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

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

No doubt for reasons of convenience, most (if not all) of the most important information about GE is summarized within a series of acronyms. For example, with regard to GE's "4 E's (+P) of Leadership," Jack Welch explained that the four Es represent positive Energy, the ability to Energize others, having an Edge (i.e. the courage to make tough yes-or-no decisions) and Execution (the ability to get the job done). What about P? "Passion!"The subtitle to William E. Rothschild'sbrilliant book refers to another acronym, LATIN, that reveals "the secret to GE's success": Leadership as well as Adaptability, Talent, Influence, and Networks. As Rothschild explains, his material covers GE's successes and failures since 1892 when it was established in New York, the result of a merger of of the Thomson-Houston Company and the Edison General Electric Comany. Charkes Coffin was GE's first president and Edison, who left the company two years later, initially served as a director. Rothschild describes the five success factors in each stage and provides "an objective assessment of what was done in each realm - both positive and negative."The material is carefully organized within four sections, each of which covers a specific period throughout GE's history:Part I "Living Better Electrically": 1879-1939 (Chapters 1-4)Part II "Diversification and Decentralization": 1940-1970 (Chapters 5-9)Part III "Portfolio Leadership": 1971-2001 (Chapters 10-13)Part IV: "Back to the Future": 2001-Present (Chapters 14-16)When reading Rothschild's book, it soon becomes obvious that those who led GE determined its priorities and objectives in each of the stages of its development. For example, Edison's focus was on identifying real problems, finding solutions and commercial applications for them, insisting that everything be patented and copyrighted; Coffin and Edwin Rice (1892-1921) ensured the success of the merger with a commitment to participative and consultative leadership, and willingly shared authority with associates; Gerard Swope and then Owen Young (1922-1939) took that commitment "to a higher level by creating ways for managers and employees to contribute to the company's strategies and policies; Charles Wilson and Philip Reed (1940-1950) were transitional leaders and Wilson "understood the old GE perfectly" but lacked the experience and the temperament to lead "the significantly charged company" after World War Two and voluntarily stepped won; Ralph Cordiner and Reed (1950-1963) spearheaded GE's decentralized growth with "a new and relatively unproven way," management by objectives (MBO); Fred Borch (1963-1972) continued decentralized management and, when realizing that he hadattempted to do too much ("GE can do anything it wants to."), "instituted a radical change in GE, enabling it for the first time to exit or prune products or even entire businesses"; lacking a co-leader following the premature death of his mentor, "Flip" Philippe, Reginald Jones(1972-1981) created a new "chairman's office," assumed the titles of chairman and CEO, and surrounded himself with those who had diverse personalities andf leadership styles; Jack Welch (1981-2001) accepted Jones's suggestion that he "blow up GE" (i.e. eliminate everyone and everything that did not add substantial value to the company) and did so - in Rothschild's words -- as a "contentious, demanding, celebrity CEO, a surgeon leader," [who was his]own inteligence network"; and finally, Jeff Immelt (2001-Present) who is more diplomatic "but still tough" and considers people selection and their development especially high priorities as he leads GE through what continues to be a troubled global economy. By the way, those who have a special interest in GE's current CEO are urged to check out David Magee's recently published book, Jeff Immelt asnf the New GE Way.Rothschild devotes equal attention to each of the other four success factors (i.e. Adaptability, Talent, Influence, and Networks) during each of the four eras. Readers will also appreciate his skillful use of various devices that cluster key points. Briefly annotated checklists, for example, such as these: Common characteristics of all GE training programs (Pages 32 and 112), special benefits offered to electric utilities companies to ensure their growth and profitability (Page 92), GE's four-step process to recognize business opportunities (Pages 176-177), the steps Welch took to implement Six Sigma at GE (Page 214), how various CEOs successfully completed major change initiatives (Page 265), and finally, "some GE surprises and what the company did in response" (Pages 269-270). Other reader-friendly devices include boxed "Exhibits" that also cluster key points such as those that summarize the five ingreients for success for each of the four eras: "Living Better Electrically" (Edison through Swope and Young), Diversification and Decentralization (Wilson...Borch), Portfolio Leadership (Borch...Welch), and "Back to the Future" Strategy (Immelt). Rothschild also provides a "Highlights" section to introduce each of the four Parts and a "Takeaways" section at the conclusion of most chapters.When concluding his book, William Rothschild acknowledges, "The GE Way doesn't always work consistently at GE; it can't possibly work for any other comany that attempts to embrace it indiscriminantly." Rather, he urges those in other companies to "adapt, rather than adopt, the GE approach" that he so brilliantly examines in this book.

I first thought about GE and its management practices in 1973 when a prospective client asked me for help in implementing a detailed strategic planning process and handed me a one-page version of the process (you can see a disguised version of that process on page 161 of this book). The initials in the corner were W. E. Rothschild, author of The Secret to GE's Success. Naturally, when I saw this book, I couldn't wait to see what this strategic planner extraordinaire had to say.Most people see GE in terms of the Welch era. Why? Because that's when GE got the most press coverage. Also, the Immelt era's heritage isn't clear yet. It hasn't been long enough. Prior to that, few remember that Reg Jones was once considered a legendary CEO. Further back, only GE alumni can mention many names after Thomas Edison.I found this book to be a helpful history of GE's continuing success, tying together many themes that I had missed. In addition, it was interesting to see how many GE "innovations" were really simplifications of earlier work . . . or continuations of long-held concentrations of focus.Unlike many books that seek to pursue too many themes, Mr. Rothschild conveniently selected only five to illuminate and explore:1. Choosing leaders well and pursuing an inclusive leadership style.2. Finding effective ways to adapt to new conditions, success, and setbacks.3. Identifying, nurturing, and encouraging excellent people.4. Being prudently proactive in engaging stakeholders.5. Creating connections to others that allow everyone to accomplish more.Although Mr. Rothschild is appropriately proud of the company's success, he doesn't shrink from pointing out missteps, areas where processes need to be adjusted, and unnecessary delays in taking needed actions. He also wisely suggests that other companies not copy these practices, but rather adapt the practices to their own circumstances. In some conceptual exhibits, he provides helpful clues for how such adaptation might be done (see especially pages 59, 181, 208, 209, and 255).Ultimately, of course, the limitation of a management book based on one company is that you don't see the lessons as clearly as you would if you had more comparisons. That's the strength of Built to Last, for example. As a result, I think most people will get more out of this book if they read Built to Last first.The only point that I hear many management observers make about GE that Mr. Rothschild doesn't make is how slow GE usually is to adopt helpful, new practices that originated in other companies. You only see hints of that problem in the long delays involved in correcting some of the missteps. The press coverage of the company stresses the opposite point: Everything was invented by GE. But that's not really the case.Good work, Mr. Rothschild.