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13 min 42 sec
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Power Failure: The Rise and Fall of an American Icon

Shows how General Electric, once as dominant as today's tech giants, came apart, and what its rise and fall teach leaders about money discipline, incentives, succession and hearing dissent.

Table of Content

General Electric once carried the swagger that Amazon or Microsoft carry today, and it still came apart, largely because success let it drop the habits that had made it strong. In Power Failure, William D. Cohan, who spent 17 years on Wall Street before becoming a journalist, traces that fall from Thomas Edison’s light bulbs to the 2007 to 2008 financial crisis.

GE led the electrical revolution, helped create radio and set landmarks in aviation, and its scientists gave the world the CAT scan. In the 1950s, CEO Ralph Cordiner would probably have laughed at anyone who doubted it would last.

Cohan’s story shows the company weakening as it traded away flexibility, careful money management, honest incentives and leaders who welcome bad news, until a feeling of being untouchable left it exposed. Each of those losses is a warning that a founder, a manager or a rising leader can test against their own organization this month.

A light bulb company ended up hunting submarines and building a radio empire. Its early knack for reinvention explains much of its rise, and losing that knack explains part of what came later.

Two financial panics, fourteen years apart, found GE first scrambling and then lending to others. A century later, the company returned to a borrowing trick bankers keep rediscovering, with predictable results.

GE preached ethics from the top while its managers met secretly with competitors. The CEO in charge never ordered anyone to break the law, and that is exactly what makes the episode worth studying.

Jack Welch picked his own successor, then came to regret it. Comparing the two men shows which leadership habits held GE together and which absences let a crisis do far more damage.

One GE leader could be brutal in his criticism yet let others change his mind. The other preferred agreement. A senior executive who left believed that difference cost the company dearly.

GE’s executives saw themselves as the mighty GE, beyond the reach of ordinary trouble. Then a terrorist attack, a shifting public mood and a financial crisis tested that belief one after another.

GE did not lose its strengths to a rival. It gave them away slowly, one good quarter at a time: the flexibility of its early decades, Coffin’s refusal to overstate what the company owned, the habit of arguing problems out in the open. Each loss looked harmless while times were good, and each one showed its cost when the shocks came.

The company is still building. Cohan notes that it keeps innovating in aviation, building striking new jet engines while also researching how aircraft could fly without burning fossil fuels, and it is putting effort into industrial 3D printing. A firm brought low by arrogance is trying to rebuild, which is something any person or team can do after a serious mistake.

The lessons travel well beyond a boardroom. Before you celebrate a profit, ask whether it rests on cheap borrowing or risky bets that one bad month could undo. When you set a target, picture the shortcut a tired, pressured person might take to meet it. And when you lead a meeting, make it safe for someone to tell you that you are wrong, because at GE the people who saw trouble coming had no one willing to hear them.

A famous name, a long history and a strong record are not safeguards. They are the reasons people stop checking.

About this book

What is this book about?

For most of the twentieth century, General Electric looked unbeatable. It led the electrical revolution, helped create radio, set landmarks in aviation and gave the world the CAT scan. Then a string of shocks, from the September 11 attacks to the 2007 to 2008 financial crisis, exposed a giant that had grown slow, opaque and dependent on its finance arm. William D. Cohan, a former Wall Street banker turned journalist, tells the story as a lesson for anyone building or running an organization. He follows GE from Thomas Edison's merger through Charles Albert Coffin's careful finances, Ralph Cordiner's price-fixing scandal, Jack Welch's numbers machine and Jeff Immelt's costly bets. The result is a practical warning. Cohan shows how cheap short-term borrowing, targets that ignore human nature, a successor who disliked pushback and a culture that felt invulnerable each weakened the company. Readers get a clear account of how a great firm failed, plus questions they can put to their own team, budget and leadership.

Book Information

Rating:

Genre:

Entrepreneurship & Startups, Management & Leadership

Topics:

Business Scandals, Incentives, Organizational Behavior

Publisher:

Penguin Random House

Language:

English

Narrator:

Walter

First published:

November 15, 2022

Pages:

816

Length:

13 min 42 sec

Get the book:

Amazon

Who it's for

  • Business leaders

    Founders and executives who want to see how a dominant company drifted into risk.

  • Managers

    Managers who set targets, choose successors or run decision meetings.

  • Curious about General Electric

    Readers curious about what really happened to General Electric, from Edison to the financial crisis.

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About the Author

William D. Cohan

William D. Cohan, born in 1960, spent 17 years on Wall Street at Lazard Frères, Merrill Lynch and JPMorganChase before turning to journalism. He studied at Duke University and at Columbia's journalism and business schools. His book The Last Tycoons, about Lazard Frères, won the Financial Times and Goldman Sachs Business Book of the Year prize in 2007. He has also written about Bear Stearns, Goldman Sachs and the Duke lacrosse case, and has been a contributing editor at Vanity Fair.

Ratings & Reviews

Ratings at a glance

4.4

Overall score based on 237 ratings.

What people think

Listeners find the book to be extensively researched and well-crafted; one review even highlights the incredible detail provided through facts and interviews. The storytelling is quite engaging, with one listener comparing it to a corporate thriller, and listeners appreciate the management and leadership lessons shared throughout. However, readability is a point of contention, with some finding it very accessible while others find it difficult to read. Furthermore, the book has faced criticism for being riddled with typos.

Top reviews

Narongrit

This book is a masterclass in corporate forensics, digging deep into the DNA of what once was America’s most respected company. Cohan’s research is nothing short of exhaustive. He captures the transition from the Reg Jones era to the cult of personality surrounding Jack Welch with the precision of a surgeon. You really feel the weight of every decision made in the Fairfield boardroom. To be fair, it is a massive commitment at nearly 800 pages, but the storytelling is so propulsive that it often feels like a thriller rather than a dry business history. The way he details the rise of GE Capital as a shadow bank is particularly illuminating and terrifying. It’s the definitive account of how obsession with 'making the numbers' eventually hollowed out an industrial giant.

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Watchara

Picked this up after seeing the buzz on business Twitter and it absolutely lives up to the hype as a corporate 'Icarus' story. The narrative surrounding the succession battle between Immelt, McNerney, and Nardelli is worth the price of admission alone; it’s high-stakes drama at its finest. Cohan doesn't just give you the 'what,' he gives you the 'why' by exposing the psychological machinery of the C-suite. Frankly, it’s rare to find a business book that balances complex financial engineering with such human, ego-driven storytelling. The breakdown of how GE Capital's 'black box' worked was a highlight for me. Even though the book is a literal brick, the pacing is excellent. A must-read for anyone interested in the pitfalls of modern management.

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Roongsak

The chapter on the 2008 financial crisis is a masterpiece of reporting that reveals just how close GE came to a total meltdown. Cohan utilizes his wealth of sources to show how the 'triple-A' rating became a cage for the company. It’s a gripping account of how the board of directors failed in their fiduciary duties, prioritizing the stock price over sustainable growth. I was particularly struck by the anecdotes regarding the private jet usage and the sheer extravagance of the executive lifestyle while the company was rotting from within. It’s a massive book, but it moves quickly because the characters are so well-drawn. If you want to understand the death of the American conglomerate, this is the book for you.

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Bee

Wow, Cohan does an incredible job weaving together hundreds of interviews into a cohesive, if tragic, narrative about the fall of an icon. This isn't just a dry list of facts; it’s a living, breathing story filled with direct quotes that make you feel like a fly on the wall in those high-stakes meetings. The focus on the 'power failure' of leadership is spot on. I appreciated how he didn't hold back on criticizing the board's role in enriching CEOs while shareholders lost everything. The prose is lively and energetic, making the complex world of industrial conglomerates accessible to anyone. It’s easily one of the best business biographies I’ve read in years, despite its daunting length.

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Pui

Ever wonder how a titan like General Electric simply evaporates into the background of the S&P 500? Cohan attempts to answer this by painting a vivid, though often biting, portrait of the CEOs who steered the ship into an iceberg. The prose is sharp, but I found his treatment of Jeff Immelt a bit one-sided. It felt like Cohan had a personal axe to grind at times. However, the sheer volume of primary source material—interviews, memos, and board minutes—is impressive. It’s a cautionary tale about the hubris of capitalism and the dangers of a board that is too enamored with its star CEO to ask the hard questions. Some sections drag, especially when he gets into the weeds with minor executives, but it’s mostly a fascinating ride.

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Bam

As someone who spent years analyzing industrial stocks, I can say the level of detail Cohan provides here is staggering. He manages to weave together thousands of disparate threads into a cohesive timeline of decline. Look, the book isn't perfect—it definitely could have used a more aggressive editor to trim the 150-page deep dives into bit players. But the core story of how GE transitioned from an engineering marvel to a financial services firm is handled brilliantly. You get a real sense of the boardroom machinations and the disconnect between the executives and the hundreds of thousands of employees they affected. It’s a sobering look at how easily a legacy can be dismantled by a few years of poor instincts and bad luck.

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Elena

Not what I expected from a 700-page business history, as it felt surprisingly personal and biting throughout. Cohan clearly has strong opinions on his subjects, and while his obvious disdain for Immelt is clear, it makes for an entertaining, if slightly biased, read. The book excels when it focuses on the culture Jack Welch created—one of relentless competition and performance-at-any-cost. Personally, I would have liked more coverage of the early Edison years, which are rushed through in the first few chapters. However, the subsequent deep dive into the 1980s through the 2000s is incredibly thorough. It’s a fantastic, if long-winded, look at how the 'Manager of the Century' might have actually set the stage for the eventual collapse.

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Roydao

Finally got around to finishing this behemoth and it left me with a profound sense of how ego destroys value. Cohan captures the hubris of the 'GE Way' perfectly, showing how the company’s internal training and culture created a feedback loop of arrogance. To be fair, the book is quite repetitive in places, and the author's voice can be a bit too present in the narrative. But the insights into the Reg Jones transition and the lack of R&D funding are crucial for understanding the full picture. It’s a very well-researched primer on the failures of 20th-century management styles. Even with the occasional typo, it remains an essential piece of corporate history for any serious business student or investor.

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Cholada

Truth is, the book could have used one more pass by a copy editor, but the content is too good to ignore. There are some glaring typos that shouldn't be in a prestige release like this. That said, the actual analysis of John Flannery’s short tenure and Larry Culp’s subsequent takeover is fascinating and provides much-needed context to the recent breakup. Cohan succeeds in showing that GE’s downfall wasn't a single event but a slow, decades-long erosion of common sense. The breadth of the book is its greatest strength and its greatest weakness. You get the full story, but you have to be willing to wade through a lot of secondary details. Still, it’s a highly readable and important work.

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Paiboon

While I’m a fan of financial history, the density of this book made it a legitimate slog to get through. Cohan has clearly done his homework, yet the editing feels surprisingly loose for a book of this stature. Not gonna lie, the frequent typos and repetitive sentences started to grate on me by the halfway point. He also leans heavily on snarky, first-person asides that distract from the factual narrative. He treats Jack Welch like a flawed god while casting Immelt as the ultimate villain, which misses some of the nuance regarding the R&D vacuum Welch left behind. It's a 3-star read because the information is valuable, but the presentation is messy. I expected something more polished and objective.

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Questions about this book

It tells the rise and fall of General Electric, from Thomas Edison’s early company to the damage of the 2007 to 2008 financial crisis. Cohan shows how GE grew by adapting to new markets, then weakened as it relied on its finance arm, pushed for quarterly numbers, and came to feel invulnerable. He draws lessons for leaders about money, incentives, succession and dissent.

Cohan points to several causes working together. GE Capital funded long-term loans with cheap short-term debt, which became dangerous after the September 11 attacks. Accounting that smoothed profits drew suspicion. Jeff Immelt invested in subprime mortgages and refused to sell real estate as the crisis unfolded. Underneath it all, executives believed the company was too mighty to need safeguards.

Cohan describes Welch as confident, deeply informed and willing to allow fierce arguments and change his mind, though his team also worked hard to make the numbers look good. Immelt, his chosen successor, is portrayed as less prepared, weaker at seeing how GE’s businesses connected, and uncomfortable with pushback. Former executive Dave Calhoun believed this unwillingness to use dissent left fixable problems unfixed.

Test whether your profits depend on cheap borrowing or risky bets that a shock could undo. When setting targets, consider how pressured people might cheat to meet them, as GE managers did in the price-fixing scandal around 1960. Invite open disagreement before decisions. And list the safeguards you skip simply because past success made them feel unnecessary.

It suits founders, executives and team leads who want a cautionary case study of a great company in decline, and anyone interested in business history or the financial crisis. Readers who set goals for others, choose successors or depend on borrowed money will find the GE episodes especially useful as warnings to check against their own work.

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Power Failure

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