Learn the key ideas of the book by Thomas Gryta , Ted Mann

Lights Out

The success and decline of the colossus General Electric

Ever since it was founded, in 1892, General Electric has always been much more than just a company. For generations, the United States' first power and electrical equipment company was synonymous with job security, and with solid, safe investment. Under the direction of Jack Welch, and with an evaluation of $600 billion, GE had established itself as America's most valuable company, across multiple sectors, ranging from media to plastics, from aerospace to energy, and finally to digital and financial services. Yet, following Welch's departure, everything began to fall apart. Lights Out is the story of General Electric's epic decline, and a text-book case of the mismanagement of an extremely complex company. 

Lights Out
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The rapid fall of America's most valuable company: a prime example of corporate mismanagement

Founded in 1892 by Thomas Edison, JP Morgan, and other partners, General Electric was one of the original companies included in the Dow Jones Industrial Average stock market index, and is the only company to have been included since its creation, for a period which spanned an impressive 110 years.

GE was the first power and electrical equipment company in the US, and almost solely responsible for bringing electricity to the country, powering everything from light bulbs to turbines, and consolidating itself in the minds of Americans in a way that very few companies did before them. For generations, GE has been synonymous with job security, solid investments, and elite business education for managers. From its humble beginnings, it grew to become a real-world colossus.

In 2000, after two decades of leadership under the legendary CEO Jack Welch, GE entered the 21st century as America's most valuable and credible company, valued at $600 billion. The company was involved in a wide range of areas, including media, plastics, aerospace, energy, digital, financial services, and more. In the eyes of many, GE was the best-managed company in the world, and Jack Welch was considered to be the greatest CEO of the 20th century.

Yet, less than two decades later, the GE of times past is no more. After Jack Welch left the company in September 2001, and was replaced by his hand-picked successor, Jeff Immelt, the company began to show a dramatic decline. The precipitous decline in GE's market capitalisation saw the value of the company reduce by 90% in two decades, from its peak in 2000, to approximately $55 billion. The fall of GE has proved to be a prime example of what happens when an overly complex business is poorly managed. 

  

The key ideas of "Lights Out"

01.
The rapid fall of America's most valuable company: a prime example of corporate mismanagement
02.
“Neutron” Jack Welch’s approach: short-term success, guaranteed long-term failure
03.
The hot potato called GE Capital: the bank woven into the corporate fabric
04.
Jeff Immelt’s debut, and the weighty legacy left by Welch
05.
John Flannery, the finance expert who unearthed years of dysfunctional practices
06.
Quotes
07.
Take-home message
 
 
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