SEPTEMBER 2023

- The Rise & Fall of General Electric -

By Rev Protodeacon George A. Haloulakos

Few companies in history have exemplified excellence at a consistently (and often spectacularly) high level in manufacturing, marketing, innovation and ingenuity than the General Electric Company (GE).  GE is a company that is woven into the tapestry of American history because of its development and mass production of inventions such as the light bulb and jet engines that have become commonplace if not taken for granted.  Its inextricable connection with the American lifestyle was expressed in the longtime Disneyland attraction "The Carousel of Progress" (sponsored by GE) which chronicled the advancements throughout the 20th century that GE was able to bring to everyday life at attractive price/value points thereby creating mass markets for consumer & industrial products on a global scale.  Moreover, its operational excellence translated into financial results that made the GE stock one of the very best performing investments for both individual and institutional investors over the same period.  This became firmly ingrained into American consciousness in the 1950s as Bing Crosby would regularly read excerpts to his listening audience from GE's latest financial reports on his nationwide radio show during commercial breaks.  Mr. Crosby extolled the virtues of GE both for its excellent products and its investment merits in a manner that made it understandable to people from all walks of life.  Concurrently, the corporate spokesperson for GE during the 1950s and 1960s -- who travelled the nation to all of General Electric's facilities and was a fellow actor to Mr. Crosby -- was a future US President in training!  Any idea of who I am referring to?

With the passage of time, GE became the most admired and valuable publicly traded company -- creating a reputation for leadership and financial success that helped shape business education and management practices worldwide.  In sum, GE was the ultimate business conglomerate.  Yet as of this writing, GE is currently in the process of splitting up into three separate companies -- focusing on aviation, healthcare and energy.  This three way split comes on the heels of a major downward spiral whose origin can be traced to when GE was at the height of its prestige and influence in pioneering the doctrine of shareholder value.  William Cohan, a renowned financial journalist has written a most insightful and important book titled Power Failure: The Rise and Fall of an American Icon in which he deconstructs the 130-year of the company whose slogan was "to bring good things to life."  As every American household in one way or another featured or incorporated GE products, such a claim was not so far-fetched.  Yet Mr. Cohan demonstrates that the root cause of failure can often be traced to the very qualities and characteristics that created a foundation of success.  Blind spots, hubris and avoidable mistakes are a treacherous, deadly combination for one and all.

There is a voluminous amount of content in Power Failure that makes it a compelling read for both a general audience as well as those versed in various disciplines of business administration.  To paraphrase what I learned a long time ago from my father, the greatest or most successful companies as well as individual people, can succumb to the overconfident counterfeiter syndrome -- in which the person or persons in charge think so highly of themselves that they place their own likeness on the One Dollar Bill instead of the likeness of George Washington!  Mr. Cohan's Power Failure is a well written cautionary tale on the perils of unbridled ambition and the importance of integrity.  Check it out!