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Testosterone,
Inc.: Tales of CEOs Gone Wild by Christopher Byron Rating: •• (Mildly Recommended) |
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title or picture to buy from amazon.com |
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Stampede For a somewhat entertaining light summer reading
that bashes Jack Welch, Ron Perelman, Al Dunlap and Dennis Kozlowski, pick up
Christopher Byron’s new book, Testosterone, Inc.: Tales of
CEOs Gone Wild. Byron proposes that these CEOs are all driven by
overdoses of testosterone. Readers looking for depth of understanding about
these individuals or their organizations will need to look elsewhere. You may
have heard Bryon’s radio segment, Wall Street Wakeup, or seen him comment on
television. If that’s the case, you may be inclined toward or away from this
book for that reason. Throughout the book, Byron pounds at these Fab 4 CEOs,
and incorporates so many footnotes that they become distracting. Here’s an excerpt from the beginning of
Chapter 7, “Question from the Chairman: How Much Do I Weigh?” pp. 97-104: The Jones had officially taken over as GE’s
chairman from his predecessor—a man named Fred Borch—on December 15, 1972,
and the passing of the baton proved awkwardly timed to say the least, for scarcely
had the new man settled into his new job than the Egyptian Army crossed the
Suez Canal, unleashing the Yom Kippur War. The invasion caused the A tall, gaunt, chain-smoking Briton,
Jones greeted the world with a reserved demeanor and a furrowed brow even in
the best of times. And the start of his career as GE’s tenth leader since the
company’s founding in 1892 was hardly a time to be looked back on fondly by
anyone in business, let alone this business leader with the sensibilities of
an Old Etonian Tory and the looks of the Duke of Windsor; he was simply
overwhelmed by events. Beset with a collapsed stock market,
soaring oil prices, and Spenglerian editorials about the decline of the
West, Jones seemed to move through his days enveloped in perpetual gloom
about GE’s future if radical action weren’t taken, and quickly. “The place had
become so ossified and hierarchal that it was impossible to get anything
done,” says an executive who worked at corporate headquarters during the
period. “Arguing over inertia had become everyone’s job.” The company needed to be streamlined
and reorganized so that it could compete in a world in which the only
constant seemed overnight to have become relentless, accelerating, and
threatening change. But what exactly should he do? Everywhere he looked business
leaders were as uncertain as he was. After a quarter century of global
hegemony, an entire generation of American “corporate statesmen” suddenly
found themselves with their backs to the wall: Irving Shapiro of E.I. Du Pont
de Nemours, Richard Gerstenberg of General Motors, Edgar Speer of U.S. Steel,
Walter Wriston of First National City Corporation, John DeButts of AT&T.
For more than twenty years, men such as these— and their colleagues,
predecessors, and business leader rivals—had been the voices of unchallenged
authority regarding how best to organize economic activity and deploy it
globally for maximum return. Now they seemed to be wondering whether
they even knew what they’d been talking about. Whichever way one turned, the
American economy looked to be at war with business itself. In the wake of the
oil crisis, consumer price inflation, already moving up steadily as a result
of the Vietnam War (which by this time was actually winding down), now shot
into orbit. Meanwhile, productivity growth began to slow and eventually to
peter out entirely, even as unemployment rose steadily. A whole new concept
in political economics turned up: the Misery Index. You added the
unemployment and inflation rates together and you got an index number of just
how economically miserable the American people were thought to be. Big and presumably rock-solid companies
began to teeter, while second- and third-tier companies started dropping like
flies. Meanwhile, industries like automaking, shipbuilding, and steel manufacturing—weakened
by unions that had been demanding, and getting, some of the highest wages on
earth—suddenly found themselves in frantic retreat from rival industries in
countries like Japan and West Germany, which many Americans had smugly
assumed were still recovering from World War II. Business leaders everywhere knew
something was wrong, but few seemed to have a clear idea what to do about it,
and those who did lacked business structures flexible enough to get anything
done anyway. Like many large manufacturing and
industrial businesses that traced their roots to the turn of the century, GE
had operated from the start as basically a holding company with a small and
centralized Corporate management ruling over what eventually developed into
nearly a dozen separate operating fiefdoms, which the company called “Works.”
They were scattered across most of the Northeast quadrant of the During
the World War II years, GE and the country’s other leading manufacturing
enterprises adapted easily to the evolving bureaucracy of the Pentagon and
the War Department, and a lot of the resulting heft at the corporate level
carried over Into the 1950s.
But efforts to reform and streamline the structure for the demands of
civilian life simply resulted in whole new layers of bureaucracy being piled
on top of what was already there. Ralph
Cordiner, the company’s president at the start of the 1950s, led the most
notable of these efforts.[i]
Standing barely five feet tall in his stocking feet, Cordiner seemed
determined to wrestle the GE bureaucracy into submission one way or
another—to which end he proceeded to break up the Works operations (by then
totaling eleven) into 190 separate “departments,” some with yearly revenues
of barely $2 million. Cordiner asserted control over this fragmented system
through nearly fifty separate and specially created “Divisions—in effect, a
vast new layer of management bureaucracy inserted where none had existed
before. These divisions reported to just under a dozen “Groups,” and the
Groups reported to Cordiner. To
make sure that everyone in these new levels of management was on the same
page, Cordiner next set up a management training center in the After Cordiner canie another GE
chairman, Fred Borch, who tried to make GE’s superstructure more manageable,
only to wind up making it even bigger and more unwieldy. Borch’s unique
contrihutioil: To increase the number of departments by a third, to 350, and
to create an “Executive Office of the CEO” with three vice chairmen
sandwiched between Borch and the Groups.[ii] Somehow, this entire apparatus needed
to be disassembled and discarded in favor of something leaner and more
nimble, so that it didn’t take forever to get the company to act on an idea,
or even make a decision. But although Jones knew what needed to be done, his
retiring temperament seemed to hold him back, and after three years as
chairman and CEO, GE was still weighed down with the same unwieldy management
hierarchy it had inherited from Borch. To Jones, reforming GE was turning out
to be like trying to alter the course of a supertanker underway; you needed
five miles of forward motion to shift the ship’s heading by just one degree. So it was Jones’ good fortune—and
Welch’s as well—that the two men were to meet at a moment when everything
Jones felt he needed to begin turning GE in a new direction would wind up
standing before him—at this otherwise forgettable budget and planning
meeting—in the person of Jack Welch. At this point, Jones himself had been
in his job for less than a year and he was already coming to dislike these
sessions—especially the little presentation kits that the various Group heads
prepared and used like show-and-tell props. As far as Jones was concerned,
they all Suffered from the same fundamental dishonesty—what Jones liked to think
of as “the hockey stick forecast.” Each could he counted on to show basically
the same thing: Group earnings declining steadily for several quarters as
capital investment in some grand new project ramped up … followed by earnings
shooting through the ceiling year-after-year for the next half decade as the
company harvested the rewards of the Group leader’s brilliance. Jones had
become fed up with the very idea of these useless forecasts. But
Welch’s presentation proved entirely different, and reviewing it in advance
of the meeting, Jones could see that a great deal of thought and effort had gone
into it. Performance forecasts were set forth in detail, quarter-by- quarter,
for every specific product line in Welch’s Group. Customer demand forecasts
were also set forth, once again in detail, and once again for each specific
product in the Group There were forecasts for penetration into new markets,
and flowcharts to show the planned development of new products, indicating
when they would become marketable to customers, and when return revenue flows
would begin. It
was a completely different presentation from anything Jones had seen before—maybe
different from anything that anyone at GE had ever produced before—for any
chairman or CEO. It was unique—a forecast that fully and carefully brought
together the outlook for products and cash flows at the Group level over the
next five years. Reviewing
it, Jones thought to himself, “Say, this is really something. This is really
well thought through. It’s well considered.” By
the time the meeting began, Jones had read the presentation several times
over and had prepared plenty of questions to ask the young Group head. He was
going to put him through his paces, make the man defend his work as if he
were facing off against the senior faculty in his PhD orals. Yet,
by the end of the session it was Jones—and not Welch—who’d been rendered
speechless. Granted, Welch was a short, pugnacious fellow, with an adenoidal
voice and a working-class In fact, in every way one might have
imagined, the two men were polar opposites. Welch stood five feet eight
inches and sometimes looked even shorter, thanks in part to his habit of
wearing blue blazers and gray slacks to every function—a two-toned color ensemble
that emphasized the very stubbiness of his fire hydrant frame. What’s more,
he liked to boast of maintaining an “open door” policy to his office—though
the boast was meaningless because few executives seemed to welcome the
experience of barging in on him unannounced. By contrast, Jones stood six feet four
inches and looked even taller—thanks largely to his office uniform of a dark
blue suit, white shirt, and muted tie. Taken together, the ensemble created
the appearance of an individual who somehow seemed larger than life. Other GE
executives spoke of the hushed stillness of his office, and the sense that
would overtake them upon entering it, of being in a mighty place, ruled by a
powerful hut benevolent leader. One did not raise one’s voice in this place,
for the simple reason that one did not need to: When the leader spoke, the
mere speaking of the words was enough to command attention.[iii] Yet so far as Jones was concerned, all
that was nothing when weighed against the substance of Welch’s answers: He
had a ready, well-reasoned response for every single question Jones put to
him. In fact, when Jones later reflected on the performance, it seemed almost
as if Welch had actually anticipated Jones’ questions—and rehearsed his
answers—before he ever left Pittsfield.[iv] After the meeting, Jones asked Welch’s
immediate boss, a vice chairman named Herman Weiss, to chat for minute. He
said, “Herm this Welch fellow is someone we’ve got to be bringing along. I
think we should get him down here to Not long after, Weiss reported back
that he had put the idea to Welch, hut that the young man had declined; and
Jones thought, “He’s a big fish in a small pond up there, hut he’s going to
have to make up his mind.” If
laughing at the shoddy behavior presents entertainment for you, by all means
read Testosterone
Inc. If you think you heard just one side of the story in Jack Welch’s Straight
From the Gut, read the other side in Testosterone
Inc. Byron reveals aspects of the character and integrity of these four
CEOs, and for that reason alone, some readers will find Testosterone
Inc. enlightening. Steve
Hopkins, August 26, 2004 |
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ã 2004 Hopkins and Company, LLC The recommendation rating for
this book appeared in the September
2004 issue of Executive Times URL for this review: http://www.hopkinsandcompany.com/Books/Testosterone.htm For Reprint Permission,
Contact: Hopkins & Company, LLC • E-mail: books@hopkinsandcompany.com |
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