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Blink 3 of 8 - The 5 AM Club
by Robin Sharma
Power Failure summary
William D. Cohan
The Rise and Fall of an American Icon
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4.5 (196 ratings)
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What is Power Failure about?
Power Failure (2022) details the rise and fall of General Electric – once a great success story of international business. But its legacy went badly awry, as even casual consumers of business news will remember. Power Failure: The Rise and Fall of an American Icon (2022) gives a startlingly detailed account inside the behemoth corporation, examining what went right – and then wrong.
About the Author
William D. Cohan is a veteran of the financial industry and a former GE employee. His other New York Times bestselling books include The Last Tycoons: The Secret History of Lazard Frères and Co. (2007), House of Cards: A Tale of Hubris and Wretched Excess on Wall Street (2009); Money and Power: How Goldman Sachs Came to Rule the World (2011); and The Price of Silence: The Duke Lacrosse Scandal, the Power of the Elite, and the Corruption of Our Great Universities (2014).
Table of Contents
Key idea 1 of 6
Stay flexible
Although General Electric eventually came to resemble a complicated, symbiotic organism that took on a life of its own, a staggering sci-fi monster of finance, it was not always that way. The company evolved many times over the years as circumstances changed.
It grew quickly from its origins in a battle for supremacy in the early electrical industry. Light bulb inventor Thomas Edison’s company merged with a rival and the company began shifting and expanding to deal with ever changing markets.
During World War I, GE expanded to meet military needs like submarine detection, with inventions that were repurposed after the war and formed the roots of its later industrial core. Then, one of the company’s scientists developed a better radio transmitter, launching GE into that sector, where it built RCA and successfully marketed the new product it wanted to sell.
The lax oversight that would allow GE to become a sprawling conglomerate was not in evidence in the 1930s, as GE had to spin off RCA because of monopoly concerns. (The company later bought it again when the government calmed down about monopolies).
By the 1940s, GE had transformed into a corporate juggernaut. The core of the company had already begun to change – Fortune magazine called it an investment trust that also built things.
If there was a place to make money, GE found it. Yet even as a huge company, it put an emphasis on strategic thinking for the future, though executives sometimes took sharply differing tacks on how to do that.
Over time, though, the conglomerate went from a nimble market leader to a bit of a lumbering dinosaur, overly dependent on its capital business.
Huge pressure came fast in the early 2000s, starting with the terrorist attacks of 9/11, which hammered GE. It held reinsurance on not only the towers, but also the planes. It continued in the shaky market afterward.
A changing corporate environment meant GE and other companies were no longer permitted to run amok with little oversight. Public sentiment shifted against the company for its lack of transparency, and accounting practices that had long propped up the company’s image began to raise eyebrows.
Although many factors contributed to GE’s fall, entrepreneurs and others would do well to heed the rather vivid object lesson: If making a huge profit requires you to give up too much flexibility, and depend on risky ventures, you might want to consider other ways of making a profit.
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Who should read Power Failure
- Anyone interested in the inside workings of business
- Leaders who want to learn from the experience of CEOs going through difficult times
- Employees who want to better understand the forces at play inside the companies that dictate their future
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