
Jack Welch has died - lepton
https://www.wsj.com/articles/jack-welch-legendary-ceo-of-general-electric-dies-at-age-84-11583158270
======
optimiz3
Steve 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://en.wikipedia.org/wiki/Vitality_curve)

[https://money.cnn.com/2013/11/13/technology/enterprise/micro...](https://money.cnn.com/2013/11/13/technology/enterprise/microsoft-
stack-ranking/index.html)

~~~
stefco_
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...](https://en.wikipedia.org/wiki/W._Edwards_Deming#Seven_Deadly_Diseases)

~~~
rhizome
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.

------
KKKKkkkk1
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._

~~~
programbreeding
>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?

~~~
Digory
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...](https://www.wsj.com/articles/ge-powered-the-american-centurythen-
it-burned-out-11544796010)

~~~
AtlasBarfed
Voodoo accounting 101, followed by every strike-price-chasing CEO to the
detriment of everyone.

------
hummel
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.

~~~
jcomis
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.

------
gumby
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

~~~
exclusiv
> Good riddance to this blood sucker.

Really? You don't agree with his corporate style / strategy / books and that
justifies saying something like that?

~~~
gumby
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.

------
dayofthedaleks
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.

~~~
dralley
> Can someone speak to his lasting major contributions?

Inflicting "stack ranking" upon the world, for one.

Not all contributions are positive.

~~~
soapboxrocket
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.

~~~
abraxas
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.

~~~
hylaride
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.

------
williamDafoe
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.

~~~
TheOtherHobbes
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.

------
brandonmenc
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.

~~~
danmaz74
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.

~~~
michaelt
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.

------
abraxas
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.

------
kingkawn
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.

~~~
dobleboble
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...](https://www.timesunion.com/local/article/Dredging-up-the-
truth-5294643.php)

------
dredmorbius
"'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-...](https://www.reuters.com/article/us-people-
jackwelch/neutron-jack-welch-who-led-ges-rapid-expansion-dies-
at-84-idUSKBN20P20T)

------
alehul
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".

[1]
[https://en.wikipedia.org/wiki/Jack_Welch](https://en.wikipedia.org/wiki/Jack_Welch)

~~~
hugi
They always make you sound nice in the obituary.

~~~
tgv
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.

~~~
watwut
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.

------
Pxtl
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](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!"

~~~
Pxtl
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.

------
reggieband
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.

~~~
hfdh434535
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.

------
quaquaqua1
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.

~~~
briandear
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.

~~~
Ghjklov
Purely luck though he could’ve also alternatively remained jobless with a bout
of depression and became homeless after spiraling into ruin.

~~~
magduf
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.

~~~
quaquaqua1
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 :)

------
dbg31415
[https://www.perdoo.com/resources/stack-
ranking/](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.

------
scottlocklin
>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."

------
markus_zhang
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.

------
drubio
duplicate:
[https://news.ycombinator.com/item?id=22464246](https://news.ycombinator.com/item?id=22464246)

------
jdkee
This thread is relevant.

[https://threadreaderapp.com/thread/1234474399694237696.html](https://threadreaderapp.com/thread/1234474399694237696.html)

------
watsocd
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.

------
josefdlange
Someone call Jack Donaghy

------
DaniFong
I think his contributions are valuable but his ideas have been over-
implemented -- it's time the swing the pendulum swings back.

------
jorblumesea
[https://twitter.com/matthewstoller/status/123447439969423769...](https://twitter.com/matthewstoller/status/1234474399694237696)

------
big_chungus
Dupe:
[https://news.ycombinator.com/item?id=22464246](https://news.ycombinator.com/item?id=22464246)

------
deepaksurti
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](https://en.wikipedia.org/wiki/Jack_Welch#Personal_opinions)

[2]
[https://en.wikipedia.org/wiki/Vitality_curve](https://en.wikipedia.org/wiki/Vitality_curve)

edit: added [2] link

~~~
mytailorisrich
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.

~~~
bena
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.

~~~
mytailorisrich
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.

~~~
bena
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.

------
mrfusion
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.

------
PaulHoule
Please no black bar for Neutron Jack.

------
VLM
Technically he's not dead, he's just been downsized to increase shareholder
value.

~~~
ethbro
Public figures are still human, with families...

~~~
aswanson
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.

~~~
TulliusCicero
> 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.

~~~
aswanson
Yeah. That qualifies as evil in my book.

------
chirau
Plenty of heartless comments in this thread. It's a shame really. Rest In
Peace, Jack.

~~~
QuesnayJr
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.

~~~
s_y_n_t_a_x
Yeah bullshit. Look at the reception Fidel Castro got:
[https://news.ycombinator.com/item?id=13041886](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.

~~~
QuesnayJr
"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?

~~~
s_y_n_t_a_x
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.

~~~
QuesnayJr
What does that have to do with anything we're discussing? I was talking about
stack ranking, which has zero to do with unions.

~~~
s_y_n_t_a_x
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.

------
russellbeattie
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.

~~~
dang
[https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...](https://hn.algolia.com/?dateRange=all&page=0&prefix=false&query=by%3Adang%20streaks&sort=byDate&type=comment)

