Saturday, December 12, 2009

Immelt Wrong: Meanness & Greed Hardly Waning

It's sad to see how far the management bar fell in a decade. At one time corporations existed to provide jobs and quality products. That shifted to permanently growing quarterly profits and optimizing executive incentive pay.

Wall Street ditched quality while packaging loans, residential and commercial. They shifted risk elsewhere, yet made huge securitization fees. Risk management was replaced with obsessive greed.

GE's Jeff Immelt commented on the fall:

We are at the end of a difficult generation of business leadership, and maybe leadership in general. Tough-mindedness, a good trait, was replaced by meanness and greed, both terrible traits.

Rewards became perverted. The richest people made the most mistakes with the least accountability. In too many situations, leaders divided us instead of bringing us together.

America has abysmal leadership. It infects teak paneled, corporate board rooms and hallowed halls of government. The perverted cycle of rewards operates within and between the two bastions of power. Corporate money fuels political parties and their business forwarding candidates.

Government makes little anymore, preferring to act as a giant general contractor. It is a fractal of American firms, many who have no domestic manufacturing capabilities. No longer can our officials conduct a "make or buy" analysis. Government farms out huge contracts on an indefinite quantity, indefinite delivery basis.

Immelt's mean, greedy business managers aren't gone. They're standing in line for their turn on Uncle Sam's teat, just like Jeff.

The Obama administration wants to import business tactics to cure education. The President plans to reward teachers and doctors with "pay for performance." It too will pervert.  Jeff's mean, greedy leaders manipulated P4P, by backdating stock options on a widespread basis.

Immelt correctly described horrific leadership and its damning impact. He's dead wrong that it's ending.

Horrible practices continue in spades. Obama leads by bad example. He's full of populist rhetoric and corporatist implementation. I think Jeff did a fine imitation of the President with his speech.

Update: NYT columnist Bob Herbert provided data showing the error of Immelt's prediction.

Update 3-25-11:  GE and Jeff Immelt's greed continues (from EPJ).

Update 4-6-11:  Uncle Sam paid GE $36.6 million under the Early Retiree Reinsurance Program.  Despite making billions in profits, GE paid no federal taxes the last two years.

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