
GE Powered the American Century, Then It Burned Out - haaen
https://www.wsj.com/articles/ge-powered-the-american-centurythen-it-burned-out-11544796010
======
Aloha
The article gives the answer early on - the company is still in a phase of
change from selling GE Capital - for 20 years they were used to using Capital
as a source of excess cash to paper over other temporary market issues
elsewhere in the company - they no longer have that ability - so now the
cyclical nature of normal business will show directly on their balance sheets
and statements.

GE will probably be just fine - in a decade.

~~~
xapata
I'm dubious that business has a cyclical nature. It's hard to distinguish a
random walk from noisy waves.

~~~
Aloha
Demand for certain goods and commodities are cyclical - I design dispatch
consoles, we tend to get customer verticals in clusters - public safety,
power/utilities, transportation and it continues in a cycle, based on
replacement intervals (on a 20 year lifetime) - I know Motorola sees similar
cycles too - they'll oscillate between public safety and commercial markets.

I know there are similar business cycles in aviation, power generation and
industrial controls.

~~~
xapata
If I understand you correctly, you're suggesting that the demand for dispatch
consoles follows a wave with a 20-year period, because the device must be
replaced approximately every 20 years? I can believe that for an individual
buyer, but for the market as a whole to follow the same period, that'd imply
that every buyer made the bulk of their purchases at around the same time.
That seems unlikely.

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protomyth
Well, maybe their "rank and yank" fostered a low teamwork environment or they
fired the people who would actually of helped them with the next big thing.
Frankly, their management contribution to American business has to be one of
their darkest legacies.

~~~
tinkerteller
My employer is famous for hiring folks at executive levels from GE and I can
tell you without doubt that most of them had been some of the the worse execs
I have came across. I can easily see GE as frothing with some of the worst
senior level clueless "talent" out there.

I think GE used to be great under Jack Welch because he ruthlessly demanded
results. When you operate in that mode virtually anything works because
everything other than success gets brutally weeded out. You can start any
number of new businesses and the evolution system implemented by ruthless
pruning eventually will yield successful species. After Welch left, GE decided
to use most of his principles as blueprint except one: demand top notch
results and ruthlessly weed out everything else. One company that operates
like GE under Welsh these days is Amazon. It would be very hard for any exec
to spend 5 years at Amazon without showing amazing results. On the other hand
I know plenty of execs at big 5 tech who have sailed through for as much as
decade by simply "managing up".

~~~
raverbashing
This seems like a "darned if you do, darned if you don't" mentality

Allowing managers to coast and play office politics sucks but also squeezing
them doesn't seem very positive (though I'm sure it's great for results)

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haaen
Non-paywalled version here.

[https://outline.com/zyHms4](https://outline.com/zyHms4)

~~~
latchkey
This is turning into the modern day 'first comment.' HN should really just
generate this link as a feature.

Edit: My bad, this has been covered:
[https://news.ycombinator.com/item?id=17320147](https://news.ycombinator.com/item?id=17320147)

~~~
paulcole
Copyright Infringement As A Service (CIASS)— I like it!

------
captainperl
TLDR;

11,000 words of gossip about GE CEO promotions with no insight into the actual
business problems.

Makes the authors look like incompetent wannabe "journalists."

~~~
graycat
Nice and short, and I tend to agree.

The article ended with an invitation to people who know about GE or some such
to comment, but apparently need to be a subscriber to the WSJ to do that.

Subscribe to the WSJ? When I was at FedEx, I subscribed to the WSJ, got the
copy each day, but soon concluded that the content was not very useful, had
serious flaws like your "no insight", and have nearly totally ignored the WSJ
since.

"Gossip"? I agree. And I have an explanation that applies to the WSJ, Forbes,
etc.: The writing is not to be informative but a manipulation of the assumed
emotions of the readers. The manipulation is to write the _stories_ so that a
reader can imagine that they are C-level or BoD people, have a vicarious
emotional experience, and, thus, tell themselves that they are _learning about
business_. No, they are learning about applied formula fictional, manipulative
story telling. The stories concentrate on gossip, cut of the jaw, grimace on
faces, style of eyeglasses, and other personality fluff as if that is what is
really important; no, it is what is assumed a reader, maybe the guy in the
mail room, the floor cleaning squad, or a security guard, can best find
interesting. It is as if the assumption is that only a tiny fraction of the
population cares about serious business information but nearly everyone has
emotions. Manipulation of emotions, not meaningful information.

A good fraction of the comments mention the stuff that GE has long believed
that "a good manager can manage anything" or some such. I heard this strongly
when I worked at GE. To me the problem with that claim was that it called for
management with too little knowledge of the business, just as in your "no
insight".

Yes, early in my career, I was at GE: I was the applied math, statistics,
digital filtering, fast Fourier transform, numerical analysis, curve fitting,
etc. guy at the HQ of GE Time Sharing. Looking back, the place was devoid of
"insight".

In the WSJ article, they keep mentioning GE Power. Okay, that has to do with
gas turbines. Yup, GE got into that field early in the history of aviation for
turbines for superchargers for airplanes at high altitude with thin air. There
the need was just desperate.

Sooooo, GE has gone now nearly 100 years with gas turbines. More generally
apparently a pillar of the business has been urgent demands from the US
military: (1) The engines on the FedEx planes were from GE in Lynn, MA and
originally for a USAF drone. (2) The bigger part of GE aircraft engines was in
Ohio and did the big high bypass gas turbine engines, IIRC, originally needed
for the Lockheed C5A.

[For subsonic flight, high bypass works better than pure jet. Why? For
throwing mass m out the back at velocity v, pay (1/2)mv^2 in energy but get
momentum change, which is what moves the plane, mv. So to get the most
momentum from the given energy from the fuel, want lots of m and less of v. So
of course do throw some hot air out the back but also have a big _fan_ ,
ducted propeller, grabbing huge volumes of air and pushing it out the back
_around_ the core that is burning the fuel, that is, _bypassing_ that core. Of
course, Pratt & Whitney, Rolls Royce, and some others around the world also
are into aircraft jet engines.]

Theme: GE was really slow to come up with new businesses. That is, their Power
division is from initiatives nearly 100 years old. It's been a good business,
but there have been too few such while the rest of business charged ahead,
e.g., with computing while GE missed out.

GE was early in both transistors and computing. Some of their computing was
the computer for the MIT Project MAC, MULTICS. Suddenly some in GE saw that
their transistor business was no longer just a profitable cash cow, that
technology progress, really integrated circuits, would mean new R&D and
capital expenses. So, the generalist managers with "no insight" bailed -- got
out of the transistor business and sold the computer division to Honeywell.
But MULTICS was a big deal, the first with a lot of stuff, e.g., attribute
control list security (ACLs) still important, and lots more. IIRC we can trace
much of the architecture of the Intel chips, 386 on, back through Prime
Computer (a _super-mini_ computer based heavily on MULTICS and started by some
Honeywell engineers) to MULTICS.

Lesson: Due to the generalist managers with no insight, GE missed out on the
future of computing.

For more, in principle, there's no good reason GE could not have done what
Intel, Microsoft, Cisco, Google, QUALCOMM, Facebook, Amazon, Apple, etc. have
done.

Lesson: GE just did NOT do well cooking up good new businesses internally.
Yes, the generalist managers would buy businesses based on whatever, sell
divisions based on whatever, but for all that financial musical chairs, with
only a few exceptions, e.g., GE Capital, long essentially an unregulated bank,
just would not think hard about the future of new directions in business.

Yes, there are some close parallels with IBM. I worked there, too, in an AI
project at their Watson lab. For one of the problems we were trying to solve,
I did, later published, some applied math, a colleague called "radical,
provocative", that was much more powerful than what we were doing with AI. I
also proposed a research direction, in applied stochastic optimal control, the
field of my Ph.D. dissertation, but IBM and Watson management didn't want to
let me do. Uh, stochastic optimal control can be a massive user of computer
hardware and in a sense an ambitious direction for AI. Since then the
Princeton ORFE department has been working hard on that direction.

Lesson: IBM's Watson management and IBM more generally blew a good
opportunity. Reason? A big one is the "myth of the generalist manager".

Suspicion: Long the internal GE office power politics was really severe with
heavy emphasis on severity and appearances over reality, lots of gossip, etc.
The WSJ article hints at this, and, besides, it's standard and called "goal
subordination", i.e., fight with the guy down the hall, _subordinate_ the
goals of the company to those of personal promotion via political infighting.
One of IBM CEO Gerstner's early remarks at IBM was that it was IIRC "the most
inwardly directed, arrogant, process-oriented company" he ever saw. From my
time in both GE and IBM and the WSJ article, I have to agree with that remark
of Gerstner and suspect it applies to both IBM and GE.

Fun stuff: Simple, O(n) solution to the Google lake volume puzzle:

[https://news.ycombinator.com/item?id=18648999](https://news.ycombinator.com/item?id=18648999)

~~~
astrange
How did you end up working at both GE and IBM? I hope you've found something
better to do by now.

~~~
graycat
Yes Dad's father ran the village general store, and his stepfather ran the
village feed and grain mill. So Dad had a background in running a business.
Still he got a Master's and a job for a salary. It paid the bills, paid for
both my brother and I to get Ph.D. degrees, etc. But it wasn't real
_business_.

I was at GE because they gave me a big raise from working the Navier-Stokes
equations for the US Navy. Soon I was making in annual salary six times what a
new high end Camaro cost. That was enough for some Kennedy Center, Wolf Trap
Farm Park, Shenandoah times, good French cheese and grape juice, big times on
Turkey Day, XMAS, etc. for my wife and I. She went for her Ph.D.

Later I wanted to do applied math on Wall Street -- learned of Renaissance
Technologies and James Simons only much later, too late. And by then my wife
was seriously ill so to have a stable job to help take care of her, I took a
job at IBM's Watson lab in an AI project. I saved money even in grad school;
at IBM for the first time in my life, I lost money -- cost of living in NYS
was outrageously high.

For now, right, I'm doing a startup, am a sole, solo founder, do all the core
applied math and the computing. So far the computing is 100,000 lines of
typing and appears to run as intended. I'm rushing to gather more input data
and go live. Latest problem: My first server has 4 memory sticks, DIMMs, DDR3,
ECC, each stick 4 GB for 16 GB in total. Last night I discovered that Windows
is seeing only 3 of the sticks and is using only 2 of them. So, later today
will remove and replace the DIMMS and see if that gets me back to the 16 GB of
main memory (when I first plugged the computer together, Windows saw and used
all 16 GB -- last night the Windows memory test feature looked at the 8 GB and
found no errors). Will be installing two new hard disk drives, 2 TB each. Just
fixed a hard error on a hard disk -- with careful use of ROBOCOPY options,
moved the data off, did a _long form_ format, moved the data back, and I no
longer get requests from Windows to run CHKDSK, check disk. That's how the
work goes.

~~~
gregw2
I hear you about the DIMMs and ROBOCOPY. Tip: I spend less time on that
hardware minutia and backup reliability and restore operations now that I rent
servers on AWS. You might want to try it. Focus your time where your value add
is. Also looks good to investors/customers. Also helps avoid overprovisioning
(capital expense that doesn't get recovered when business falls through).

