While it seems perfectly clear to me, sometimes folks have a difficult time connecting the dots when I rail against Wall Street, the outsourcers, the academic elite and the 'by the numbers' execs. The destruction their twisted views of business and value is wreaking on American manufacturing can be hard for some to see, I guess. I owe a debt of gratitude to the Arizona Daily Star, Jack Welch and MIT for making the matter a lot clearer. Please read the sobering article to which this link takes you.
All finished? Any questions? In case there is any confusion, this is the architect of the downsizing of GE's vast Appliance Park in Louisville by about 75%; and GE's sprawling aircraft engine plant in Cincinnati by about the same; and the outsourcing of virtually every phase of locomotive manufacturing in Erie except for final assembly; and the conversion of GE from what was once, perhaps, the world's greatest manufacturer to what is now predominantly a finance company.
"Don't fall in love with your employees," he says. "If you have sixteen employees, at least two are turkeys," he says. "And don't bother trying to improve the performance of underachievers in the bottom 10 percent of the company's work force, he said. Tell them they're not suited to their jobs, and give them a way out."
This wretched excuse for a manager has boiled people down to numbers in the name of tough management. If you have sixteen employees, at least two are turkeys - sight unseen, no questions asked - don't bother trying to help them. Worst of all, this wretched excuse for leadership is the darling of Wall Street, and the author of a management book that skyrocketed to the best seller lists. He didn't just talk the talk either. He walked the walk to the ruination of thousands of families of hard working, dedicated GE employees.
The basis for the worship? Increased market value for the stock of GE. I suggest that the owners of that stock sell soon because he gave away GE's value adding capability for the long haul in order to create that paper wealth. (Thanks CNN for the GE stock chart to the right that shows just how short lived Jack's management success has been for his Wall Street friends) In fact, the utter inability to understand and manage manufacturing at a
level even remotely close to Toyota's drove his strategy of turning factories into paper. As the CNN chart shows, this "management guru" sold GE's soul - its manufacturing capability - to the devil for a few years of riches.
His 70/70/70 strategy - outsource 70% of everything GE does, with 70% of that outside the US, and 70% of that to India - decimated thousands of families. Same deal - do it by the numbers - 70% sight unseen, no questions asked, no exceptions. When you are slashing people's lives, I suppose there's no point in stopping at the 10% at the bottom.
And there he is at MIT - at the Sloan school of management, no less - which is quite appropriate. Alfred Sloan would have loved Jack Welch. By the numbers, people are the enemy of the company. Take care of the immediate financial lust of Wall Street - long term and all other stakeholders be damned. Yeah, Jack is Alfred's kind of guy.
And MIT will crank out another classroom full of America's best and brightest imbued with the belief that business is nothing more than a mathematical endeavor aimed at dismantling factories and families as fast as possible in order to funnel as much cash as possible, as soon as possible into the hands of a few managers and brokers.
Some kind of leader, Jack. You got personally rich by turning Thomas Edison's legacy manufacturer into a loan sharking outfit, and now you are teaching the next generation of managers how to follow in those shallow footsteps.
And MIT? Is the shadow of Sloan so long that you would invite this abomination of a manager in, rather than a senior executive from Toyota who could explain to the fresh, young minds how building plants and committing to people yields greater long term results for all concerned?
Note: After posting this, I realized that I had failed to show Mark Graban over at the Lean Blog the profesional courtesy of noting that he had already unleashed his own venom at Mr. Welch over the same article. I aplogize for going right into the rant mode without doing my normal due diligence. I urge the reader to visit the Lean Blog where Mark has asked the rhetorical question, "Is Jack Welch A Turkey?" Of course he is - it's a stupid question - but Mark has written a great piece in spite of the title.