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Jack Welch has died

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Re: Jack Welch has died

#211

Post by bjourne »

AtlasBarfed wrote: post #185
michaelgrafl wrote: post #152

Earlier quoted context omitted.

You‘re saying this as if it were realistic for the majority of people to save up a cushion of 6 months in a reasonable time frame (or ever).

If you're a republican, people can't do this because of their failings and choices. If you're a democrat, it's because the economic deck is stacked against people. I thought that a very large majority of credit card debt was healthcare costs and other structural life costs, so that is score one for the democrat view, although we are a very unhealthy population (so back to the republican view a bit) Then again, the re…

Poverty and unhealthy eating goes hand in hand. If you work for more than 8 hours a day and/or with long commutes, how on earth will you have time to cook? The US has a huge poverty problem that is well-documented in countless studies. It has nothing to do with republicans vs democrats, it has everything to do with believing the facts!

Re: Jack Welch has died

#212

Post by markus_zhang »

asveikau wrote: post #121
amyjess wrote: post #107

Earlier quoted context omitted.

IIRC Welch came up with rank-and-yank because he needed to lay people off and decided he wanted to be "fair" about it and not lay off his best performers. And somehow that got cargo-culted into "we should continuously get rid of the bottom X% of people all the time".

Well, at some point in American business culture it does seem like a number of people did lose sight and become convinced that the only way to deliver shareholder value is to lay off continuously.

Actually cutting cost usually comes first to the mind of the investment bankers because:

1. Cutting cost will always yield a quick gain

2. It's a lot more difficult to turn it around and win in the long term

3. Even if the banker wants a long term picture, cutting cost is not necessarily a bad idea.

Re: Jack Welch has died

#213

Post by TuringNYC »

gowld wrote: post #169
vl wrote: post #148

Earlier quoted context omitted.

Welch also invented corporate raiding by management. When he started, employees owned 0, when finished 31 percent of GE, with majority of 31 owned by management. This effectively transferred 1/3 of value from shareholders to management. Since then same thing happens with most other corporations.

Was that 31percent purchased or seized?

Granted by dilution

Re: Jack Welch has died

#214

Post by kamaal »

WalterBright wrote: post #190
WalterBright wrote: post #184

Earlier quoted context omitted.

A majority of people are significantly above the poverty line. If they're living hand-to-mouth, they are mismanaging their finances. For example, I know a fellow who told me he could not handle the slightest disruption in his paycheck. He was driving a new car, living in new house, wore expensive clothes, and was starting a family. A friend of mine living in an apartment told me he was unable to pay his bills. I aske…

A lot of people overspend their income because they're eating out. Restaurants are an extremely expensive way to get fed. Even a quarter pounder at McD's is $6, but I can get a half pound of good steak from the supermarket for $2. My drip coffee costs me $.03 per cup, compared to $4 at Starbucks. You can fry yourself 3 eggs for $.50.

Not sure where I read this, but there was some article about the top skills you can learn that can help you save up money. Cooking was the top skill.

Apart from the upfront restaurant bills, also you can save money health wise on the longer run.

Re: Jack Welch has died

#215

Post by kamaal »

hintymad wrote: post #143
optimiz3 wrote: post #34

Steve Ballmer revered Jack Welch's rank-and-yank management style. During the 2000s and early 2010s Microsoft's stack-rank reviews were infamous for the internal politics created. Didn't matter if you had a full team of top-tier engineers, the bottom 15% WAS going to get managed out. Savvy managers would hire low-tier performers to protect the productive ones. That's the only lens through which I have to view Mr. Wel…

I find Netflix's model works better: allocating resources by visibility of a team. Roughly speaking, a manager gets a chunk of budget from her manager, and she can decide how big a package she gives to each of her team members. The more important a team becomes, the more budget the team gets. The more visible a person becomes to her manager, the more likely this person will get larger package. This comes with the fol…

>>she can decide how big a package she gives to each of her team members

In my experience this turns out be a huge scam. Worse a legally sanctioned scam.

Say she had 11 members in her team. She will give $90 to her pet, and $1 each to the remaining 10. That is how this works on the longer run. The definition of a 'high performer' is often hazy here, and a case can be built up to justify giving the money to whom she wants.

Eventually it turns out there are enormous cartel like structures, you have to be in them to get paid up well. Or you slog like a donkey and quit eventually.

Re: Jack Welch has died

#216

Post by hintymad »

kamaal wrote: post #215
hintymad wrote: post #143

Earlier quoted context omitted.

I find Netflix's model works better: allocating resources by visibility of a team. Roughly speaking, a manager gets a chunk of budget from her manager, and she can decide how big a package she gives to each of her team members. The more important a team becomes, the more budget the team gets. The more visible a person becomes to her manager, the more likely this person will get larger package. This comes with the fol…

>>she can decide how big a package she gives to each of her team members In my experience this turns out be a huge scam. Worse a legally sanctioned scam. Say she had 11 members in her team. She will give $90 to her pet, and $1 each to the remaining 10. That is how this works on the longer run. The definition of a 'high performer' is often hazy here, and a case can be built up to justify giving the money to whom she w…

Nope. Netflix would not allow that to happen. There is always a balance and check, freedom and responsibility, right?

Re: Jack Welch has died

#217

Post by fsckboy »

keenmaster wrote: post #154
triceratops wrote: post #134

Earlier quoted context omitted.

> He didn't seem to understand GE's broad products businesses but did understand finance, so he continuously closed those operations. Uh...no. He was a trained chemical engineer, and understood products, manufacturing, and operations perfectly well. In his own words, here's why he emphasized finance: "My gut told me that compared to the industrial operations I did know, this business [GE Capital] seemed an easy way t…

"[GE Capital] seemed an easy way to make money...This thing looked like a 'gold mine' to me." A good MBA finance curriculum might kick off with the Modigliani-Miller theorem (M&M), which basically says: 1. Theoretically , you can't create value through your mix of financing. It doesn't matter whether you use 100% equity, 100% debt, or 50/50, your mix of financing won't create value (unlike good R&D for example). 2. #…

huh? you don't have this right.

Modigliani-Miller refers to the financial structure of your corporation, GE in this case: it refers to the mix of capital that GE raises from investors (debt + equity). To give a simple example to illustrate, the value of your lemonade stand as a business is based on your revenue minus your costs, it's based on your "business". You need to raise money to buy your raw materials and equipment to get started or expand? Whether you borrow that money or sell shares in your lemonade stand does not change the value of your business. The bit about absence of tax incentives is because you can write off the interest on debt from the income taxes, but the dividends you pay actually get taxed, so there is an incentive for the equity holders to raise some money via debt rather than equity; but the point that M&M makes remains true.

GE Capital did not fund GE, so M&M doesn't apply.

M&M would apply to GE's ownership of GE Capital, but if all the debt and equity is owned by one entity there really isn't a difference between them (see Humpty Dumpty, back together again).

It's quite common for large industrial companies to have large credit arms: oil companies extend credit to gas stations to buy their gas, just like automobile manufacturers finance car purchases. GE was no different. Leveraging their expertise in finance was a natural extension of the business, and financial firms sometimes fail like any other business, whether they are standalone or wholly owned subsidiaries.

Re: Jack Welch has died

#218

Post by kamaal »

hintymad wrote: post #216
kamaal wrote: post #215

Earlier quoted context omitted.

>>she can decide how big a package she gives to each of her team members In my experience this turns out be a huge scam. Worse a legally sanctioned scam. Say she had 11 members in her team. She will give $90 to her pet, and $1 each to the remaining 10. That is how this works on the longer run. The definition of a 'high performer' is often hazy here, and a case can be built up to justify giving the money to whom she w…

Nope. Netflix would not allow that to happen. There is always a balance and check, freedom and responsibility, right?

Who is watching? And who will keep things in check?

People who are supposed to approve, audit and verify are a part of the same system playing with the same incentives.

Re: Jack Welch has died

#219

Post by hnick »

jonny_eh wrote: post #149
amyjess wrote: post #107

Earlier quoted context omitted.

IIRC Welch came up with rank-and-yank because he needed to lay people off and decided he wanted to be "fair" about it and not lay off his best performers. And somehow that got cargo-culted into "we should continuously get rid of the bottom X% of people all the time".

> And somehow that got cargo-culted into… his book maybe? He was still defending the practice in 2005: https://usatoday30.usatoday.com/educate/college/careers/Advi...

He seems to suggest not just getting rid of them, rather letting them know where they stand in the hope they move on or take it upon themselves to improve.

> You've got a bad take on it. It's letting the bottom 10% know where they are and then giving them a chance to move on. About 70% (of the bottom 10%) leave on their own. Who wants to be on the bottom once they know it? You don't fire them. That's being mean.

Though of course firing is always an option especially in the USA.

From that article the key point I found was that he would rather expend company resources nurturing top performers instead of salvaging the bottom performers. He believes it's a much better investment.

Re: Jack Welch has died

#220

Post by hnick »

kamaal wrote: post #214
WalterBright wrote: post #190

Earlier quoted context omitted.

A lot of people overspend their income because they're eating out. Restaurants are an extremely expensive way to get fed. Even a quarter pounder at McD's is $6, but I can get a half pound of good steak from the supermarket for $2. My drip coffee costs me $.03 per cup, compared to $4 at Starbucks. You can fry yourself 3 eggs for $.50.

Not sure where I read this, but there was some article about the top skills you can learn that can help you save up money. Cooking was the top skill. Apart from the upfront restaurant bills, also you can save money health wise on the longer run.

I'd personally file it under the entertainment budget too. It's fun!
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