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LATIN: The Critically Important Acronym,
May 8, 2009
No doubt for reasons of convenience, most (if not all) of the most important information about GE is summarized within a series of acronyms. For example, with regard to GE's "4 E's (+P) of Leadership," Jack Welch explained that the four Es represent positive Energy, the ability to Energize others, having an Edge (i.e. the courage to make tough yes-or-no decisions) and Execution (the ability to get the job done). What about P? "Passion!"The subtitle to William E. Rothschild'sbrilliant book refers to another acronym, LATIN, that reveals "the secret to GE's success": Leadership as well as Adaptability, Talent, Influence, and Networks. As Rothschild explains, his material covers GE's successes and failures since 1892 when it was established in New York, the result of a merger of of the Thomson-Houston Company and the Edison General Electric Comany. Charkes Coffin was GE's first president and Edison, who left the company two years later, initially served as a director. Rothschild describes the five success factors in each stage and provides "an objective assessment of what was done in each realm - both positive and negative."
The material is carefully organized within four sections, each of which covers a specific period throughout GE's history:
Part I "Living Better Electrically": 1879-1939 (Chapters 1-4)
Part II "Diversification and Decentralization": 1940-1970 (Chapters 5-9)
Part III "Portfolio Leadership": 1971-2001 (Chapters 10-13)
Part IV: "Back to the Future": 2001-Present (Chapters 14-16)
When reading Rothschild's book, it soon becomes obvious that those who led GE determined its priorities and objectives in each of the stages of its development. For example, Edison's focus was on identifying real problems, finding solutions and commercial applications for them, insisting that everything be patented and copyrighted; Coffin and Edwin Rice (1892-1921) ensured the success of the merger with a commitment to participative and consultative leadership, and willingly shared authority with associates; Gerard Swope and then Owen Young (1922-1939) took that commitment "to a higher level by creating ways for managers and employees to contribute to the company's strategies and policies; Charles Wilson and Philip Reed (1940-1950) were transitional leaders and Wilson "understood the old GE perfectly" but lacked the experience and the temperament to lead "the significantly charged company" after World War Two and voluntarily stepped won; Ralph Cordiner and Reed (1950-1963) spearheaded GE's decentralized growth with "a new and relatively unproven way," management by objectives (MBO); Fred Borch (1963-1972) continued decentralized management and, when realizing that he hadattempted to do too much ("GE can do anything it wants to."), "instituted a radical change in GE, enabling it for the first time to exit or prune products or even entire businesses"; lacking a co-leader following the premature death of his mentor, "Flip" Philippe, Reginald Jones(1972-1981) created a new "chairman's office," assumed the titles of chairman and CEO, and surrounded himself with those who had diverse personalities andf leadership styles; Jack Welch (1981-2001) accepted Jones's suggestion that he "blow up GE" (i.e. eliminate everyone and everything that did not add substantial value to the company) and did so - in Rothschild's words -- as a "contentious, demanding, celebrity CEO, a surgeon leader," [who was his]own inteligence network"; and finally, Jeff Immelt (2001-Present) who is more diplomatic "but still tough" and considers people selection and their development especially high priorities as he leads GE through what continues to be a troubled global economy. By the way, those who have a special interest in GE's current CEO are urged to check out David Magee's recently published book, Jeff Immelt asnf the New GE Way.
Rothschild devotes equal attention to each of the other four success factors (i.e. Adaptability, Talent, Influence, and Networks) during each of the four eras. Readers will also appreciate his skillful use of various devices that cluster key points. Briefly annotated checklists, for example, such as these: Common characteristics of all GE training programs (Pages 32 and 112), special benefits offered to electric utilities companies to ensure their growth and profitability (Page 92), GE's four-step process to recognize business opportunities (Pages 176-177), the steps Welch took to implement Six Sigma at GE (Page 214), how various CEOs successfully completed major change initiatives (Page 265), and finally, "some GE surprises and what the company did in response" (Pages 269-270). Other reader-friendly devices include boxed "Exhibits" that also cluster key points such as those that summarize the five ingreients for success for each of the four eras: "Living Better Electrically" (Edison through Swope and Young), Diversification and Decentralization (Wilson...Borch), Portfolio Leadership (Borch...Welch), and "Back to the Future" Strategy (Immelt). Rothschild also provides a "Highlights" section to introduce each of the four Parts and a "Takeaways" section at the conclusion of most chapters.
When concluding his book, William Rothschild acknowledges, "The GE Way doesn't always work consistently at GE; it can't possibly work for any other comany that attempts to embrace it indiscriminantly." Rather, he urges those in other companies to "adapt, rather than adopt, the GE approach" that he so brilliantly examines in this book.
- The book is written in a simple, conversational style that makes easy reading in the office, at home, on airplanes, etc. It is structured in short chapters and sections (some only 50-60 words long) with bold headings which allow the reader to resume reading where one left off after an interruption.
- Each chapter is previewed by approximately ten "Highlights" that stimulate the reader's interest, and concludes with a few "Takeaways". These are real gems, because they summarize the "lessons learned", many the hard way, by GE and make "recommendations" on how to apply these lessons to the business management activities of the readers, many of whom work for, or consult with, large and medium companies.
- The structure of each chapter is original. Each chapter analyses GE's successes and failures according to five factors: Leadership, Adaptability, Talent, Influence, Networks, which can be summarized by the acronym LATIN (no relationships implied between GE and Roman empires!) In turn, these five factors are displayed according to a magic circle, where each factor is reinforced by preceding one, and reinforces the following one. By comparing these circles from one chapter to the next, it is easy to follow the major changes in GE's evolution, with time and with CEOs.
The Secret to GE's Success stands out from other management books as recommended for executives, managers, students and the general public, but in particular for two classes of readers:
- GE veterans and long-time stockholders who meed to understand the reasons for GE's past success.
- The new generation of educated business persons, present and potential GE stockholders who want to learn from the history of GE, the world's most admired company and adapt the lessons to improve the success of their business and personal careers.
- "William E. Rothschild ..widely published management consultant, has now told the The Secret to GE's Success". so do we really need yet another book about GE.
- "But the truth of the matter is that, while much of this writing focused on the success of the 20years of the Welch ers, it didn't address the broader historical question that Rothschild poses...he asks and answers: what is it about GE that accounts for the company's success, not just under the Welch, but throughout the 126 years of the company's existence.
- Rothschild attributes the uniqueness of GE to the coverence of five success factors summarized by the acronym LATIN... but the reviewer believes that Rothschild missed Techolonogy as one of the major factors.
- The Reviewer differers from Rothshild's concern that IMMELT can achieve an 8% compounded ORGANIC growth...
Overall, the reviewer paints a very positive view of the book and shows that it can be useful for all leaders, provided they don't believe that the "GE Way" doesn't fit all companies in all situations... however there are may lessons to be learned from the GE success.
If you want to see the entire article visit: (www.emeraldinsight.com/sd.html).
Shedding light on a great company,
November 7, 2007
Most consumers know the ad slogan, "GE brings good things to life," but few know this complex company's fascinating 126-year history. GE is one of America's greatest business stories, spanning technological innovation, World War II, the politics of the New Deal, antitrust battles and the modern technological revolution.
William Rothschild, a 30-year GE veteran, reflects on what makes GE great, including its distinctive leaders and the strategic management decisions that shaped the company. This well-researched book is also unusual because it is part memoir and part management study. It's not a polished work; Rothschild strays as he tells his personal story. The book also needs a company timeline to put events into perspective. Still, we consider this unusual corporate profile useful reading for developing managers.
Soundview Executive Book Summaries
"Why We Like This Book!"
Rothschild's applicable chapters conclude with a "takeaway" lesson, explaining how the principles can be applied to the reader's business. The book's practical touches can help readers make GE's success secrets their own. " More...
From Strategy & Leadership- July August Issue.
" So do we really need yet another book about GE? In the wake of the avalance of writing about the Jack Welch ers- to which Welch, the former CEO , has contributed mightly- this might seem to be a legitimate question. But the truth of the matter is that, while much of this writing focused on the succes of the 20 years of the Welch era, it did not address the broader historical question that Rothschild poses in his latest book. He asks and answers: What is it about GE that accounts for the company's success, not just under Welch, but throughout the 126 year of the company's existence, and under a succession of chief executives of widely differing temperaments?
He attributes the uniqueness of GE, the oldest company tracked by the Dow Jones Industrial Average, to the convergence of five success factors summarized by the acronym- LATIN...More...
Donald Mitchell
Harvard Strategic Management Professor and Consultant
"Although Mr. Rothschild is appropriately proud of the company's success, he doesn't shrink from pointing out missteps, areas where processes need to be adjusted, and unnecessary delays in taking needed actions. He also wisely suggests that other companies not copy these practices, but rather adapt the practices to their own circumstances. In some conceptual exhibits, he provides helpful clues for how such adaptation might be done (see especially pages 59, 181, 208, 209, and 255)." More...
"The book is not just a history of GE, and it's not simply an examination of what has kept the company riding high, it's a toolkit for you to use for your own company. It's prescriptive, it's informative, and it offers so pretty far-ranging perspective. It's kind of like the 60 year-old you gathering every great teacher you've had along the way, having everyone write down one important life lesson, and then presenting it to a 10 year-old kid. That would be invaluable to any adolescent, just as The Secrets to GE's Success could prove invaluable to the future of your company." More...
"The Conference Board Review" (March/ April 2007)
"At the heart this is an intellectual history of GE---what it did, how it did it, and the thinking behind its decisions--- and a very readable history it is. And the Secret is a knowledgeable one. Rothschild worked at GE for more than thirty years and helped develop its competitive strategies. He also holds strong opinions about current issues---for instance, he believes in term limits for both CEOs and directors."
Directors & Boards Second Quarter 2007
Highlighted three parts of the book that would be of interest to their readers. These included: "Management by Objective", Broad (and Employee) Stock Ownership and Outside Board of Directors. More...
Commentaries
"Bill Rothschild's incisive analysis captures the "pearls" of decisions and wisdom that underpin General Electric, one of the century's enduring success stories"- Mylle Mangum..CEO IBT Enterprises.
"Bill Rothschild has created a book that is as consuming as a novel by using the GE story and at the same time, a hands-on workbook to evaluate yourself and your businesses." Rich Spriggle, Vice President- Human Resources- Dana Corporation.
"This book is a must read for the student, teacher, manager, executive and anyone who is interested in how an organization can not only survive, but thrive in a world of constant change, challenge, opportunity and threat. It is a lucid, penetrating, clear, well-written page turner." Warren J. Keegan, Distinguished Professor, Lubin School of Business, Pace University.
"I read " The Secret to GE's Success" cover-to-cover. It is well written and very instructive contribution to the management literature. I will never think of LATIN only as a subject I failed miserably in high school. Congratulations." David Hawkins, Lovett-Learned Professor of Business Administration, Harvard Business School.
"The best, latest and most interesting insider revue of what has made General Electric the great enterprise it still is and why in these times...Lessons for all companies" Robert Jones, retired GE executive.
"William E. Rothschild's book, The Secret to GE's Success is a very good read.. even for laypeople like myself who are not versed in management strategies. It captures your interest and holds it from beginning to end". Patricia O'Neill, free lance writer. |
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