticisms I read. The entire financial sector became hazardous waste during the financial crisis, so unless GE Capital was as strong as a top tier Wall St bank it wasn't about to survive I'd imagine.
What story does the evidence tell you?
If you're going to disqualify someone as a leader, Jack Welch is not that guy.
He's the type of leader who grew the company on a minefield of figurative debt and real hidden costs. Leaving behind something with a solid foundation makes you a good leader. Getting out in time from a Ponzi scheme you built doesn't.
Another trait of a real leader is to be able to grow another leader who can do the same. By his own statements he failed.
And you don’t complain publicly about the people you hired. Especially while loudly proclaiming how good you are at hiring.
The quote does say "according to friends" - so maybe he only complained privately.
It doesn’t really matter. In his book he portrays himself as a great teacher and coach. So not his successor failed but Welch’s mentoring failed. He had all the tools available to bring up a successor but couldn’t do it. Reminds me a little of the US president. Take credit for everything positive that happens and when something goes wrong, point at somebody else and often at somebody he personally selected and hired.
The problem isn't his choice of audience, but his choice of message.
GE crashed nearly a decade after he left. He spent decades building GE into a powerhouse in many industries.
Finding a leader who can replace you is a miniscule piece of being a leader. Also, that's ultimately the Board's responsibility. The CEO reports to them.
Even a weak foundation takes time to crumble. Jack Welch built the foundation for GE's growth on the surface of a bubble that would burst in 2008. Perhaps the real mistake of his successor was not jumping off the pyramid soon enough.
https://www.nytimes.com/2017/06/15/business/ge-jack-welch-im...
> It goes like this: you can do the wrong things but be in a long enough feedback loop that the effects only really start to show themselves some time later. So rather than successfully correlating results to their real causes, what happens instead is:
> a) people fool themselves in the meantime that bad things aren't bad, and
> b) in the aftermath, when the consequences do start to appear, the temporal offset from the real root cause is so large, and they have so many other things to attribute failures to, that they can (and probably will) go the intellectually dishonest route
https://www.colbyrussell.com/2018/10/11/mozilla-and-feedback...
> Finding a leader who can replace you is a miniscule piece of being a leader.
Is this view based on the way Seneca Systems was terminated?
It tells me that he built a house of cards and left before the wind knocked it over
>Much of those gains came from GE Capital
>GE’s profit has plunged in recent years, dragged down by hidden costs in the company’s Capital unit
>he gave himself an A for his execution of its operations, and an F for his choice of successor
Am I reading it right that the reason GE Capital was so successful during his time was because there were hidden costs, making it appear more profitable than it was, that didn't come out until later? Or did this hidden costs actually not exist until choices that were made after he left?
Correct. GE recognized fees up front, and pushed costs to the future.
The Wall Street Journal published a massive article on GE's problems back in 2018.[0] Well worth your time, if you want to understand how big companies game their earnings.
https://www.wsj.com/articles/ge-powered-the-american-century...
Voodoo accounting 101, followed by every strike-price-chasing CEO to the detriment of everyone.
For anyone who can't break WSJ paywall
Yes. You are reading it right.
The best way to describe the management style of the 80's onward would be a financially engineered pump-and-dump characterized by putting workers through the meat grinder, and shirking any social responsibility that could be conceivably avoided by any means possible. Those are the basis of the hidden costs. Each person that got sacked took more institutional knowledge with them, and each responsibility shirked was just a matter of time before it came back around to bite the company on the balance sheets.
Once 2008 hit, seeing as most of the value the Capital part of the company had was found to be a house of cards, nearly taking the company out with it.
When the price of growth is to be an absolute bastard; one should wonder whether the price is too high. Note also that Reich's management style basically required the Reagan era deregulation to thrive. He was far more reserved when Unions actually had teeth.
Really a shining example of what not to emulate in my book. If you have to sacrifice long-term stability for short-term growth, you're misreading the landscape.
>If you have to sacrifice long-term stability for short-term growth, you're misreading the landscape
Or eyeing your bonus pot and the golf course / opera house.
Shareholders are holding for 3-6mths, executive incentive is aligned to those time spans.
Most shareholders are interested in holding for more than a year because they get 7-10% more money for free due to tax incentives.
But regardless there are many kinds of investors. The bottom feeders interested in 3-6month time spans are just one of them.
This is so for retail investors. I do not think it is so for funds.
> Am I reading it right
Yes.
Previously discussed here on HN: https://news.ycombinator.com/item?id=20753510
> he sometimes said he gave himself an A for his execution of its operations, and an F for his choice of successor.
As Michael Scott would say "My biggest flaw is working too hard"
Jack is upset that his successor did not turn out to be person of questionable moral values and shady accounting genius.
> Much of those gains came from GE Capital
Worth noting: The only reason GE did not go bankrupt in 2008 was because the government bailed out GE Capital. It's doubtful that GE Capital's risks were being properly accounted for when Jack was in charge, and it was a large fraction of Jack's balance sheet.
I've always subscribed to the theory that the true measure of a leader is what happens after they are gone.
Jack Welch, head of GE Plastics that polluted Pittsfield MA and the Connecticut River, acceeded to the throne of once-solid General Electric. Through his gentle ministrations he turned the company into a graveyard, driving Schenectady, NY from a middle class heaven into a rust-encrusted hellhole. Jack's financial acumen provided for monotonically increasing stock prices through his tenure. He did this through financial manipulation that would have landed lesser mortals in jail for securities fraud. Upon the sale of the General Electric Reinsurance (GE Re) to Swiss Re, Jack's fraud was uncovered to the tune of $19.2BB. This, however, didn't affect St. Jack, who had moved on and left Jeff Immelt to hold the bag. In the financial crisis of 2008, GE Capital's "investments" into derivatives imploded and GE was within one day of failing to meet payroll and default on many obligations. Jack's good friend, Warren Buffet, however, came along with $5BB in cash and saved the company for a slight premium.
Jack was known as a sharp negotiator and a master of project management and contracts. His marriage failed one month after his wife of many years became "vested" in the pre-nuptial agreement. Suzie Welch was unavailable for comment at the time of publication. Welch demanded full commitment and high levels of performance from his employees. He trained all in the religion of Six Sigma, all the better to remove "waste" and "unnecessary costs" from GE products. He also trained all managers in "ethics" as a means for them to know and understand the limits of ethical behaviour, to know where the gray zone was in relation to those limits, and then to be able to "cluelessly" operate beyond the gray zone limits.
He is survived by countless GE customers who cheer the ongoing demise of the company, by arrogant former employees and managers who remain unemployed due to their catchphrase "this is how we did it at GE", and by many retirees doomed to eat catfood since their no-decision investment in GE stock has left them in penury.
I grew up in Schenectady (after the glory days of GE) and it's crazy how much GE destroyed the town. Still has yet to really recover. Oh, and now they put a casino in.
Welch was destructive for GE and the cult of his approach has been destructive for the industrial sector.
He turned around GE for the short term, but undermined the fundamental model of a conglomerate (there are good arguments for and against conglomerates, but GE was an is one). The metrics used were ultimately all short term ones and allowed the business to become lopsided, a disaster from which it has still not recovered.
The analogy of "cutting the fat" (nicely timed for the era of the Jane Fonda workout)* was stupid. Actual healthy humans have body fat in the teens, with a few elite athletes (who do nothing but train) at the very low end. Instead the mantra was to consider anything not immediately useful -- drive the "body fat" to 0%.
It's like a community madness, and it spread to corporate America and to some extent governments as well which has resulted in the current parlous state of the economy: a Potemkin economy that looks great only because the metrics used all face the "painted side".
Good riddance to this blood sucker.
* no insult intended for the Jane Fonda Workout
> Good riddance to this blood sucker.
Really? You don't agree with his corporate style / strategy / books and that justifies saying something like that?
I could not care less that he destroyed GE and became rich in the process. That's a GE shareholder problem. But I had hoped my message was about more than corporate "style".
First: he's been fundamentally destructive to the global economy, which has had a particularly brutal effect on, IMHO, the majority of people who live in countries that were industrial economies in the 1980s. The hollowing out of the middle class and precarious economic position of younger GenXers and millennials can be laid in a large part at the unthinking adoption of the bullshit he promoted and demonstrated. (note that I am at the beginning of GenX and my child as younger than a millennial so I am not bitter from some personal hurt here).
(BTW although GE outsourced during this period, so did many companies, and I do not lay that at his feet. And the result of outsourcing is much more of a mixed bag than it is often described, and in the balance is likely even positive, though the way it was implemented in the US was a combination of this "strip to the bone" which yes has been destructive.)
Second: true, he's dead and that's a tragedy to his family and close friends which I don't downplay. But also he was an asset stripping parasite whose model has ultimately been destructive and he was a lauded champion of such behavior. His death is an opportunity for people to reflect on his immoral behavior the consequences of which we are still suffering from.
I like the analogy, "Want to lose weight fast? Cut off a leg!" strategy.
My impression is that he was no management genius but rather fortunate in the timing of moving his company into the FIRE sector. All of that goodwill evaporated in the 09 crisis.
Can someone speak to his lasting major contributions? I guess he also deserves the credit/blame for the ubiquity of Six Sigma.
The first paragraph is basically how I'll always remember him. Stack ranking is a farce. He was incredibly fortunate, but insisted it was his ideas instead. It's the equivalent to a vice heavy person winning the lottery, then writing a book claiming that if you want to be rich, you need to smoke and drink daily, and the proof is that I'm rich.
The post hoc fallacy rears its head everywhere, if you look closely enough.
Neutron Jack.
We can all thank him for pioneering stack ranking and Vitality curve performance management that called for firing of bottom 10 percent each year.
A Japanese head of company once said, "there's no point firing bottom 20 percent because given time, there will be new bottom 20 percent formed to take its place.
Is that an accurate quote? It would seem to make more sense if the first gerund was "firing" rather than the current "hiring"
Very, very few companies really want to hire the bottom 20% anyway.
oops, typo. Yes I meant 'firing', not 'hiring'. Fixed.
He was supposed to have created this company that cranks out highly capable managers in all eternity but somehow it didn’t work out. I read his book and already got a bad feeling about him. And from his latest TV interviews I got the impression that he was just a selfish prick that had learned nothing and gained zero wisdom in old age.
Obvious he was a very powerful and capable man but he used his powers only for his own gain and overall made a negative contribution.
I once described the worst member of senior leadership I've had to deal with at a company as having no tricks other than cosplaying as Jack Welch. Like he instituted stack ranking at a 50 engineer company because he was old money, and it never occurred to him to interact with "the help" enough to know the engineers under him.
He's one of two people in the management chain I've met in my career that they working at a company (not even in my management chain, but there at all) is mutually exclusive with me working there.
> Can someone speak to his lasting major contributions?
Inflicting "stack ranking" upon the world, for one.
Not all contributions are positive.
In my humble opinion stack ranking was meant to create a clear process by which to measure people relative to their roles and each other. (I'm not defending the practice, just stating purpose.) Instead it created selective pressure that measured how well you could game the process to appear successful and push down the ranking of everyone else for yourself and your employees.
During the stack ranking heyday there was a manager who spent his year compiling a list of mistakes by other teams. When it came to year end reviews anyone asking about the ranking of this manager's people ended up deflected with questions about their own team members. People learned to just leave this manager's rankings alone and work around him. He was wildly successful, getting promoted early and often before leaving the company to go start a recruiting firm which allegedly applies some sort of AI principles to picking good candidates.
Yes, the purpose was to measure the unmeasurable, which, since it's impossible by definition, created the secondary effects you describe.
For details on the daily workings of stack ranking at Microsoft, the venerated Mini Microsoft is still up and available in all it's 15 year old glory. It's one of the true documents of contemporary tech work, and I'm glad it isn't just buried in archive.org (long live archive.org).
Go back to the first couple years and you'll be soaking in it.
This. And if you pull if forward, stack ranking did a lot of damage to both GE and Microsoft after Ballmer implemented it.
The real failure of stack ranking is it never ends, so at some point you are firing good employees.
Also the list of "good" employees is not consistent year to year. Even if you don't fire people most will have better and worse years. Sometimes the swings can be dramatic when people find their groove or conversely when they face burnout or have personal problems.
Stack ranking is stupid, heartless and unscientific. Just like the man who invented it.
It in fact gets worse. During stack ranking's tenure at Microsoft, they would often pull the "best and brightest" in the entire company into teams to accomplish certain goals. The theoretical "best and brightest" were then stack-ranked against each other. Every manager had to pick the "worst" person to eventually get canned.
Not just that, but good employees get tired of dealing with the stress and sabotage from coworkers trying to stay ahead of the layoffs. In my experience, it speeds up the burnout process.
> Can someone speak to his lasting major contributions?
The ideas of outsourcing your core businesses, of fire-selling everything you couldn't exploit (any business GE was not #1 or #2, regardless how profitable), and top to bottom accounting fraud.
I think he wrote the book all our dads said we were supposed to read.
Jack gave himself an endowed chair at the "Jack Welsh school of management", one more sign that people like that have no idea what legitimacy looks like since 2000 or so.
I think they pushed outsourcing hard under his reign. They were one of the companies responsible for destroying a lot of IT jobs in the US as a result. Not a good guy at all.
Every other F100 was outsourcing IT like crazy in the mid-2000s because of that Harvard Business Review article that talked about outsourcing everything non-essential to your primary business. Meanwhile, Werner Vogels (Amazon CTO) thought that was a stupid idea because every business was being transformed by its IT and that it's a revenue multiplier, not a cost center (something that every other decent person in the rank and file of IT has believed since... ever). The whole "digital transformation" boom that swept the F100 in the past 10 years is essentially back-tracking on all these divestures and off-shoring efforts.
I recently got a subscription to the HBR and am surprised at how...misguided it is. It's shocking how this locus of low competency is destroying American business. Ditto on the outsourcing, too - left a job at a blue-chip American company because its culture had been internally rotted by outsourcing. (Of course, they were hilariously struggling to keep and retain the talent necessary to stay ahead of the tech curve, now institutionally recognizing they've made a massive mistake. Most good engineers had a tenure of 6 months.)
Pardon my ignorance on the topic, but why would moving a business into new areas be considered lucky?
I wouldn't consider Apple moving into phones as lucky. Would you?
It's just not what he pushes as the primary reason for his success.
They also were sitting on a ton of real estate (and invested capital from their pension fund), so the comparison with Apple isn't totally on point. Apple didn't get into the market because they already had a warehouse filled with phones.
If you saw Apple moving into phones and then moved your business into phones and your business did well, a person like Welch would call himself lucky.
He will be remembered as one of the greatest banksters of all time. He converted Thomas Edison's company of genius inventors into a factory of paper-pushing lending trolls.
Basically a very successful management crank.
The tragedy wasn't Jack Welch, the tragedy was a financial and economic system that actively rewarded his bizarre beliefs and actions.
My father worked his way up from the foundry to "Business Leader" (management) at GE, starting in the mid 1970s.
GE was a mess internally, all the way down to the shop floor, before Welch took over. His impact cannot be understated.
We were big Jack Welch fans - if he hadn't grown GE the way he did, my hometown - where it was the largest employer for decades - would have been a lot poorer.
So I've read the big GE management book written by the folks at Crotonville, and concluded that Welch did a lot right, like moving responsibility within the company to the level where the knowledge is, and shedding units that were fundamentally unprofitable. I think you're right that as manufacturing shifted toward globalized supply chains that a certain amount of pain was inevitable and necessary.
However, it seems like a lot of his financial results came from "shaping" the quarterly earnings and various unsustainable practices. And for whatever reason his the culture he brought to the company has left his successors overseeing a company that has performed as one of the worst in the whole S&P over the last 15 years. Even if you take a pure industrial company like US Steel, which I don't think anyone would point to as being on the vanguard of management or product, GE is not doing all that well. I dunno. My pet theory is that "leaning" an organization is really a one-time thing, and that it's very challenging to do so without also removing the "seed corn" of research and even development of the next big thing. Though, to be fair, Edison himself had a wildly inconsistent financial record.
Would you mind expanding what you think he did right? I'm curious to have a counterpoint to the other top comments, which are pretty negative.
In some fields, acclaimed works seem cliched and obvious from where we are today, because the innovations that brought their acclaim have been so universally adopted.
I'm not a historian of management theory so I don't know if the ideas are original, or even of how well Welch followed his own advice, but plenty of the things in his books are straight-talking common sense:
* You should know your business well enough you don't need management consultants to tell you what to do
* HR and hiring are important and should be represented in your senior team accordingly
* If you want candour (which you do) you need to reward and praise it, not punish it
* When there's a crisis, don't deny there's a problem
He's not the first person to come up with every idea in his books, but even 40 years later there are companies that need to learn these things.
If you're trying to turn around a mis-managed company, a few rounds of identifying and eliminating people in the manager ranks that aren't pulling their weight could have a huge positive impact. So I could see that "neutron" Jack's stack ranking could have been great, had it been limited. But when you're consumed with your own genius, you tend to think that the thing that seemed to work, and everyone praised you for yesterday will keep working tomorrow.
I had the amazing opportunity to sit through a training where Jack Welch came to our company and taught a dozen of us his simple time management system. This was back in 1996 and I’ve been using some of the idea’s he gave us ever since. His philosophy about focusing on creating leaders seemed solid. His philosophy on rank-and-yank cost him a lot of fans.
any link to or summary of his ideas?
This is the guy we have to thank for for introducing stack ranking and other predatory employment practices.
In my culture we're taught to never speak badly of the deceased so I'll say nothing about Jack Welch.
In upstate New York he held back for over a decade any effort to mitigate legacy PCB pollution from GE’s mostly closed factories there. He funded AstroTurf organizations and downplayed research showing connections between PCB pollution and health problems.
3M management is doing that here in MN where they're responsible PFAS and the like for leaking into groundwater and exposing workers.
3M also have been trying to cover up their responsibility for these health-damaging outcomes for decades.
https://theintercept.com/2018/07/31/3m-pfas-minnesota-pfoa-p...
For claims like that it helps to link to a source for the data. Making inflammatory statements without backing evidence makes for poor discourse IMO. I found this article that seems to cover the topic: https://www.timesunion.com/local/article/Dredging-up-the-tru...
he sounds like a really standup kinda guy
"'Neutron' Jack Welch, who led GE's rapid expansion, dies at 84" (Reuters)
...Welch - known as “Neutron Jack” for cutting thousands of jobs - bought and sold scores of businesses, expanding the industrial giant into financial services and consulting. Under him, GE’s market value grew from $12 billion to $410 billion, making Welch one of the most iconic chief executives of his era.
But his push to build out the GE Capital financing business nearly proved the undoing of the entire enterprise during the global financial crisis more than a decade ago, and GE now trades at a fraction of its peak value....
https://www.reuters.com/article/us-people-jackwelch/neutron-...
Given that every single comment I've seen so far is a joke or a negative, it's worth offering a more respectful perspective of his accomplishments and story from Wikipedia [1]:
Jack Welch was the child of a railroad conductor, born and raised outside Boston. He worked as a golf caddie, newspaper delivery boy, shoe salesman, and drill press operator, throughout middle school and high school.
Welch joined GE in 1960 as a junior engineer after his PhD in Chemical Engineering. He was frustrated with the bureaucracy, and planned on leaving, but decided to stay after an executive insisted he'd work on creating a small-company atmosphere.
In 1981 at the age of 45, he became the youngest-ever chairman & CEO of General Electric. He dismantled many layers of management, finally fulfilling his wish that nearly led to him leaving GE to begin with.
In his 20 years as CEO, he grew the company from $12 billion to $410 billion in market cap. Fortune magazine named him "Manager of the Century."
He fiercely believed in free markets. Even despite the comments in this thread on his anti-Climate Change perspective, he believed that "every business must embrace green products and green ways of doing business", as that's what the people, and thus the markets, wanted.
Another interesting note: "Regarding shareholder value, Welch said in a Financial Times interview on the global financial crisis of 2008–2009, "On the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy...your main constituencies are your employees, your customers and your products".
They always make you sound nice in the obituary.
"Sure, there are only saints in the graveyard"
What a nice, capable man he was:
THE death of Stalin, like the death of Lenin 29 years ago, marks an epoch in Russian history. Rarely have two successive rulers of a great country responded so absolutely to its changing needs and piloted it so successfully through periods of crisis. Lenin was at the helm through five years of revolution, civil war, and precarious recovery. Stalin, coming to power in the aftermath of revolution, took up the task of organizing and disciplining the revolutionary state, and putting into execution the revolutionary programmes of planned industry and collectivized agriculture. He thus equipped the country to meet the gravest external peril which had threatened it since Napoleon, and brought it triumphantly through a four years’ ordeal of invasion and devastation.
That's from the Times obituary.
That is almost ... impressive. And scary. I am tempted to say that it would be more civil to write badly about dead people after all, cause the above civil framing basically glorifies mass murder.
Here's a reprint of an old WSJ article from the "Neutron Jack" era:
> EVERYONE FIRED
> Wall Street Reacts Favorably
http://www.angelfire.com/hi3/ideology/fired.html
Michael Moore used it as the introduction to his '90s-era book "Downsize This!".
Welch is quoted in the article:
> Jack Welch, chairman of General Electric, had more concrete advice for the downsized workers.
> "We've got 40 openings at our Tijuana facility right now," beamed a jubilant Welch. "I'd be more than happy to accept applications from any of our US workers who would like to relocate there. Just give our personnel department a call - and it will definitely help if you can speak Spanish!"
I was posting because I remembered reading it decades ago and seemed factual, but after re-reading it in detail this article is obviously fictionalized and satirical, and isn't a literal WSJ article.
My only memory of Jack Welch was a PBS interview I caught a slice of where he was asked what his number one piece of advice for management was. He said that a CEO's job was to create and promote culture.
I can see a lot of negativity for the man in the comments here but I agree with him on the culture issue. I can understand the negative feeling people get with some of Welch's personal cultural choices. However, it does seem he was successful at articulating a culture and bringing in a team that believed in that culture.
I think it is wise to try to learn from people even when you dislike them, maybe especially when you dislike them. Even if you don't like what he did, you can change your view to respect how he did it.
It's not so much that we don't want to learn from someone we dislike. It's that we don't want to scour the haystack of awful traits to find a needle we can compliment.
Jack Welch is indirectly the reason I got fired at Oracle, because some group of bean counters thought it is smart to fire people regularly based on some subjective measurement.
However I am very sad he died because I subsequently got a raise and met my wife at my next company.
It sounds like it was a good thing you got fired from Oracle. You got a raise in your next job (so Oracle was underpaying you), and you got away from a crappy company. Your only mistake, in hindsight, might be that you didn't leave Oracle sooner.
I stuck around at one company for way too long too, earlier in my career. I finally got pushed out because of a bunch of layoffs. I got a huge raise at my next company, plus a more interesting job too, and better coworkers. I should have looked around earlier, but I was comfortable at that job and afraid of leaving. (That next job ended up not lasting too, again due to mismanagement resulting in laying off my whole team, but the job after also came with another big raise...)
I think the moral here is to not ever get too comfortable at any one job, and don't take things personally if you get laid off: the company is probably being stupid and losing a great asset.
See? Creative Destruction is real!
All of these replies are making me laugh, because there is some truth to all of them :)
List of ideas:
1) Oracle fired me to save money, or something? But then replaced me with x number of fresh grad employees who have to be onboarded to my level of productivity?
2) My salary went up and I am much more productive at my new company, which is also a big corp... so theoretically I am more "efficiently allocated" and literally everything was a win/win?
3) But also like others said, it could all be luck and randomness and there are others who get very depressed and/or can't find any work at all?
It's very tough to say, there's no way to predict the future, so it's wise not to attach lots of meaning to anecdotes :)
There is something to be said about your comment: this illustrates the value of free markets and the efficient allocation of resources; you were allocated more efficiently and you made more money and got your wife.
Really? My sense is that he is sardonically looking back at a shitty situation, not of his own making, that happened to work out for the better, and despite this would not wish it upon anyone, rather than endorsing it as being part of some larger 1980s laissez-faire bullshit ideology.
Purely luck though he could’ve also alternatively remained jobless with a bout of depression and became homeless after spiraling into ruin.
I wouldn't call it luck; it really depends on a lot of factors. If he's a software dev like most people here, then he's in an industry where there's a high demand for his talents, so it's generally not that hard to find a new job. Unfortunately, this is of course not the case for all workers; laid-off coal miners for instance will have a much harder time.
Can confirm I am a software developer and it was relatively easy to find "just any" gig, but I am not working for Google or anything like that :)
The best part of survivorship bias is when you are a survivor.
https://www.perdoo.com/resources/stack-ranking/
> Stack ranking is harmful because it creates an environment which encourages unproductive behavior. Instead of teamwork, it tacitly rewards backstabbing. The fear of losing one’s job makes people unlikely to speak their mind, leading to a closed environment, in which innovation suffers. Finally, it leads to the emergence of “brilliant jerks,” who don’t recognize or care that running a successful business is more than just hitting quarterly targets.
I read about Welch back in the days when some of my management friends admired his magic to bring GE to the status before he left.
I'm also reading some books and articles about the root of modern US corporate management, which went back to the second World War and the 10 Whiz Kids. Very fascinating reads.
However after the '08 financial crisis a lot of people took a different, more critique view and I think we have a lot to learn from those guys, positive and negative.
This thread is relevant.
Like many leaders, Jack made a lot of good decisions but the lure of quick profits playing financial games has taken more than one long lived company down.
I worked for Westinghouse starting in 1986. Westinghouse went through the same issues investing in real estate loans in the 90s and did not survive.
I remember my manager telling me in the late 80s that the Financial Services division was making more money than the rest of the company combined. This did not make a lot of sense.
It ended up taking the entire company down a few years later.
Someone call Jack Donaghy
I think his contributions are valuable but his ideas have been over-implemented -- it's time the swing the pendulum swings back.
From wikipedia [1]:
>> He stated that global warming is "the attack on capitalism that socialism couldn't bring", and that it is a form of "mass neurosis". Yet, he said that every business must embrace green products and green ways of doing business, "whether you believe in global warming or not...because the world wants these products".
From [2]:
>> A vitality curve is a performance management practice that calls for individuals to be ranked or rated against their coworkers ... Pioneered by GE's Jack Welch in the 1980s, it has long been a controversial practice due to its negative effects on employee morale and potential for bias and discrimination. Many companies have abandoned the system in recent years
All said and done, RIP.
[1] https://en.wikipedia.org/wiki/Jack_Welch#Personal_opinions
[2] https://en.wikipedia.org/wiki/Vitality_curve
edit: added [2] link
I have never liked or understood the popularity (at least for a time) of the 'vitality curve'.
Indeed, if you think that 10% of your employees must be fired every year then, to me, it is a sign that something is horribly wrong and you should really focus on that, not to mention the horrible effect this practice has on company culture and atmosphere.
I think the core idea makes sense, at least intuitively. Remove the worst performers. Make room for better people.
The issue is that you will always have "worst performers". There needs to be a minimally acceptable performance level. And you also need enough slack so that the churn isn't affecting overall performance.
And the constant fear of being in the bottom 10% doesn't create destructive behaviours like credit stealing, passing on failures dressed up as successes, and actively sabotaging competing projects or people.
ie you risk ending up with an internal hunger games when in reality you should all be working together against the external opposition.
If you want to get rid of the 'dead wood' then there are much better ways that don't create such negative effects on both the company and the people.
A smarter way to do this, is to have a probationary period on initial recruitment to check either of you haven't made a mistake, and the occasional reorg to which gives the opportunity for managers to remove consistently poor performers over a longer time period - ideally into a better suited role in the same org.
Finally, if his method worked, you'd expect the distribution of performance to narrow over time to the point where you reach steady state where who is in the bottom 10% is essentially random noise on a tight distribution.
Assuming he wasn't that dim, then he could of only intentionally created it to create a climate of fear because he believed that was the best way to motivate people.
It's certainly the easiest.
Removing the worst performers is the issue, as you somewhat suggest.
You don't want to remove the worst performers. You want to remove those don't do their jobs or don't fit in the company. This is very different.
It is, but I was offering a suggestion as to why the concept is popular.
It passes the "gut check". It "feels right".
And that's because it's vaguely in the right direction of a good idea.
what exactly did he die of? It’s so amazing the super rich really don’t have access to any extra health care than regular middle class.
Please no black bar for Neutron Jack.
>Under his leadership it became the largest company in America, switching from manufacturing toasters and television sets to fostering faster-growing businesses such as the NBC media business and the in-house financial arm, GE Capital.
Yeah, levering up, firing people, deindustrialization and financialization about sums up the dude's career. "Business guru decides burning the furniture more efficient than heating with coal."
Technically he's not dead, he's just been downsized to increase shareholder value.
Public figures are still human, with families...
This is a popular excuse when horrible people are called out for what they are. "Won't someone please think of the children".
Well, it's they themselves that should have thought of their families. It's not our fault when we say exactly what they were.
Calling out, in my book, requires an intelligent, thoughtful treatment of the behavior and subject.
GP took a cheap quip at a dead man, for laughs and karma.
And just because he was (by all accounts) an asshole, that flies? And doesn't just fly, but inspires righteous indignation that anyone would feel it's disrespectful?
Be the change you want in the world.
I'll grant you the families part.
Yeah, I have a hard time dancing on a persons grave. Unless they've done something totally evil, they should be afforded some respect. That said, hearing about Limbaugh's condition tested my ability to live by that principle.
> Unless they've done something totally evil
Well, according to a comment upthread:
> In upstate New York he held back for over a decade any effort to mitigate legacy PCB pollution from GE’s mostly closed factories there. He funded AstroTurf organizations and downplayed research showing connections between PCB pollution and health problems.
Yeah. That qualifies as evil in my book.
A la David Cameron feeling merely "privileged pain" upon the death of his son
If you want nice things to be said when you pass then do good things for people in your life.
It’s important to be kind to all, but it’s also important to give people space to grieve.
This is exactly GP's point.
So what?
Wow Fidel Castro didn't even get this bad of a response:
https://news.ycombinator.com/item?id=13041886
I guess as long as you're a Republican you're free game, even in death.
To be fair, most commenters on Hacker News are more likely to have suffered the detrimental effects of Jack Welch's acts and philosophy than the effects of Fidel Castro's rule. Not every moral judgment needs to be made on pure global utilitarian principles
Wow. Reading just the top comment there and then the responses in this thread is pretty eye opening.
But then again - "I think what religion and politics have in common is that they become part of people's identity, and people can never have a fruitful argument about something that's part of their identity. By definition they're partisan."
Plenty of heartless comments in this thread. It's a shame really. Rest In Peace, Jack.
I don't have a strong opinion on Welch, but a) he fired lots of people from GE, and b) introduced stack ranking to the world, which got lots more people fired. Whether or not he was good for GE, he was a heartless man. Of course he gets a heartless response.
It may be expected, but just remember that we all have power to break negative cycles.
Yeah bullshit. Look at the reception Fidel Castro got: https://news.ycombinator.com/item?id=13041886
Anyone conservative you people dance on their grave.
Anyone socialist, including brutal dictators, you praise them.
It's as simple as that. I can find you many examples of this. Common theme between them all is their political ideology.
"I don't want to be fired for a stupid reason" is a political ideology? Firing people for stupid reasons is a core conservative value?
It's debatable whether they were stupid reasons, that's your opinion.
But yes, it's called Right to work.
> A Right To Work law guarantees that no person can be compelled, as a condition of employment, to join or not to join, nor to pay dues to a labor union.
This results in less powers to unions, which means employers have more freedom of discretion to fire employers, but also means employees are not forced into massive corrupt labor unions that halt efficiency.
Right to work states are mostly red states.
>but also means employees are not forced into massive corrupt labor unions that halt efficiency.
The funny thing is that labor unions in Germany work great, and that country leads the world in exports. Labor unions in the US, however, seem to frequently become corrupt. The problem isn't unions.
What does that have to do with anything we're discussing? I was talking about stack ranking, which has zero to do with unions.
I was answering your questions.
Yes, the freedom to fire workers for what others might consider "stupid reasons" is a core conservative value, stack ranking included.
Tighten your speech if you want specific responses.
What I don't seem to get is how a business tactic is worse than mass-murdering 10,000+ people. Hacker News has a strange moral compass.
Yup, there is a lot of toxic group think and western idealism on HN and they oppress anyone who points it out. I remember I commented on the same thread on Castro.
https://news.ycombinator.com/item?id=13042003
Somehow over the years, HN has become an echo chamber of very specific ideals and non-tolerant of anything else.
I think I misunderstand, you seem to be very pro-Castro in that thread.
> 10k over 50 years? Wow, that's a lot less than I imagined from how he is described as a mindless killer, and the dictatorship as drenched in blood.
Wow, the responses there.
HN needs a obituaries section. Seriously. Until then, stop upvoting these constant "... has died" links!
It's morbid and unenlightening. There is a large demographic that is reaching mortality age. HN is going to be filled with nothing but daily "has died" items for the next several years.