Young and Profiting with Hala Taha - William Cohan: The Rise and Fall of America’s Most Iconic Company, General Electric | Business E243

Starting point is 00:00:00 Yeah, fam, as you know, we are big believers on this podcast about learning from the trials and tribulations of entrepreneurs, executives, and companies that have come before us. Sometimes those leaders are up-and-coming influencers, sometimes they are giants in their field. And sometimes they are larger-than-life figures from history, like Thomas Edison and Jack Welch, whose lives and careers offer us a host of lessons that are still relevant to us today. My guest today is going to take us through some of those stories and much more. William Cohen has worked as an investment banker on Wall Street. He's been a financial writer for the Vanity Fair, The New York Times, and Bloomberg. He's the author of multiple New York Times bestselling books and is one of the co-founders of the new media company, Puck.

Starting point is 00:00:53 Along the way, William has become one of the world's premier financial journalists. His most recent book, Power Failure, is a fascinating look at the rise and fall of one of the most influential companies in history, General Electric. William, welcome to Young and Profiting Podcast. Thank you for having me, Hala. It's great to be here. I'm excited for this interview. And before we get into GE and Jack Welch and so much more,

Starting point is 00:01:17 I really think there's a lot that our listeners can learn from when it comes to your own backstory and career. And so let's start here. You've changed course several times in your career. I'm always interested to hear about those pivots. And early on, you got your degree from the Columbia School of Journalism. and you got your big first break as an investigative reporter for a newspaper in Raleigh, North Carolina in the early 80s. Can you talk to us about what you were doing there and what made you decide to ultimately pursue a career on Wall Street instead later on?

Starting point is 00:01:49 Sure. So after graduating from a journalism school, I had done my thesis at Columbia on the public schools in Harlem in the early 80s. and I think it was the first time ever that a journalist had been allowed into those public schools. And so I spent time at what seemed to be one of the best schools in the Central Harlem School District and in one of the worst schools in the Central Harlem School District and tried to figure out why one was working and one wasn't. And then I had gone to Duke, so I returned to North Carolina. and somehow, by some miracle, I got hired at the Raleigh Times in Raleigh, North Carolina, to cover public schools in Wake County.

Starting point is 00:02:38 I did that for two years, one investigative reporting awards statewide in North Carolina, one for getting the Wake County School superintendent, a guy named Walter Marks, who was misusing federal Chapter 1 funds, and then lying about it, essentially trying to cover it up. So wrote stories about that. He ultimately got fired and then wrote a story about how the school system was paying for kids to ride to school in taxi cabs, believe it or not, students who didn't even exist. So that was sort of a scam with the taxi cab companies in Wake County.

Starting point is 00:03:23 Anyway, both of those things occurred in two years that I was there. One, investigative reporting awards for both of them. And, you know, my father always thought it was important for me to go to business school. I didn't really want to go, but, you know, as a history major, I was enjoying being a reporter, but I wasn't making very much money, in fact, very, very little. And, you know, it was enough for a single guy to live on, but it wasn't going to be enough to support a real career. I never understood, in fact, why journalists get paid so poorly, but that's another topic. So I really wanted to get a job at the Wall Street Journal,

Starting point is 00:04:05 which is something I hoped to do leaving journalism school, and that didn't happen. And so I thought, well, if I have a journalism degree, investigative reporting awards, and I've got an MBA from Columbia, the journal will have to hire me. So that's why I went back to business school. And of course, the journal did not hire me. So that plan got scuttled. And so you ended up going and becoming an investment banker, which at the time was like a super hot career,

Starting point is 00:04:36 sort of like everybody trying to get into AI now. So how did you actually get into Wall Street and become an investment banker? What was that transition like, considering you didn't really have experience other than your MBA? Well, there's a fortuitous series of events because when I graduated from Columbia with an MBA in May of 1987, literally all you had to do was be able to breathe to get a job on Wall Street. You may, well, you're probably too young, but in October of 1987, the market crashed 22.6% in one day.

Starting point is 00:05:12 and after that, things slowed down considerably. But when I got hired in May, you know, things were booming on Wall Street, so they needed bodies. I was a freshly minted MBA. And so I didn't have a clue what I was doing, of course, but that just goes to show you that they were hiring MBAs sort of with abandon. And again, you know, as I mentioned, really wanted to get a job at the Wall Street Journal. And I I managed to finagle interview with the National News Editor at the Journal when they were down. That was when they were down still at the World Financial Center in Manhattan, near where 9-11 occurred. And I got into the guy's office, and he looked at me like I had 27 heads. And he basically said, what are you doing here in my office? And I said, well, I really want to get a job at the Wall Street Journal. I really want a job here. I'm here to get a job.

Starting point is 00:06:09 And he said, well, you can forget that. we have a hiring freeze on. And even if we didn't have a hiring freeze on, I got my eye on this guy from Fortune and that guy from Forbes. So forget you. I said, well, I'm going to either go to Wall Street or the Wall Street Journal. You know, it's your choice. And he said, goodbye. So at that point, I sort of reconnected with the Wall Street hiring practice at Columbia and ended up deciding to go. to GE Capital, where I was hired to finance-leveraged buyouts of all things. That'll give you just sort of some idea of how wacky things were back then, because, you know, I had no experience, as you pointed out, other than my MBA. So zero experience. And let's be frank, I wasn't the

Starting point is 00:07:03 greatest student at Columbia. I was selected to be the class speaker, no doubt because of my charming personality, but I was not a great student. Even though I come from a long line of accountants in Massachusetts, I had no idea what accounting was all about or finance. I did get my degree, but when I went to GE Capital to quote unquote finance leverage buyouts, that'll just show you how crazy things were that I was hired to do that without any background or knowledge of what I was doing whatsoever. Yeah, that is really crazy. And then you ended up basically making your rounds around Wall Street. You went to Lazard, Merrill Lynch, and J.P. Morgan.

Starting point is 00:07:45 What were some of the aspects of the different companies that you liked and disliked when you went to those different companies? What were they all like? Well, I mean, I wrote my first book about Lazzard, so I was totally infatuated by Lazzard. You know, they didn't recruit, unlike everybody else, Goldman, Solomon, First Boston, whatever, that recruited on campus and MBAs, Lazzard didn't. So you had to know someone to get an interview there. and when I was at Columbia, I managed to finagle an interview, and I interviewed with two partners,

Starting point is 00:08:18 Holly Wombald and Jonathan Kagan, and they never even sent me a ding letter, which is what you get when they're rejecting you. They just ignored me. They just ghosted me. So that made me want to work there all the more. And then two years later, after I'd spent two years at GE Capital, I got another chance to go there. And this time, they did hire me. And I was the only associate high. hired that year. They didn't have an HR department, so I wasn't welcomed with open arms. They weren't, you know, like, here's what you're going to do. I'm so glad you're here. It was like, okay, here's an office, sit in the office. And I think it was like four months before I did anything of any substance. So it was a crazy place. I mean, at that point, it was a private partnership.

Starting point is 00:08:59 It was literally a firm that was punching above its weight on a regular basis. It worked on all the best deals and without really trying too hard. And there were, you know, amazing people who worked there, and, you know, which is, of course, why I decided to write my first book about Lassard many years later. But it was also a very frustrating place to work and politics were quite Byzantine, Soviet-like. And, you know, I probably wasn't the greatest navigating all of that. And so after about six years there, I got recruited away to go to Merrill Lynch. That was the total polar opposite. It was corporate.

Starting point is 00:09:41 It was a public company. It was very big. Lazzard was very small. I couldn't figure out the politics there either. And then got recruited away to what is now at JPMorgan Chase. But I went from being an associate at Luzard to a managing director at Javie Mourning Chase. running the media and teletham

Starting point is 00:10:01 M&A group before January 2004 when I got summarily fired again for breathing. So I guess I got hired for being able to breathe and then I got fired for being able to breathe. So there you go.

Starting point is 00:10:17 And so you ended up transitioning back into writing and that was after 17 years. It's not like you just spent a few years on Wall Street. It was a long time, a whole career that you spent. So what was you're thinking like back then, why did you decide to pivot back into writing, especially when you know that it's really hard to make a fruitful career out of that? Desperation, Hala, desperation.

Starting point is 00:10:42 I was fired again through literally no fault of my own, never got a good explanation, treated horrifically, absolutely horrifically. I wouldn't wish it on anybody. And I had two young sons. My wife was working, and basically not only did J.B. Morgan Chase fire me, they also blackballed me from the industry so that I couldn't get another job working on Wall Street. And they did that repeatedly and without the slightest bit of remorse or concern. And I thought, well, what can I do that is within my own control, who I don't have to worry and worry. wait, you know, who's going to finally decide to hire me or not. I need to get control of my own life. I can't put my career in the hands of other people anymore. I just cannot do it. I did that,

Starting point is 00:11:41 and I'd had quite enough of that taste. And so, ironically, it was my journalism that I could fall back on. And, you know, I didn't have a job on a paper or a magazine or anything, but I could write a book. I mean, I had this crazy idea that I'll just start by writing a book and I'll write a book about Luzard. I'll write a proposal and I'll see if anybody will buy it. I got an agent. The agent shopped the proposal. I wrote a hundred-page proposal about Luzard. They didn't know. I hadn't taken a single note. It's not like I had planned to do that or anything. And, I did some research. I wrote this proposal, and lo and behold, it got bought by Doubleday, which is part of Penguin Random House. And so spent the next two years reporting and researching

Starting point is 00:12:34 and writing the book. It got published in 2007. And incredibly, not only was it a New York Times bestseller, which was incredible enough, but then it got named the 2007 Financial Times, Goldman Sachs business book of the year, you know, beating out Alan Greenspan's book, beating out the Black Swan by Nassim Taleb. And basically that was obviously a very lucky break and put me on the map. And next thing you know, I'm getting called by the New York Times to write op-eds. Greaten Carter called me up, did I want to write for Vanity Fair? And the rest is history at that point. I love this part of your story because I actually don't think it was luck. I think it was a lot of experience because what you had different from all the other writers in your niche is that you actually had 17 years of industry experience.

Starting point is 00:13:28 And a lot of the books that you write, correct me if I'm wrong, really intersect with your professional and personal experiences. There are other great writers who spent time on Wall Street like Michael Lewis and Bethany McLean. But no one, you know, they were like in and out after a couple of years. I mean, I spent 17 years, and I never even thought for a second that I'd go back to writing. It was only through the kindness of my bosses at J.B. Morgan Chase, who defenestrated me that I got to think about what I wanted to do. So sometimes I've thought about dedicating one of my books to my former bosses at J.B. Morgan Chase, who got me fired. But yes, I mean, the good news is I do really understand how Wall Street works. There's no question. I understand pretty much all aspects of it

Starting point is 00:14:23 at this point. I understand what the risks are. I don't understand. I mean, I wrote a book called Why Wall Street Matters because I thought that politicians and others were just victimizing Wall Street after the 2008 financial crisis. And I thought, you know, we needed to like hold on a minute here and just remember what's good about Wall Street. So, I mean, I was willing to see the other side of how things work and why it's such an important part of the global economy. I mean, because it just frankly is. So yes, I mean, I've written five books, I guess, a book about Lizarre, a book about Goldman, a book about Bear Stearns, the Why Wall Street Matters, and a book about GE, all sort of about business or corporate, you know, or Wall Street type situations. And I think

Starting point is 00:15:12 it gives me a real insight, a real authority, which is important, sort of like somebody who's been a politician writing about politics. It's really hard to spin me or hoodwink me or lead me on. I mean, I know the questions ask and I know when you're bullshitting me and I won't be bullshad upon. And I'm going to tell it like it is. I'm absolutely going to get to the bottom of whatever it is I'm writing about, and I will not ever compromise or give up until I get to the bottom of it. So I think that is an advantage. There are very few things about Wall Street that I don't understand at this point, so I can really, I think, cut through a lot of the crap and get to what I think is important, and also write a story that I think people will want to read. So I also

Starting point is 00:16:08 try to write books that I like reading. Yeah, and we talk about skill stacking a lot on the podcast, and you're somebody who seems to have really leaned into your skill stack, starting with journalism, then working on Wall Street, then putting it all together and becoming an author of those types of books and even having the skills of actually working at the companies that you write about. So it's really interesting what you do. Let's talk about your rejection and termination at this company.

Starting point is 00:16:35 For other people who may have been laid off, terminated unfairly, and they're looking to make a career transition or pivot, what would be your advice to them in terms of how to deal with rejection and how to sort of move on to something else more positive? Yeah, this kind of rejection is very lonely. So therefore, that's a good prelude to writing because writing is also very lonely. And look, there's no way around it. It absolutely sucks. And it's completely unanticipated, completely unfair, ruthless, heartless. Then again, as I said, you know, starting again, being forced into figuring out what to do next when I was 44 years old is extremely challenging and distressing, especially when you have two

Starting point is 00:17:22 young kids who, you know, are wondering what the hell you're doing at home suddenly. But it, you know, when you sort of hit rock bottom and you begin to think, well, what can I do or I can get total control of my life so that this never can happen to me again. I never, ever want to ever again be at the whim of some asshole boss who can just unilaterally decide whether or not you're going to get fired or not because you're not in the room where those decisions are getting made. Now, that was never going to happen to me again. And so even if I were to get canceled now, even if I could never write another book, I don't care. I'm fine. I'll be fine. I can do what I want. And I've saved enough. I've invested well enough. I worked hard on my reputation and in my skills. And that's what's important

Starting point is 00:18:15 to me now. And the reason I left Fannie Farrer to start Puck is because the writers were given equity in Puck. And I'm a founding partner with equity. And just like I said at the beginning, I never understood why reporters get paid so little, why they never had equity. Well, this is a totally new model where we have equity. We are the content creators. We are the people who are building this company. And if it works out, we will be the ones who benefit from it. And that's the way it should be. And I've been fighting for equity, for writers. You know, I have equity in my books, but I don't I have equity in my non-book journalism until with Puck. And this is something that I helped create and feel very strongly about and been fighting for

Starting point is 00:19:07 since I was a cub reporter at the Raleigh Times in 1983. At Yapp, we have a super unique company culture. We're all about obsessive excellence. We even call ourselves scrappy hustlers. And I'm really picky when it comes to my employees. My team is growing every day. We're 60 people all over the world. and when it comes to hiring, I no longer feel overwhelmed by finding that perfect candidate,

Starting point is 00:19:32 even though I'm so picky because when it comes to hiring, Indeed is all you need. Stop struggling to get your job post noticed. Indeed, sponsored jobs help you stand out and hire fast by boosting your post to the top relevant candidates. Sponsored jobs on Indeed get 45% more applications than non-sponsored ones according to Indeed data worldwide. I'm so glad I found Indeed when I did because hiring is so much easier now. In fact, in the minute we've been talking, 23 hires were made on Indeed, according to Indeed data worldwide. Plus, there's no subscriptions or long-term contracts. You literally just pay for your results.

Starting point is 00:20:05 You pay for the people that you hire. There's no need to wait any longer. Speed up your hiring right now with Indeed. And listeners of this show will get a $75-sponsored job credit to get your jobs more visibility at Indeed.com. Just go to Indeed.com slash profiting right now and support our show by saying you heard about Indeed on this podcast. Indeed.com slash profiting.

Starting point is 00:20:25 Terms and conditions apply. hiring indeed is all you need. Hello, Yap, gang. I know my young and profiting listeners want bigger businesses and a better life, and the New Year is the perfect moment to reset and commit to your growth. But let's be real, you can't build an empire if your finances are all over the place. That's why getting into it QuickBooks is one of the best first moves you can make this year. They've got powerful money management tools built right into their platform,

Starting point is 00:20:53 and they have them for every stage of your business, whether you're a solopreneur or a small business. And I love that QuickBooks helps you get paid faster, pay bill smarter, and even gives you access to funding when opportunity pops up. So QuickBooks can help you with bookkeeping, can help you with getting paid, can even help you with projections and understanding where your business is at financially. Plus, QuickBooks Money Solutions reduces manual work by half and keeps your money and your books perfectly synced. That means less time staring at spreadsheets and more time actually building the vision that you started with. That's the upgrade that every profiting entrepreneur needs. Start the New Year's strong, take control of your cash flow with QuickBooks Money Tools.

Starting point is 00:21:32 Learn more at quickbooks.com slash money. Again, that's quickbooks.com slash money. Terms apply. Money movement services are provided by Intuit Payments Incorporated, licensed as a money transmitter by the New York State Department of Financial Services. It's really cool. And I think another big lesson from your story is that you're never too old to make a career change. My podcast is called Young and Profiting, but I actually have a lot of 40-year-olds and even 50 and 60 year olds that listen to my show. And I want them to know, like, you're never too old to make a career pivot. Because look at you.

Starting point is 00:22:03 You changed your career basically at 44. Everybody knows your name. You're like a very famous author. So it's like, thank God you got rejected and had your back against the wall and basically created this unique path that is only yours. Nobody could replicate this. I think that's what's special is that nobody can really replicate you now because you're putting all these different skills.

Starting point is 00:22:25 together and offering something unique? I just completely agree with that. I mean, some people who I've written about who don't like me have called me a thrice failed investment banker to try to grind me a little bit. I mean, it's true. I was good enough, investment banker. I mean, I don't think you have to have a great amount of talent to be investment banker. You have to have incredible political skills. you have to be able to navigate your way year in and year out through that crazy puzzle that is Wall Street, the ultimate zero-sum game. This used to be said at Lazard. It's not enough for you to succeed. Others have to fail. I mean, if I hadn't gotten fired, then I wouldn't be a writer today. There's no doubt about it because, as I said about Invisabanking, it's good one day a year.

Starting point is 00:23:15 but that one day a year is enough to sustain you for the other 364 days. Because, you know, you can't get paid pretty much doing anything else without risking your own money. They'd like you can get paid on Wall Street, even if compensation has come down in the last few years. But I don't care about that. What I care about is telling stories that I want to tell. I want to have total control over what I do. I do not want to have a boss. I do not want somebody else telling me what I can and can't do.

Starting point is 00:23:51 I don't want somebody else deciding whether I will have a job or won't have a job. If I'm not, my political skills are off compared to what that person wanted or wants. That is just repulsive to me in every way. And, you know, I managed to carve out in the last 20 years, nearly 20 years, at career starting at 44, where I have pretty much total control every day over what I do all day, every day. I mean, and I can be where I want. I can do what I want. If I want to go on vacation, I can go on vacation. If I don't, if I want to work while I'm on vacation, I can. If I want to stop work at noon every day, I can. That's a life. It's a great, you know, it's a great life.

Starting point is 00:24:36 Okay, let's talk about your latest book about GE. What was the genesis of this book? As I mentioned, I had worked there in my first two years after business school, so I had a sense of the place. Obviously, it was one of the great American companies, led by many great leaders, but including Jack Welch. And so he was a legendary figure. I knew him a little bit, and he had housed around the corner from me here in Antucket, and I was able to interview him many times before his death. And so a combination of that and the CEO of GE that followed Jeff Immolt, who followed Jack, a guy named John Flannery, was somebody I had started with at GE Capital.

Starting point is 00:25:22 We shared an office together and is a longtime friend of mine. So it just seemed like how this company went from being the most valuable, most respected company on the planet to being more of an afterthought, you know, not particularly relevant anymore. I mean, it's still more than $100 billion company, so it's not nothing, but it's not what it once was. And I thought, you know, I wanted to tell that story because I had worked there and I knew Jack and I knew John. And I spent a lot of time with Jeff Emmett and others too. And I just, I love nothing better than sort of taking a blank sheet of paper and starting at the beginning of a tale and just telling it from beginning to end without any preconceived notions, just letting the, reporting take me away and into this story. And I think that's what I did here in this book.

Starting point is 00:26:19 Yeah. And something that was interesting is that you focused a lot about the early history in the book. And I'd love to uncover that a bit. Tell us about the origins of GE. A lot of people think that it started with Thomas Edison. And I thought it started with Thomas Edison, too, because that's, of course, what GE wants you to believe. And why not? Who wouldn't want to have their company start? by Thomas Edison, especially in 1892, and have it still be going. But, you know, fortunately, that's not the whole truth. It was formed by a merger between two companies, one of which was Thomas Edison's company called Edison General Electric. But in 1892, by the time that that merger took place, Edison was not even the CEO. There was basically an investment banker, who was the CEO, and J.P. Morgan,

Starting point is 00:27:08 the man was the principal owner of the company. Thomas Edison had pretty much checked out and moved on to another project, something to do with like a limestone quarry in New Jersey or something. And then they merged it with another company, the Thompson Houston Company, that was owned by a guy named Charles Coffin in and around Boston. Edison General Electric was based in New York City. Thompson Houston was based in Lynn, Massachusetts. And so the merger took place because J.P. Morgan, the man, and Charles Coffin's venture capital

Starting point is 00:27:45 backers in Boston wanted the company to be merged. And Thompson Houston was about the same size in terms of revenue as Edison General Electric, but it was much more profitable. So it's no surprise that they wanted Charles Coffin to run the combined company. And that happened in 1892. And then, ironically, in 1893, there was a financial crisis, a big-time financial crisis, like what we had in 2008. And this General Electric almost went into bankruptcy because it had like 10 million of debt that it couldn't make payments on. And ultimately, the reason it did not go into bankruptcy was because J.P. Morgan, the man, agreed to allow the debt to be bought back at a discount. and retire it.

Starting point is 00:28:34 And for the next 70, 80 years, GE had a fortress balance sheet, AAA credit rating, and that only began to fall apart as GE Capital got bigger and bigger and bigger and more profitable and riskier. So a lot of my listeners might not have known GE

Starting point is 00:28:56 as the powerful company it once was. It was basically a pioneer for bringing electricity to the map, So a couple questions around this. First of all, talk to us about how big of a superpower GE once was. Then also talk to us about electricity and what that was like in terms of was it adopted fast? Was it a slow ramp up? Maybe can you compare that to a technology of today? GE was a technological pioneer without question. I mean, whether it was jet engines, x-rays, electricity, electrical generation, light bulbs. we take so many of the things that GE pioneered for granted today. I mean, it was sort of like

Starting point is 00:29:39 Google, Apple, Microsoft, all rolled up into one. And as I said, it was the most respected company. It was the most powerful company in the world. It was the most valuable company in the world. You know, what if Apple, which is worth more than $3 trillion, suddenly was worth $100 billion again? I mean, it would not be nothing, but you'd wonder what the hell happened. And so it was a very, very important technological company and a leader in many, many industries. Obviously, we completely take electricity for granted, but it was, no pun intended. I'd rather shocking development when it came along. And Edison was, of course, one of the pioneers in the creation of the generation of electricity.

Starting point is 00:30:30 and the adoption was slow because people were very wary of it. I mean, everything happened so quickly today, but like the internet was, the adoption of the internet was relatively slow. And now, again, we take it for granted, and it has improved our lives immeasurably. And I think it's sort of like that in that way. I mean, obviously, electricity has improved our lives immeasurably.

Starting point is 00:30:55 And it was an incredible discovery. I mean, we went from essentially, you know, whale oil or candle, to being able to flip a switch and having a light go on, you know, at all hours of the day. But it was dangerous. I mean, you know, early adopters, things blew up. There were fires. And, you know, if somebody who's an early adopter of electricity, you know, their house burns down or their business burns down. And that sends quite a message to everybody else. And so, you know, you begin to think twice about whether or not you want to do that. But, you know, I don't know if you watched, I think it was a... HBO, silly HBO show called The Gilded Age. But, you know, in one of the early episodes of the

Starting point is 00:31:36 Gilded Age, they all assembled in downtown Manhattan because they were going to sort of electrify, Edison was going to electrify City Block. And it became a huge event. And he flipped the switch, and the whole block was electrified down by City Hall in New York now. And, you know, that was a huge event. I mean, that was, you know, front page news. And slowly but shortly, it got. adopted from there. You know, the earliest subway systems in Manhattan were electrified, thanks to Edison and Edison General Electric. And obviously, electricity became, and still remains, more than 100 years later, incredibly important to our society and societies around the world. So one of the most incredible technological discoveries of all time. And I'm curious,

Starting point is 00:32:30 GE, like you said, was this huge company. They had lots of different areas of business, electricity. They were doing like stuff for war, airplanes and stuff like this. Do you think other companies are like that today in terms of being such a large company that does so many different things? I think the only company I can think of is like Microsoft right now. That really does a lot of different things. Well, GE was what was obviously known as a conglomerate.

Starting point is 00:32:58 There was an era of conglomerates. The conglomerate era is pretty much over now that GE is splitting itself up into three companies and basically sold off the rest of it. There are a few lingering conglomerates. Danaher is a publicly traded conglomerate that the current GE CEO, Larry Kulp, actually worked at as the CEO once upon a time. There are other, you know, Berkshire Hathaway. I mean, you could, it's more of a holding company, but it's clearly a conglomerate.

Starting point is 00:33:32 There are a few left. Nobody talks about conglomerates anymore, but there are a few left. You know, Alphabet slash Google, Apple, Microsoft. I mean, these are huge, powerful companies, and they do a lot of different things. I mean, Amazon does a lot of different things, right? It's the number one cloud computing company, and people don't even realize that. they think that's where they go to get their books and their detergent. But, you know, it makes probably more money from cloud computing than anything else.

Starting point is 00:34:04 So I think there was a time on Wall Street when conglomerates were very much in fashion and investment managers felt they needed to own them. GE was a bellwether on Wall Street, AAA-rated company in the Dow Jones Industrial Average. I mean, Jack Welch was a master at... romancing the Wall Street research analysts as well as the media, I think, you know, those days are over. But when those days were primo, there was nobody better than Jack Welch, making GE really sexy and something that investors had to own. What's up, young and profitors. I remember when I first started Yap, I used to dread missing

Starting point is 00:34:51 important calls. I remember I lost a huge potential partnership because the follow-up thread got completely lost in my messy communication system. Well, This year, I'm focused on not missing any opportunities. And that starts with your business communications. A missed call is money and growth out the door. That's why today's episode is brought to you by Quo, spelled QUO, the smarter way to run your business communications. Quo is the number one rated business phone system on G2, and it works right from an

Starting point is 00:35:17 app on your phone or computer. The way Quo works is magic for team alignment. Your whole team can handle calls and text from one shared number, and everyone sees the full conversation. It's like having access to a shared email inbox. but on a phone. And also, Quo's AI can even qualify leads or respond after hours, ensuring your business stays responsive even when you finally logged off. It makes doing business so much easier. Make this the year where no opportunity and no customer slips away. Try Quo for free plus get 20%

Starting point is 00:35:46 off your first six months when you go to Quo.com slash profiting. That's QUO.com slash profiting. Quo. No missed calls, no missed customers. Happy New Year, Yap, gang. I just love the unique. energy of the new year. It's all about fresh starts. And fresh starts not only feel possible, but also feel encouraged. And if you've been thinking about starting a business, this is your sign. There's no better time than right now. 2026 can be the year that you build something that is truly yours, the year where you take control over your career. And it starts with Shopify. I've built plenty of my own businesses on Shopify, including my LinkedIn Secrets Masterclass.

Starting point is 00:36:26 So it's a two-day workshop. People buy their tickets on Shopify. And then my mastermind subscription is also on Shopify. I built my site quickly in just a couple of days, payments were set up super easily, and none of the technical stuff slowed me down like it usually does because Shopify is just so intuitive. And this choice of using Shopify helped me scale my masterclass to over $500,000 in revenue in our first year. And I'm launching some new podcast courses and can't wait to launch them on Shopify. Shopify gives you everything you need to sell online and in person, just like the millions of entrepreneurs that they power. You can build your dream story using hundreds of beautiful templates and set up as fast with built-in AI tools that help you write product descriptions

Starting point is 00:37:07 and edit photos. Plus, marketing is built in so you can create email and social campaigns easily. And as you grow, Shopify can scale right along with your business. In 2026, stop waiting and start selling with Shopify. Sign up for your $1 per month trial and start selling today at Shopify.com slash profiting. Go to Shopify.com. profiting. That's Shopify.com slash profiting. Yeah, fam, hear your first. This new year was Shopify by your side.

Starting point is 00:37:40 Young and profitors. I know there's so many people tuning in right now that end their workday wondering why certain tasks take forever, why they're procrastinating certain things, why they don't feel confident in their work, why they feel drained and frustrated and unfulfilled. But here's the thing you need to know. It's not a character flaw that you're feeling this way. It's actually your natural why. And here's the thing. When it comes to burnout, it's really about the type of work that you're doing.

Starting point is 00:38:07 Some work gives you energy and some work simply drains you. So it's key to understand your six types of working genius. The working genius assessment or the six types of working genius framework was created by Patrick Lensione and he's a business influencer and author. And the working genius framework helps you identify what you're actually built for and the work that you're not. Now, let me tell you a story. Before I uncovered my work, working genius, which is galvanizing and invention. So I like to rally people and I like to invent new things. I used to be really shameful and had a lot of guilt around the fact that I didn't like enablement, which is one of my working frustrations. So I actually don't like to support people

Starting point is 00:38:46 one-on-one. I don't like it when people slow me down. I don't like handholding. I like to move fast, invent, rally people inspire. But what I do need to do is ensure that somebody else can fill that enablement role, which I do have, Kate on my team. So working genius helps you uncover these genius gaps, helps you work better with your team, helps you reduce friction, helps you collaborate better, understand why people are the way that they are. It's helped me restructure my team, put people in the spots that they're going to really excel, and it's also helped me in hiring. Working Genius is absolutely amazing. I'm obsessed with this model. So if you guys want to take the Working Genius assessment and get 20% off, you can use code profiting. Go to workinggenius.com.

Starting point is 00:39:23 Again, that's working genius.com. Stop guessing. Start working in your genius. Well, this is a perfect transition to start talking about Jack Welch. So I started this podcast in 2018, and for two years I was trying to get Jack on the show before he passed away. I didn't get the chance, but now I've got you on the show. You've spent a lot of time with Jack. So this is sort of like the next best thing for our listeners at Young and Profiting to get to know Jack. So you met him in Nantucket, like you were mentioning. And I think you met him several times.

Starting point is 00:39:52 Can you tell us about your first interaction with him? Sure. I mean, I knew he was, obviously, because I had worked there. And, of course, everybody knew who Jack Welch was. He was a legendary CEO. But, you know, he lived around the corner from me here. And once I decided that I was going to see if I could write this book, you know, which, as you alluded to, I mean, going back to 1892, even though Luzard was founded in 1848, making it. 50 years older than GE, you know, it was like a big nothing for many years. So, I mean, GE started off

Starting point is 00:40:35 is a very important company. The founder of electricity, it basically was public from the outset. So there was a lot of history to sort of uncover and mine and synthesize and distill. So I thought, well, I mean, if I'm going to do this, I've got to talk to Jack. He pretty much readily agreed to talk to me, and I don't know whether it was because we lived around the corner from each other or whatever. I don't know, or I guess I'd worked at G Capital or maybe because of my reputation is a writer and a former banker, but he agreed to, and then we just started right in on conversations first starting at the Nantucket Golf Club. You know, he's a big golfer. You know, we had lunch and on the verand, I'll never forget.

Starting point is 00:41:23 And even, even, you know, before I could sit down, he couldn't get out of his mouth fast enough how, and in much more colorful language than I'll use here, how disappointed he was with his selection of his successor, Jeff Immelt, and how he thought Jeff Immelt had ruined GE. So interesting. And as soon as he said that, I knew that I was off to the races

Starting point is 00:41:47 and something special was underway. You had a juicy story to uncover. So let's talk about Jack's leadership style. So based on what I read, he really played by his own rules when he first started his career at GE. Because essentially he started from the bottom and worked his way up to become the CEO eventually. And so his successes and his failures were celebrated. His bad behaviors were overlooked. Why do you think he could pull that off?

Starting point is 00:42:14 Skill. he had fabulous people skills. He had great IQ, great EQ, great political skills. Again, I mean, to get to the top of GE, I mean, requires unbelievable political skills. And he had them. But he also had accomplished unbelievable things along the way. I mean, he basically commercialized GE's discoveries in plastic pellets. And he was head of the plastics division up in Pittsfield Mass and created his own little fiefdom up there. And he just gave great presentations. He had great communication skills. He was able to set budgets and exceed the budget that he had set for himself and his division, you know, year after year. And then when he was

Starting point is 00:43:08 given more and more responsibility, he excelled during that phase too. So, I mean, what more can you ask for? And then when it came time for him to compete for the top job, he was younger, probably more ambitious, and was going to shake things up, which I think his predecessor, Reg Jones, you know, wanted him to do, wanted his successor to do. And then Jack sort of had all of that and his ability to do that. I know that he ended up getting the nickname at GE of Teflon Jack. Where did that nickname come about from? Well, I mean, he had a bunch of nicknames. He was called Neutron Jack.

Starting point is 00:43:49 He was called Teflon Jack. I think he got away with a lot of things that nowadays he might get, quote, unquote, canceled for. So I think people thought that things happened on his watch that he never got blamed for. I think we all know people like that. And then Neutron Jack was because he was kind of infamous for laying people off and trimming the fad at companies. Do you have any insight in terms of his decision-making? process about layoffs or how he felt about them? I mean, I think he thought, gee, had just gotten way too bureaucratic and bloated, and, you know, he sort of needed to break it to build it back

Starting point is 00:44:27 up again. And I think he wanted to get rid of people who are nonproductive, who had gotten lazy, who weren't as motivated as he was. He wanted real go-getters. And there's no better way to do that kind of thing than to fire a bunch of people, because, that gets people's attention. And, you know, it's like Voltaire wrote about in Candide. After a British general lost a battle in France, when he got back to England, he was killed. For fair an example for les others. To make an example for the others.

Starting point is 00:45:06 And I think Jack did the same thing. Yeah. And I know with these organizations, especially big organizations, people can get really lazy and there can be a lot of fat at the organizations. Things can get really slow. So it is understandable when a company gets that size that you may want to sort of trim it down and let people work a little bit harder. So I heard you say in a past interview that researchers, media reporters, and shareholders

Starting point is 00:45:33 were basically eating out of the palm of Jack's hand. They ate up his every word. What made him such a special spokesperson as the CEO of GE? He was totally a man of the people. He sounded like what he was, which was an only child from north-north of Boston. I mean, he's really sounded like, you know, his father was a train conductor. His mother was a stay-at-home mom. I mean, they were totally middle-class people. He's self-made man. And he sounded that way. But he also had a knack for getting along with him. people and motivating people to do more than they ever thought they could, to accomplish more than they ever thought they could at every step of the way. And when he was, took over GE, it was a company worth $12 billion, you know, not nothing in 1980. But when he left, it was worth around $650 billion at its peak and was the most valuable company in the world, in the most

Starting point is 00:46:41 respected company in the world. And, you know, that's a major accomplishment. Now, Tim Cook at Apple took over Apple after Steve Jobs died. It was worth $300 billion. And now it's worth $10 times $3 trillion. I mean, that's phenomenal. I think Tim Cook has probably created more shareholder value than any other person in the history of the world. But Jack and his day was like Tim Cook today. you know, it'd be interesting to explore how Tim Cook really did do that, just like I explored how Jack did it. Jack was totally sui generous. The people I talked to about him just loved the guy, I mean, and loved working for him. And that's pretty unusual.

Starting point is 00:47:28 Most people don't like their boss. Well, maybe Apple is your next book if you get a job there. And then I'm just kidding. I use Apple products. So there you're going. There's the intersection. There's a personal connection. There's the nexus.

Starting point is 00:47:43 Let me dig a little bit deeper on the way Jack treated his employees. Like you mentioned, he was a man of the people. Talk to us about how he was sort of known for, like, remembering his employee's names, even their family members' names, and how he was able to use that sort of connection to get people to work harder for him, essentially. Right. He did, you know, and again, it's a skill. It's an art form.

Starting point is 00:48:06 I mean, being able to remember people's names after you meet. them once, their family members' names to be able to ask about them. He had real political skills, and I think that inured to his benefit. But he also, he did what he called wallowing, which was he would dig deep into a topic and just bring everyone together to talk about it. But he also encouraged dissent. He encouraged people to disagree with him. Now, again, he was very forceful. He would generally get his way, of course, as a seat. would, but he was capable of having his mind changed if he'd made a decision he could reverse that decision if somebody convinced him why he was wrong and had made a mistake. And I think that

Starting point is 00:48:52 is a great skill. What did he look like, right? Because when I think about Jack, and especially for all of us who sort of just know his name, I think of him as this tall, grand person. What would he dressed like, talk to us about that. Jack was not big, not tall. He was short and a dynamo. When I knew him, obviously, it was much later in his life. So he was even sort of diminished smaller than even he was when he was in his prime. But he, right to the end, always had an incredible amount of energy and just ambition that knew no bounds and a real love of life and lust for life. I mean, it was very infectious. I think one of the things that sort of made me the happiest was that during our last visit together, which also was at the Nantucket

Starting point is 00:49:56 golf club. My older son called up and, coincidentally, and Jack invited him and his friend to come over to the club and sit with us and have a beer. So I was really glad that my son got to, you know, have a beer with Jack Welch and meet Jack Welch. That was great. That's really cool. Good for him. Okay. So my last question here about Jack Welch, and then we'll move on to GE and sort of what it is now and how did it end of where it is now. My last question is really about the fact that Jack worked his way up to become a CEO, just like Tim Cook didn't found Apple. The CEO of Microsoft didn't found Microsoft and is a really great CEO.

Starting point is 00:50:41 So talk to us about the fact that being an entrepreneur doesn't necessarily mean you need to be a founder or inventor. You took that path, sort of. You invented your own career and took that path. But talk to us about the fact that not everybody needs to be an inventor or entrepreneur I've sort of thought a lot about this. I mean, you know, at some point around the turn of the 20th century, founders of companies sort of made the decision that they didn't have to continue to run these companies to benefit from what they had started and created. They could bring in professional management, give them incentives to run the companies that they had

Starting point is 00:51:24 started, and it could actually all work out just fine. They could go pursue other things, philanthropy, golf, living in a hut, you know, in the middle of an island or something, and just own the equity that they had got because they were the founder and the creator and let somebody else run these things who might even be better at it than they were or would be. you know, that must have been an incredible leave of faith to realize that that could work, that you could bring in professional management, then that you could go off and do something else, and then create a whole series of companies where shareholders were quite diverse, and there were many shareholders.

Starting point is 00:52:11 I mean, GE had billions of shares in the company, and hundreds, millions, many millions of shareholders. So the ownership was quite diversified and diluted. And it could all just work out just fine by and large, not always, but mostly. I mean, so that is an incredible leaf of faith to create something like that and to make it work. So I'm sort of fascinated by that moment in time when they, which would go horse we take for granted now, but somebody had to come up with that scheme. And it's really interesting because I think a lot of people, they're not great at inventing or creating or taking something from zero to one,

Starting point is 00:52:55 but they might be great at the ops and operations and actually leading and managing. Look at Jamie Diamond at J.B. Morgan Chase. I mean, he was not a banker. He was not a trader. He worked for Sandy Weil. And he sort of learned to be a bank executive, whatever that means. And he's turned out to be one of the best bank executives we've ever had and made himself a billionaire in the process through his ownership of J.B. Morgan stock that he got for compensation, not because he was the founder of J.B. Morgan. So if you can get yourself somehow into those positions and do a good job at it,

Starting point is 00:53:37 you're going to get rewarded. Okay, let's get back to GE. So the story's not over after Jack Welch. He hands off the C.E. role to Jeffrey Emmelt. And everything sort of went haywire out. after 2001. So talk to us about that, the evolution of where GE is now

Starting point is 00:53:56 after Jeffrey took over. Jeff, in fairness to him, took over from Jack. His first day in the office, his CEO was September 10th, 2001. The next day was September 11th. So GE had made the engines on the jets,

Starting point is 00:54:17 one of the buildings down at the World Trade Center, was reinsured by G Capital. They had some employees who died that day. You know, they owned NBC, which, of course, I think, went for a week or so without any advertising. And then along came the Sarbanes-Oxley Law, and, you know, things changed dramatically on Wall Street

Starting point is 00:54:44 and corporate America in America generally after 9-11. And so Jeff Himald had to deal with all that. But I think, as they say, mistakes were made. Dave Calhoun, who's now the CEO of Boeing and who worked at GE for a long time, told me that, you know, this is a little harsh, but I think hard to argue with. And that is that when Jack had big decisions to make as CEO of GE, he generally made the right decision. and when Jeff had big decisions to make as the CEO of GE, he unfortunately often made the wrong

Starting point is 00:55:24 decisions. And so, you know, what I document in the book is just sort of a series of unfortunate decisions that Jeff made. He thought they were the right ones, and it's easy to second guess in hindsight, but the truth is that poor decisions cost GE its earnings stream. it's profitability, its market value, it's respect, it's AAA credit rating, its stability. It almost went down the tubes during the 2008 financial crisis. So it had to be bailed out. I mean, so you name it. In retrospect, you'd have to say he made the wrong decisions more often than he made the right ones.

Starting point is 00:56:10 And do you feel like Jack thought that Jeff tarnished his legacy or reputation? Absolutely. Yes, I think Jack felt that he had left Jeff a royal flush when Jeff took over from him. And it was hard to argue with Jack about that. I mean, it was a AAA-rated company. It was the most valuable company in the world. It was the most respected company of the world. Jack was the CEO, you know, the manager of the century, whatever that means, thanks to Fortune magazine.

Starting point is 00:56:48 and Jack absolutely felt that Jeff squandered that incredible hand that he had given Jeff. Now, of course, Jeff felt that the hand that Jack dealt him wasn't that great, and he needed to fix it. And a lot of CEOs believe that their predecessor didn't do as good a job as their predecessor would have everybody believe. So, I mean, that's nothing new. I think objectively speaking, you'd have to say that Jack did leave Jeff with a pretty good hand, and he didn't play it particularly well. Circumstances have changed. Obviously, 9-11 changed things, the things that we talked about before changed things, but Jeff made a lot of proactive decisions that I think Jack wouldn't have made or Jack would have played differently. And I don't think I, you know, if Jeff had played the hand differently,

Starting point is 00:57:46 I probably wouldn't have written this book. So that's something to think about too. So interesting. What do you think is there for the future of GE? Do you think it's ever going to be the huge company that we used to know it for? Or do you think, I know it's separating into other companies or has? Yes. So in the process of breaking itself up into three companies, it's, the healthcare division is already publicly trading. GE is a big shareholder. I'm sure they'll spin that off to shareholders. I think next year they're splitting off the power business is GE Vernova.

Starting point is 00:58:22 You know, there's a name right out of a computer brain. And the old GE will be the jet engine business. And Larry Kulp will continue to run that, although I don't know what he knows about the jet engine business, but he obviously wants to be remaining as the CEO of GE. Look, each one of those businesses is important in its own way. Again, we take many of them for granted, but the healthcare business is a really good business. The power business, of course, is, you know, the original business, and it's hugely important even to this day. There's still probably billions of people, two billion, one billion, one

Starting point is 00:59:04 and a half billion people who don't have electric power today who would need it. And GE can provide that. And of course, the jet engine business is jewel. Those engines are the most respected technologically advanced engines in the world. So, you know, I just don't think any of it's going to amount to what GE was once upon a time. Yeah. Well, this is such a great interview. Yeah, fam, there you have it, a forensic autopsy of one of America's greatest companies by one of its elite financial journalist, William Cohen. And I hope you learned as much as I did. And I hope you take some of that Jack Welch energy into everything that you seek to accomplish as well. So William, how we wrap up this interview is I ask a couple questions. And this doesn't have to be related to Jack,

Starting point is 00:59:56 your book, just from your own personal experience. So what is one actionable thing our young and profitors can do today to become more profitable tomorrow? Invest wisely. Invest in good companies with good earnings, good management, good dividends. Don't fall for get rich quick scams. No crypto, no meme stocks. None of that crap. I love that advice.

Starting point is 01:00:25 And what is your secret to profiting in life? And this can be beyond financial. You know, having a loving family and working hard each day and, you know, having integrity and, you know, having equity in what you, doing what you do and trying to minimize, you know, the hold other people have on you. And where can our listeners learn more about you and everything that you do? Well, I have a website, William Cohan.com. I'm still on. on what used to be known is Twitter and now is called X. That's my only social media outlet. I don't believe in any others.

Starting point is 01:01:08 I really don't even believe in X either, but I'm still there. Of course, I can be read. I write twice a week for Puck. Puck.com. That's a subscription business that we started, a digital media company. And I write for a variety of publications still.

Starting point is 01:01:29 Awesome. Well, thank you so much for joining us on Young and Profiting Podcast. Thank you, Hala, for having me. I really enjoyed it.

Young and Profiting with Hala Taha - William Cohan: The Rise and Fall of America’s Most Iconic Company, General Electric | Business E243

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.