WEBVTT - Part Two: Jack Welch Is Why You Got Laid Off 0:00:02.160 --> 0:00:05.520 All right, you sons of bitches, let's fuck this popsicle stand. 0:00:05.559 --> 0:00:10.200 It's time for a goddamn podcast. How was that? Everybody good? 0:00:10.520 --> 0:00:13.119 You went right past blown all the way to fourth base. 0:00:13.320 --> 0:00:15.520 Everybody happy with the popsicle stand? Yeah? 0:00:15.560 --> 0:00:17.759 Love it right now? 0:00:18.079 --> 0:00:22.079 Welcome to Behind the Bastards. Everybody, it's a podcast bad 0:00:22.120 --> 0:00:28.319 people talk about them. M Yeah, it's a good time. So, 0:00:28.680 --> 0:00:31.640 uh we should you know, let's let's talk about this 0:00:31.680 --> 0:00:34.680 real piece of ship, this guy who sucked. Uh. Ceo 0:00:35.000 --> 0:00:40.560 now of General Electric, Jack Welch. So about a year 0:00:40.760 --> 0:00:44.440 into his tenure as CEO, Jack Welch gave a speech 0:00:44.760 --> 0:00:48.000 by the way, my co hosts as as with the first. 0:00:47.720 --> 0:00:52.519 Episode, so impressive that you forgotten. 0:00:53.840 --> 0:00:56.040 The energy was incredible. It was I thought I could 0:00:56.040 --> 0:01:01.040 sleep through this one. But hire Michael Sway happy to 0:01:01.040 --> 0:01:02.120 be back for part two? 0:01:02.360 --> 0:01:04.600 Part two? Baby, well, I do want to get in 0:01:04.680 --> 0:01:05.759 here again. 0:01:06.000 --> 0:01:06.240 Yeah. 0:01:06.240 --> 0:01:08.520 What should people know about your current projects? 0:01:09.000 --> 0:01:10.200 Abe? I did it in part one? 0:01:10.240 --> 0:01:10.400 You do? 0:01:10.560 --> 0:01:11.480 Yeah? 0:01:11.520 --> 0:01:15.240 So, basically, Michael and I are making an independent film. 0:01:15.360 --> 0:01:18.600 It's based on the time that Michael's father came out 0:01:18.640 --> 0:01:21.680 as a gay free will. Michael was like a teenager 0:01:22.040 --> 0:01:24.360 and we both thought it'd be an interesting story to 0:01:24.480 --> 0:01:27.840 show that like on film like as are coming of 0:01:27.880 --> 0:01:30.800 age like sex comedy. So we wrote it and now 0:01:30.800 --> 0:01:34.520 we're producing it. And you can help us by going 0:01:34.520 --> 0:01:39.040 to seed Andspark dot com, slash fund, slash Papa hyphen 0:01:39.160 --> 0:01:42.279 Bear and you can become a part of the movie. 0:01:43.360 --> 0:01:46.560 You can, you know, they got tears there. You can 0:01:46.600 --> 0:01:50.400 click on the buttons. And we're stoked Gray Rewards. Yeah, yeah, 0:01:50.400 --> 0:01:53.000 we're stoked about telling the story. So if you can't 0:01:53.040 --> 0:01:56.520 help us out, and you know, we'll make the film, right, 0:01:56.760 --> 0:01:58.800 So that's why we're that's why we're here. 0:01:59.280 --> 0:02:01.279 No, no, no, we're here to catch up with Robert, 0:02:01.280 --> 0:02:04.640 which is always a divine pleasure. Well not to, but 0:02:04.680 --> 0:02:07.000 you're also right. Both things are true. And the only 0:02:07.040 --> 0:02:09.080 thing I wanted to add is if you're not aware 0:02:11.320 --> 0:02:13.960 Abe directed like most of the videos that Cracked, I 0:02:14.120 --> 0:02:16.880 was over it cracked. If you know us from Cracked. Yeah, 0:02:16.960 --> 0:02:19.919 so so like we can do it. I can say 0:02:19.960 --> 0:02:22.440 with great confidence it'll be a good movie. I bet 0:02:22.520 --> 0:02:25.280 Rober would even back us up on that. So check 0:02:25.320 --> 0:02:27.960 it out over there where Abe said. And if you're 0:02:28.000 --> 0:02:29.760 interested at all in that hook. 0:02:29.560 --> 0:02:34.000 Yeah, I am so excited for this movie. I think 0:02:34.240 --> 0:02:37.000 I enjoyed your your your previous movie kill me now, 0:02:37.400 --> 0:02:39.520 and I would like I would like you to get 0:02:39.560 --> 0:02:43.320 another movie out. So listeners, help make my dream come 0:02:43.360 --> 0:02:47.959 true by forcing Michael and Abe at gunpoint to make 0:02:48.040 --> 0:02:53.959 another film. Yes, yes, daddy, yeah yeah. Hurt them, hurt 0:02:53.960 --> 0:02:57.440 them for me. So back to the sentence I was 0:02:57.480 --> 0:03:00.000 in the middle of when I realist I hadn't introduced you. 0:03:00.160 --> 0:03:02.280 About a year into his tenure as CEO of GE, 0:03:02.639 --> 0:03:05.160 Jack Welch gave a speech at a gathering of executives 0:03:05.160 --> 0:03:06.840 in New York City. It was meant to be his 0:03:06.880 --> 0:03:09.600 introduction to the company leadership, where he would present them 0:03:09.600 --> 0:03:11.760 with his vision of the future and wrangle the most 0:03:11.800 --> 0:03:15.280 influential minds in the country behind his plans, or and 0:03:15.320 --> 0:03:17.880 get the most influential minds in the company behind his 0:03:17.919 --> 0:03:21.960 plans for GE's future. His twenty minute speech was titled 0:03:22.080 --> 0:03:25.520 Growing Fast in a Slow growth Economy, and it presented 0:03:25.760 --> 0:03:29.959 a very Menichean view of the country's economic future. From 0:03:29.960 --> 0:03:32.720 now on, companies would either be the dominant entity in 0:03:32.800 --> 0:03:36.480 their market or doomed to failure mediocrity, which he defined 0:03:36.480 --> 0:03:39.400 as not being first or second in the industry would 0:03:39.440 --> 0:03:41.920 be seen as a death knell. He announced that if 0:03:42.000 --> 0:03:45.040 GE couldn't guarantee itself that kind of dominance in one 0:03:45.040 --> 0:03:48.240 of its many industries or businesses, and needed to sell 0:03:48.240 --> 0:03:51.080 that business off or shut it down or otherwise prune 0:03:51.120 --> 0:03:52.880 it away in order to focus on the things that 0:03:52.920 --> 0:03:56.080 it could dominate. Now, one thing you might notice about 0:03:56.120 --> 0:03:58.960 this is that, like as a consumer, theoretically, one of 0:03:59.000 --> 0:04:01.160 the big benefits of can capitalism, one of the things 0:04:01.160 --> 0:04:04.080 that set it apart from, for example, the Soviet Union, 0:04:04.440 --> 0:04:07.200 is that customers would have like choice between a bunch 0:04:07.240 --> 0:04:10.280 of different products. But Jack is saying, no, no, no, 0:04:10.560 --> 0:04:13.280 fuck everyone who's not like number one or number two. 0:04:13.520 --> 0:04:16.240 It's not worth being in that business. It's not worth 0:04:16.800 --> 0:04:19.440 making a simple profit in order to like provide people 0:04:19.440 --> 0:04:20.720 with options Like fuck that. 0:04:21.360 --> 0:04:23.960 Right, I do love I read a whole book on 0:04:24.000 --> 0:04:26.720 this that I can't go into because it's your show. 0:04:26.760 --> 0:04:29.240 But I love that he also is right that you 0:04:29.720 --> 0:04:33.080 have to have a second one and how fucking simple 0:04:33.240 --> 0:04:36.600 humans are because you're like, you're either someone who likes 0:04:36.640 --> 0:04:39.839 to do what everyone's doing, or you're someone who likes 0:04:39.839 --> 0:04:42.279 to be contrarian and not do what everyone's doing. So 0:04:42.320 --> 0:04:44.800 you always get there's like Huggies and panthers or coke 0:04:44.880 --> 0:04:47.880 and Pepsi. Yeah in everybody, Like that's as big as 0:04:47.920 --> 0:04:50.360 our minds get. Is like I'm a sheep or I'm 0:04:50.400 --> 0:04:53.080 an anti sheep. Those are the types of people that 0:04:53.120 --> 0:04:53.560 buy things. 0:04:53.600 --> 0:04:57.640 Yes, anti sheep, anti sheep. 0:04:57.960 --> 0:05:02.120 This is why, famously, the one cultural reservoir our country 0:05:02.120 --> 0:05:06.760 had of anti capitalist thinking was in those brave, heroic 0:05:06.920 --> 0:05:11.839 souls who rejected the pepsi coke dichotomy and instead switched 0:05:11.839 --> 0:05:12.719 to Doctor Pepper. 0:05:13.160 --> 0:05:18.760 Doctor Pepper's playing sea Baby, and that's when we got 0:05:18.839 --> 0:05:20.920 soda perfection into Dr Pepper. 0:05:21.080 --> 0:05:24.919 So really it's very funny when I'm anywhere else in 0:05:24.960 --> 0:05:28.200 the country, as I usually am now, but Texas, I 0:05:28.240 --> 0:05:31.159 can like tell who's a Texan by when you go 0:05:31.240 --> 0:05:33.479 out to eat, who gets a Doctor Pepper, Like if 0:05:33.520 --> 0:05:36.520 you're at a failing to joint. Yeah, it's it's a thing. Uh, 0:05:37.320 --> 0:05:39.599 No one else drinks it but us. The rest of 0:05:39.600 --> 0:05:41.600 the country doesn't understand. 0:05:43.080 --> 0:05:43.400 Watching. 0:05:43.839 --> 0:05:46.280 But he's from Colorado, which is North Texas. 0:05:46.400 --> 0:05:46.760 That's true. 0:05:46.800 --> 0:05:49.760 I drink doctor Pepper. I think I also think diet 0:05:49.800 --> 0:05:52.520 Doctor Pepper is the best version of diet that. 0:05:52.839 --> 0:05:56.600 I'm imagining, Jack Well hearing you talk about doctor Pepper 0:05:56.760 --> 0:05:59.719 consuming doctor that's good, Doctor Wells. 0:06:02.360 --> 0:06:04.320 I'm gonna be honest with you both. I'm actually a 0:06:04.400 --> 0:06:05.279 mister PIB man. 0:06:06.040 --> 0:06:06.960 Oh see, the. 0:06:09.720 --> 0:06:13.240 PIB makes a fine soda. Look, I love that we're 0:06:13.279 --> 0:06:16.680 just doing free ads for soda. Hey, I tried to 0:06:16.680 --> 0:06:19.080 get us back on track. It is it's good shit, 0:06:19.279 --> 0:06:23.920 it is okay. PIB is just like excellency. Yeah. If 0:06:24.000 --> 0:06:26.599 Jack Welch had his way, there would be no mister 0:06:26.720 --> 0:06:29.480 PIB because it's too good a product to be number 0:06:29.520 --> 0:06:32.160 one or two in its category. Right, This is the 0:06:32.240 --> 0:06:34.560 kind of hell he wants for us, where there's only 0:06:34.640 --> 0:06:38.520 pepsi and coke. That son of a bitch. So Welch's 0:06:38.520 --> 0:06:41.480 goal at c S CEO, as he told the audience 0:06:41.520 --> 0:06:43.719 in this speech, was to make GE the most competitive 0:06:43.839 --> 0:06:46.680 enterprise on the planet. The steady growth that had made 0:06:46.720 --> 0:06:49.560 it the bluest of blue chip corporations prior to this 0:06:49.839 --> 0:06:53.360 was no longer acceptable. Welch had been inspired in this 0:06:53.480 --> 0:06:57.120 by a number of articles in Fortune magazine analyzing famous 0:06:57.200 --> 0:07:00.560 Prussian generals from the eighteen hundreds, and for so reason, 0:07:00.880 --> 0:07:03.160 trying to use them as business gurus. This has been 0:07:03.240 --> 0:07:05.839 like the last thing he read before giving the speech, 0:07:05.880 --> 0:07:08.400 and it had a huge impact on like the way 0:07:08.440 --> 0:07:10.320 he framed everything that he was doing. 0:07:10.680 --> 0:07:12.920 And the number one way business at time were written 0:07:13.400 --> 0:07:16.080 is you're like, how did some guy four hundred years 0:07:16.080 --> 0:07:18.240 ago who murdered and raped everyone he met doing it? 0:07:18.360 --> 0:07:19.360 That's probably good? 0:07:20.480 --> 0:07:23.240 Well, it's funny because like that didn't used to be 0:07:23.360 --> 0:07:25.760 the thing, like, especially if you go back to I 0:07:25.800 --> 0:07:28.720 don't know, like the fifties and sixties and you were 0:07:28.720 --> 0:07:31.040 to be like, we should take you know, our management 0:07:31.080 --> 0:07:34.000 advice from from military leaders. Well, for one thing, most 0:07:34.000 --> 0:07:35.880 of those guys fought in World War Two, and they'd 0:07:35.920 --> 0:07:37.880 be like, you mean the idiots who like got all 0:07:37.920 --> 0:07:41.080 my friends killed because they fucked up constantly. No, I 0:07:41.080 --> 0:07:44.080 think I'm good. I don't think that's like the management 0:07:44.200 --> 0:07:47.360 tactics I want. But by the time you get to 0:07:47.400 --> 0:07:49.840 the eighties, none of these guys have ever done anything 0:07:50.000 --> 0:07:53.800 in the world, and they're like, yeah, fucking you know 0:07:53.840 --> 0:07:57.480 who's you know, who's a management guru? Helm with Van Moltka, 0:07:57.600 --> 0:07:59.600 that's a guy who knows how to run a company 0:07:59.600 --> 0:08:03.920 that makes light bulbs. The man who won the Franco 0:08:04.040 --> 0:08:08.240 Prussian war surely has wisdom for me in our plastics business. 0:08:09.040 --> 0:08:13.480 Like that's the most like fraternity sentence I've ever heard. 0:08:13.680 --> 0:08:17.080 It's very funny. It's it's it's seeped in it and 0:08:17.120 --> 0:08:18.960 again you could again you get. One of the other 0:08:19.000 --> 0:08:20.560 things you can tell is that like none of this 0:08:20.680 --> 0:08:23.400 generation of business leaders who are entrance by this stuff, 0:08:23.560 --> 0:08:25.360 not only were they like too young to fought in 0:08:25.360 --> 0:08:27.480 World War Two, but they were too rich to get 0:08:27.560 --> 0:08:31.520 drafted for Vietnam because like, nobody who fights in Vietnam 0:08:31.680 --> 0:08:34.920 is like generals, the guys who don't make mistakes. Yes, 0:08:35.000 --> 0:08:35.800 I understand. 0:08:36.240 --> 0:08:39.040 It's the It's like the eye of the hurricane saying 0:08:39.080 --> 0:08:41.199 like this is all right, this is fine. 0:08:41.480 --> 0:08:44.680 Yeah, let's uh, let's let's copy Let's what did west 0:08:44.800 --> 0:08:49.200 How would Westmoreland run ge? You know, let's defoliate the 0:08:49.360 --> 0:08:52.000 entire business, poison the office, kill everyone. 0:08:53.400 --> 0:08:57.680 I shall run this condom factory as if I tour Machiavelli. 0:08:59.160 --> 0:09:01.440 You don't need to, that's no need to. 0:09:02.040 --> 0:09:04.280 I do kind of want to write a management book 0:09:04.280 --> 0:09:06.720 that's like the Westmoreland Way, And it's just like the 0:09:06.960 --> 0:09:10.960 applying the lessons of the Vietnam War to corporate success. 0:09:12.320 --> 0:09:16.400 Yeah series, yeah, yeah, well why not? It could It 0:09:16.400 --> 0:09:19.160 could work. So this is something that's starting to be 0:09:19.240 --> 0:09:21.440 a big deal in the nineteen eighties. And I haven't 0:09:21.480 --> 0:09:25.599 found a copy of the articles in Fortune that inspired 0:09:25.679 --> 0:09:28.360 Jack Welch so much, but I did run across a 0:09:28.480 --> 0:09:31.640 very recent article in the Harvard Business Review. We'll be 0:09:31.679 --> 0:09:33.960 talking more about the Harvard Business Review a little later, 0:09:34.240 --> 0:09:36.880 written in the early nineteen nineties, which was kind of 0:09:36.920 --> 0:09:40.080 like the heyday for Jack Welch's CEO, that attempted to 0:09:40.200 --> 0:09:42.880 draw business lessons from one of the same generals featured 0:09:42.920 --> 0:09:45.559 in the Fortune article, a guy I mentioned a little earlier, 0:09:45.640 --> 0:09:50.120 Helmuth von Moltka. Now the article also quotes Jack Welch, 0:09:50.240 --> 0:09:52.720 which is, you know, interesting by this point in time 0:09:52.760 --> 0:09:56.199 ten years later, not only is he like reading articles 0:09:56.200 --> 0:09:59.199 about Prussian generals and their management tactics, but he's been 0:09:59.280 --> 0:10:04.680 added to the articles about Prussian generals and their management tactics. Quote. 0:10:05.000 --> 0:10:08.920 Moltke possessed two important characteristics that made him a superior strategist. 0:10:09.120 --> 0:10:11.760 The ability to understand the significance of events without being 0:10:11.760 --> 0:10:15.120 influenced by current opinion, changing attitudes, or his own prejudices 0:10:15.440 --> 0:10:17.640 and the ability to make decisions quickly and to take 0:10:17.640 --> 0:10:20.679 the indicated action without being deterred by a perceived danger. 0:10:21.040 --> 0:10:23.720 The two characteristics support each other and apply to managers 0:10:23.720 --> 0:10:27.560 and entrepreneurs as much as generals and national leaders. For example, 0:10:27.800 --> 0:10:31.880 General Electric CEO Jack Welchis said, strategy follows people. The 0:10:31.960 --> 0:10:36.080 right person leads to the right strategy. Now there's a 0:10:36.080 --> 0:10:40.079 lot that's funny about that. Well, yeah, it's I mean, 0:10:40.120 --> 0:10:43.880 first off, just nonsense. Like von Moltkett was not a 0:10:43.920 --> 0:10:48.520 great general because he was great at like I guess 0:10:48.559 --> 0:10:51.400 you could argue those were factors in his success. Another 0:10:51.440 --> 0:10:54.040 factor is that Germany developed a kind of steel that 0:10:54.080 --> 0:10:56.880 allowed them to make long range cannons that the French 0:10:57.000 --> 0:10:59.760 did not have, and so they were killed that extremely 0:11:00.040 --> 0:11:03.199 long range before they could close with their superior close 0:11:03.280 --> 0:11:07.000 in rifles. But like, you can't really translate that to 0:11:07.440 --> 0:11:10.839 ge strategy. Very well, that's what we need. 0:11:11.360 --> 0:11:15.080 Yeah, Also you get a very clear impression the Jaguaryalts 0:11:15.480 --> 0:11:17.600 definitely at some point in his life, like turned to 0:11:17.640 --> 0:11:20.480 his chauffeur, was like, you are my friend, You're my 0:11:20.559 --> 0:11:21.480 best friend. 0:11:21.520 --> 0:11:30.160 Like this guy, Yeah, yeah, yeah, Moltka you know again 0:11:30.480 --> 0:11:31.679 was a very good general. 0:11:32.280 --> 0:11:35.160 But it's also kind of worth noting that those who 0:11:35.320 --> 0:11:37.800 seeve On Maltica as a business guru should be aware 0:11:37.840 --> 0:11:41.200 that the men he trained, the generation of German commanders 0:11:41.240 --> 0:11:44.320 who like were raised up in kind of his heyday 0:11:44.520 --> 0:11:47.880 and like learned under him and were inspired by him, 0:11:48.080 --> 0:11:51.160 were the guys who all lost World War One, destroying 0:11:51.440 --> 0:11:53.640 the First Reich and much of Europe in the process. 0:11:53.840 --> 0:11:56.199 So keep that in mind as we discussed the legacy 0:11:56.240 --> 0:11:59.200 of Jack Welch, because oddly enough, the same thing is 0:11:59.240 --> 0:12:03.080 going to happen now. One of the things that Welch 0:12:03.120 --> 0:12:06.240 took from Moltka was the concept of total war. He 0:12:06.320 --> 0:12:08.920 saw the business equivalent of this as being willing to 0:12:08.960 --> 0:12:12.440 find profit wherever he could, even though things traditionally, even 0:12:12.440 --> 0:12:15.679 through things that were traditionally outside of GE's wheelhouse. When 0:12:15.679 --> 0:12:18.000 he delivered this wisdom in his big speech, the Wall 0:12:18.040 --> 0:12:21.880 Street analysts in the audience were baffled, because this is insane, right, 0:12:22.200 --> 0:12:23.920 Like people at the time were like, what the fuck 0:12:24.000 --> 0:12:27.160 is he talking about? Like this is not like total 0:12:27.200 --> 0:12:30.320 war means, I don't know, burning down villages and destroying 0:12:30.360 --> 0:12:32.680 crops that the enemy can gain no sucker on them. 0:12:32.840 --> 0:12:36.559 It doesn't mean like finding profit in every aspect of 0:12:36.600 --> 0:12:39.480 your business. That's just running a business. Like what you're 0:12:39.480 --> 0:12:41.240 saying is just warseship. 0:12:41.360 --> 0:12:44.000 Yeah, it sounds like you're saying, my new brilliant business 0:12:44.040 --> 0:12:45.880 plan is I want money. 0:12:46.160 --> 0:12:47.360 What if we made money? 0:12:47.840 --> 0:12:50.200 Money? Oh, but I really want money. 0:12:50.240 --> 0:12:52.040 Yeah. It's like it's like if you had a general 0:12:52.080 --> 0:12:53.880 come in. It was like, guys, guys, I got a 0:12:53.880 --> 0:12:55.839 new plan that's going to blow this whole war thing 0:12:55.840 --> 0:12:58.079 out of the water. What if we hear me out 0:12:58.080 --> 0:13:01.640 here kill the enemy. 0:13:00.559 --> 0:13:04.480 However we can anyway you can as long as Yeah. 0:13:05.160 --> 0:13:08.000 I love the idea of him seeing like a little 0:13:08.080 --> 0:13:11.880 kid with lemonade stands selling like fifty cent, you know, 0:13:12.040 --> 0:13:13.679 like cups of lemonade, and he's. 0:13:13.520 --> 0:13:17.120 Like that little piece of that son of of my mine. 0:13:17.800 --> 0:13:21.080 I could I will win all of commerce. Total war, 0:13:21.200 --> 0:13:23.840 this kid, Yeah, total war, this little son of a bitch. 0:13:24.200 --> 0:13:26.800 It's interesting. I read a book when I was a 0:13:26.840 --> 0:13:29.760 lot younger. You know, the show Band of Brothers was 0:13:30.000 --> 0:13:33.680 about an actual like military unit in the US Easy Company, 0:13:34.160 --> 0:13:35.960 I think in the eighty second Airborne. I read a 0:13:35.960 --> 0:13:39.800 book by like the unit commander who's the he's he's 0:13:39.840 --> 0:13:41.679 one of the characters in the in the show, but 0:13:41.720 --> 0:13:43.960 like by the actual guy. And there was like a 0:13:43.960 --> 0:13:45.720 point in it, a line in it where he was like, 0:13:45.920 --> 0:13:47.720 because I think he wrote it in like the eighties 0:13:47.800 --> 0:13:50.360 or nineties where he was like, I keep seeing people 0:13:50.360 --> 0:13:54.480 comparing like business to war and like using military metaphors 0:13:54.520 --> 0:13:56.440 to talk about how company should be run, and I 0:13:56.480 --> 0:13:59.160 find it will really off putting because like war is 0:13:59.240 --> 0:14:03.160 just like a hinged savagery and people shouldn't people shouldn't 0:14:03.160 --> 0:14:07.679 seek to emulate it in the other's fears of existence. Yeah, 0:14:07.840 --> 0:14:10.960 very fun. Jack Welch does not feel the same way. 0:14:11.559 --> 0:14:14.000 And I'm going to quote from The Man Who Broke 0:14:14.080 --> 0:14:16.120 Capitalism by David Gels again. 0:14:16.160 --> 0:14:16.400 Here. 0:14:17.160 --> 0:14:19.840 One analyst asked how the price for copper would impact 0:14:19.880 --> 0:14:22.360 earnings in the next quarter. What the hell difference will 0:14:22.400 --> 0:14:24.680 that make? Well, shot back, you should be asking me 0:14:24.720 --> 0:14:26.920 where I want to take the company. The speech was 0:14:26.920 --> 0:14:29.240 a flop. As the analysts filed out of the ballroom, 0:14:29.280 --> 0:14:31.560 one remarked, we don't know what the hell he's talking about, 0:14:31.800 --> 0:14:35.600 because they want to know, like, so, you know, what 0:14:35.640 --> 0:14:37.680 do you like, how is the business doing? How are 0:14:37.800 --> 0:14:40.840 like what strategy I have like the costs of different 0:14:40.880 --> 0:14:43.040 materials that we need gone up or down? You know, 0:14:43.840 --> 0:14:45.880 like how are how ours like how is how are 0:14:45.920 --> 0:14:49.920 our core like assets performing right now? And Welch is 0:14:49.960 --> 0:14:52.320 like fuck that, I'm going to talk about war. 0:14:52.800 --> 0:14:55.680 Right It's crazy? How like this type of thinking? Like 0:14:55.960 --> 0:14:58.760 any given day he could be like lotting the like, 0:14:58.880 --> 0:15:01.360 oh we got a we got to like short the 0:15:01.440 --> 0:15:05.600 system and create this like essentially new market that we 0:15:05.640 --> 0:15:09.200 can scam that's the new hotness. And then yeah, the 0:15:09.240 --> 0:15:12.600 next day he'll be like steady growth and like quality 0:15:12.680 --> 0:15:16.000 products are the thing to do. It's like, who knows 0:15:16.040 --> 0:15:18.960 what this guy's gonna He's just a child walking around 0:15:19.080 --> 0:15:21.000 pointing at this is the strategy, I think. 0:15:21.080 --> 0:15:23.200 Yeah, And you can feel him setting the template that 0:15:23.240 --> 0:15:25.520 I think a lot of modern CEOs follow, that is 0:15:25.680 --> 0:15:28.320 just your job is to be a figurehead and give 0:15:28.440 --> 0:15:33.400 speeches that are general about vision and direction and basically 0:15:33.520 --> 0:15:36.200 just demand that the number go up, like your main 0:15:36.360 --> 0:15:37.040 job is too. 0:15:37.320 --> 0:15:40.720 Yeah, and that's the like as a spoiler, where we're 0:15:40.720 --> 0:15:43.480 heading here is that he's kind of running a con 0:15:44.400 --> 0:15:47.760 and it's a successful con. It does make ge incredibly profitable, 0:15:48.000 --> 0:15:50.320 But the reason he can't talk to these guys about 0:15:50.360 --> 0:15:53.400 the business. Is that he wants to eliminate the business 0:15:53.440 --> 0:15:55.680 part of GE because that's getting in the way of 0:15:55.720 --> 0:16:00.200 making money. So today is the story of how he 0:16:00.200 --> 0:16:03.560 did that. The first big campaign that General Jack had 0:16:03.600 --> 0:16:06.200 to launch in order to remake GE in his image 0:16:06.480 --> 0:16:11.360 was what he himself described as a campaign against loyalty. Right, 0:16:11.560 --> 0:16:14.920 he declared war on the concept of loyalty within the company. 0:16:15.320 --> 0:16:19.000 He defined this, well, we're talking about that. He defined 0:16:19.040 --> 0:16:22.600 it as eliminating bureaucrats, but in reality, his layoffs were 0:16:22.600 --> 0:16:26.240 more or less agnostic to function or performance within the company. 0:16:26.480 --> 0:16:29.160 He fired good employees if they annoyed him. He once 0:16:29.240 --> 0:16:32.480 shut down an entire department dedicated to long term planning 0:16:32.760 --> 0:16:35.040 because long term planning isn't the kind of thing that 0:16:35.120 --> 0:16:38.000 leads to short term earnings. Soon it became known that 0:16:38.040 --> 0:16:40.480 the only way to advance under GE's new leader was 0:16:40.520 --> 0:16:43.480 to fire as many of your own employees as possible. 0:16:44.120 --> 0:16:46.520 True to his background as an angry man who never 0:16:46.600 --> 0:16:50.720 learned how to compromise or experience consequences, Jack managed mostly 0:16:50.800 --> 0:16:53.680 through screaming at people. There were some upsides to this. 0:16:53.840 --> 0:16:56.520 He legitimately knew his business very well, and he would 0:16:56.520 --> 0:16:58.800 tear his managers a new one if they didn't understand 0:16:58.840 --> 0:17:01.720 their business as well is he. But it also selected 0:17:01.720 --> 0:17:04.720 for people who would not question Jack and instead blindly 0:17:04.760 --> 0:17:08.800 followed his commands. In nineteen eighty GE had four hundred 0:17:08.840 --> 0:17:11.920 and eleven thousand employees. By the end of nineteen eighty two, 0:17:12.000 --> 0:17:14.960 it had fired almost nine percent of its workforce, starting 0:17:14.960 --> 0:17:17.920 with thirty five thousand employees and followed with thirty seven 0:17:17.960 --> 0:17:21.480 thousand the next year. Often this meant destroying the economy 0:17:21.480 --> 0:17:23.520 in small towns across the country. This is a part 0:17:23.560 --> 0:17:26.120 of the process of the hollowing out of Middle America. 0:17:26.720 --> 0:17:29.919 A good example would be Ontario, California, which had a 0:17:29.960 --> 0:17:33.119 steam iron plant that employed eight hundred and twenty five people. 0:17:33.400 --> 0:17:36.000 Though it was profitable, Jack closed it and fired them. 0:17:36.000 --> 0:17:36.280 All. 0:17:36.800 --> 0:17:39.560 Local civic leaders complained, but no one had the ability 0:17:39.600 --> 0:17:42.800 to do anything. The year before Jack took over ge 0:17:43.040 --> 0:17:45.879 net profits had risen by seven percent. It was the 0:17:45.960 --> 0:17:49.120 tenth most profitable business in the Fortune five hundred. These 0:17:49.160 --> 0:17:52.720 mass layofs were not necessary, but every Purge was met 0:17:52.720 --> 0:17:57.160 with a surgeon. Stock prices that benefited shareholders. Newsweek compared 0:17:57.160 --> 0:17:59.880 his strategy to the work of a neutron bomb, an 0:18:00.080 --> 0:18:03.239 nightmare WMD built to kill all living creatures in an 0:18:03.280 --> 0:18:06.840 area but leave infrastructure intact. They gave him the nickname 0:18:07.200 --> 0:18:08.200 neutron Jack. 0:18:08.640 --> 0:18:08.960 Cool. 0:18:09.520 --> 0:18:12.560 Yeah, yeah, yeah, and he hates. 0:18:12.480 --> 0:18:15.680 You mentioned Jack Donnie being based on him, also Jimmy Neutron, 0:18:15.720 --> 0:18:16.120 which I. 0:18:16.119 --> 0:18:20.480 Didn't yes exactly or it's heartening. 0:18:20.560 --> 0:18:23.040 I guess that people from Jump, or at least there 0:18:23.080 --> 0:18:26.040 was some coverage that was like, yeah, this is going 0:18:26.119 --> 0:18:27.000 to ruin everything. 0:18:27.280 --> 0:18:32.720 Yeah, he's destroying the destroying life. Yeah, he's killing life itself. 0:18:33.800 --> 0:18:35.720 But they were doing it both as like there was 0:18:35.760 --> 0:18:38.920 an element of criticism, but also like awe, and it's 0:18:38.960 --> 0:18:41.400 it's fun because like Jack would always claim to hate 0:18:41.400 --> 0:18:44.760 this nickname, and his autobiography he writes from the numbers, 0:18:44.800 --> 0:18:46.439 you could make the case that there was either a 0:18:46.480 --> 0:18:49.600 neutron Jack or a company with too many positions. I 0:18:49.720 --> 0:18:52.160 naturally took comfort in the latter, but the neutron tag 0:18:52.280 --> 0:18:55.240 still got me down. I was fortunate to find remarkable 0:18:55.240 --> 0:18:57.879 support that got me through at home, in the office, 0:18:57.920 --> 0:19:00.879 and in the boardroom. I'd come home obviously a little 0:19:00.920 --> 0:19:02.840 down from the experience. 0:19:03.280 --> 0:19:05.760 Because he thought he was like being called a nerd. 0:19:06.160 --> 0:19:09.480 Yeah, it made him. It made him so sad to 0:19:09.560 --> 0:19:12.800 be described as a weapon of mass destruction. And in 0:19:12.840 --> 0:19:16.399 his autobiography he credits his first wife, Carolyn is helping 0:19:16.480 --> 0:19:20.720 him through the dark like emotional period that this created. Carolyn, 0:19:20.840 --> 0:19:23.720 in Jack's book, is always supportive of him, no matter 0:19:23.760 --> 0:19:26.639 how tough the press or his job is. She always 0:19:26.720 --> 0:19:29.639 ended a conversation with Jack. You have to do what 0:19:29.680 --> 0:19:32.760 you think is right for everyone, which. 0:19:32.560 --> 0:19:35.080 Is how you know every single scene between them is 0:19:35.760 --> 0:19:39.119 nothing like that's just the pr story period. Yeah. 0:19:39.200 --> 0:19:41.480 Yeah, there's another way you can know that, which is 0:19:41.480 --> 0:19:45.480 that he divorces Carolyn in nineteen eighty seven, about five 0:19:45.560 --> 0:19:49.040 years after this point in his In his story, their 0:19:49.080 --> 0:19:52.359 divorce gets two paragraphs of mentioned in his autobiography. 0:19:52.400 --> 0:19:54.719 It's like we never spoke, but when we did it 0:19:54.760 --> 0:19:57.760 was great, very not controversial. Then we got divorced for 0:19:57.840 --> 0:19:58.359 no reason. 0:19:58.480 --> 0:20:01.040 Yes, she was my roster and then I left Derry. 0:20:01.080 --> 0:20:06.560 You know, the divorce was a forbidden topic by his employees. 0:20:06.640 --> 0:20:09.320 And there's there's very little you can actually find about 0:20:09.359 --> 0:20:12.000 this first divorce of his. One of the very few 0:20:12.119 --> 0:20:14.439 statements I found about it comes from a guy with 0:20:14.720 --> 0:20:18.680 the very funny name Dick McLean, which you know we 0:20:18.920 --> 0:20:20.000 all appreciate. 0:20:22.000 --> 0:20:25.080