Book Review: Lights Out

I have always been interested in GE since I was a kid. My best friend in high school had a parent that worked for the company for a bit and liked it. The parent was successful and I had GE on a list of companies I’d like to work for as I went into college. I never followed through, but I’ve been alternately impressed and disappointed in the company for much of my life.

I picked up Lights Out as a business related book that looks at the history of the company from Jack Welch as CEO to recent times. I had always wondered how would look back at Jack Welch over the years, after looking into the company and seeing how much of their success and profitability came from finance, not products. I knew this book might be slightly skeptical of the GE management philosophy, and I read it with that in mind.

Early Days

The book is a bit of a flashback. It starts briefly with the transition of the CEO role to John Flannery. It sets the stage that the company is struggling. From there it goes back to Jack Welch, his growth in the company and then the success through his reign.

The book notes that a lot of the pressure he put on managers was to meet the external expectations of the public and investors. He expanded the role of GE Capital, their financial arm, using the tripe A rating of the industrial company to loan customers money and help finance purchases. This made GE a de facto bank, in addition to their industrial might, and helped stabilize poor performance in some sectors.

It also allowed the high profits of banking to grow the company without the regulation and oversight banks have.

Welch also added lots of companies, growing the breadth of GE’s business. At the same time, they turned out impressive managers who could run their businesses. While I always suspected that this wasn’t all true, this book talks about some of the pressures managers faced, the power of a conglomerate to help them hide some shortcomings from investors, while ensuring the overall success of GE continued. I think if I’d joined the company in 1990, I’ve have been at the tail end of a successful run. I also might have expected that dividend to continue through my career, which would have been a problem.


Welch’s successor struggled. Not the least of which was after 9/11, but some of the success GE had before that was tempered with more regulation of the company as a pseudo-bank.

I don’t quite know what to think of the GE of 2001-2017. As they tried to lesson their reliance on finance, grow into software, and continue to prove success to Wall Street. In some sense, I saw this as the slow decline of a company that struggled to reinvent itself and move away from some of the heavy industry and finance that had been it’s success story.

I also think that the author misses some of the changing nature of the world. GE did learn to build better products that lasted longer. Even with the maintenance contracts, sustaining growth in power plants and jet engines would be hard. Certainly they haven’t been able to dominate in software, and it doesn’t seem that Immelt kept up managerial excellence.

The book doesn’t quite dive deeply into the GE world, being more of a summary across time of what was published about the company and might be inferred.


I don’t know that I learned a lot about business here, other than what I’ve thought. It’s very messy, there isn’t a magic bullet, and you need a lot of resources to recover from the possible bad decisions and mistakes your management makes.

GE is a success in some ways, but like one of the reviewer’s comments I read. It’s an American story, getting caught up in finance and money, not the basics of building a great product and selling it.

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