Power Failure audiobook cover - The Rise and Fall of an American Icon

Power Failure

The Rise and Fall of an American Icon

William D. Cohan

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Management & LeadershipEntrepreneurshipEconomics

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Power Failure
Evolution & Flexibility+
Financial Values & Risk+
Leadership Competence+
Culture of Dissent+
Incentives & Corruption+
Hubris & Rebuilding+

Quiz — Test Your Understanding

Question 1 of 6
According to the text, what major strategic shift contributed to General Electric transitioning from a nimble market leader to a 'lumbering dinosaur'?
  • A. It became overly dependent on its capital business and lost its flexibility.
  • B. It refused to invest in new technologies like aviation and 3D printing.
  • C. It spun off RCA and lost its monopoly in the radio market.
  • D. It decentralized its management structure too quickly in the early 2000s.
Question 2 of 6
How did Jack Welch's approach to finance differ from early GE leader Charles Albert Coffin's philosophy?
  • A. Welch refused to use the company's sprawling assets to balance out quarterly losses.
  • B. Welch relied heavily on risky short-term debt to finance profitable long-term loans through GE Capital.
  • C. Welch insisted on strictly conservative money management and avoided all short-term debt.
  • D. Welch decentralized the financial department to prevent executives from inflating asset values.
Question 3 of 6
What was identified as a key strategic mistake made by CEO Jeff Immelt leading up to the 2007-2008 financial crisis?
  • A. He sold off GE's highly profitable reinsurance business too early.
  • B. He refused to fire executives who were caught illegally colluding with competitors.
  • C. He decided to invest heavily in the subprime mortgage business and refused to sell off real estate interests.
  • D. He implemented a strict, centralized management system that stifled innovation in the aviation division.
Question 4 of 6
According to former executive Dave Calhoun, how did Jeff Immelt's leadership style negatively impact General Electric?
  • A. His refusal to tolerate dissent meant that underlying problems leading to GE's collapse went unaddressed.
  • B. His tendency to constantly change his mind caused widespread confusion among middle management.
  • C. His insistence on gritty, confrontational discussions created a toxic and hostile work environment.
  • D. His focus on flattery led him to promote external candidates over experienced internal executives.
Question 5 of 6
What was the unintended consequence of CEO Ralph Cordiner putting immense pressure on decentralized divisions to meet their numerical goals?
  • A. It caused the company to lose its focus on the appliance market and shift entirely to finance.
  • B. It created a culture of corruption where managers illegally colluded with competitors to fix prices.
  • C. It led to a massive employee strike that temporarily shut down GE's utility sector.
  • D. It forced managers to rely on cheap short-term debt to fund long-term research projects.
Question 6 of 6
What underlying cultural flaw did critics point to as a major contributor to General Electric's downfall?
  • A. A lack of ambition that caused the company to miss out on the tech boom.
  • B. A culture of hubris and invulnerability that led leaders to ignore appropriate safeguards.
  • C. An overreliance on government subsidies that masked the company's unprofitability.
  • D. An obsession with historical traditions that prevented the adoption of modern accounting practices.

Power Failure — Full Chapter Overview

Power Failure Summary & Overview

Power Failure (2022) details the rise and fall of General Electric – once a great success story of international business.  But its legacy went badly awry, as even casual consumers of business news will remember. Power Failure: The Rise and Fall of an American Icon (2022) gives a startlingly detailed account inside the behemoth corporation, examining what went right – and then wrong.

Who Should Listen to Power Failure?

  • Anyone interested in the inside workings of business
  • Leaders who want to learn from the experience of CEOs going through difficult times 
  • Employees who want to better understand the forces at play inside the companies that dictate their future

About the Author: William D. Cohan

William D. Cohan is a veteran of the financial industry and a former GE employee. His other New York Times bestselling books include The Last Tycoons: The Secret History of Lazard Frères and Co. (2007), House of Cards: A Tale of Hubris and Wretched Excess on Wall Street (2009); Money and Power: How Goldman Sachs Came to Rule the World (2011); and The Price of Silence: The Duke Lacrosse Scandal, the Power of the Elite, and the Corruption of Our Great Universities (2014). 

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