Comments

Great quote. Thank you.

Th quote below was taken from the FT article in the "Thank you, Jack Welch" post. Does this capitalization strike anyone as disproportionate in merely 20 years? What can we reasonably expect? Have markets changed all that much in 100 years? People haven't. Is this kind of capitalization analogus to that before the tech bust? I dunno, really. Just asking.

"…GE's success under Mr. Welch-during his tenure, the conglomerate’s market capitalization arose from $13bn to $400bn while profits grew tenfold to almost $14 billion - prompted many executives to place greater emphasis on shareholder value."

The response by other executives seem dichotomous to Mr. Welch's statement itself that the focus on "shareholder's value was the dumbest thing in the world." Executives seemed to do what they thought Mr. Welch did to get such capitalization.

Posted by Judith Ellis at March 16, 2009 9:37 AM

Thanks Tom - I read the full paragraph with interest: "Another problem was at play: the extraordinary complexity and opacity of modern finance. During the past two decades, a wave of innovation has reshaped the way markets work, in a manner that once seemed able to deliver huge benefits for all concerned. But this innovation became so intense that it outran the comprehension of most ordinary bankers - not to mention regulators."

Proves simplicity is needed just as much by the 'intelligent folks' making important decisions as us 'ordinary' mortals lower down the pecking order. I agree with the sentiments of Gillian Tett. I've always believed the best way to stifle innovation is to make it as complex as possible.

Posted by Trevor Gay at March 16, 2009 9:59 AM

Quite agree Trevor! - simplicity rules! (I like to think it's a sign of superior intelligence to deal with things in simple terms!)

Having said that it is becoming clear that some people DID understand the risks in these orgs and tried to flag them. My view is there is not enough negative thinking in business. At grass roots level we use negative thinkers (what can go wrong here? then what can we do about it) higher up it seems to be viewed as a sin

Also as an intuitive type person I find the odds stacked against you in a "facts" based world. Even when "facts" have been proved wrong people still cling to them like a drowning man to a hunk of wood.

The vast majority of thinking in corporations is very very very poor. This is compounded by people simply not being able to recognise this. Most Doers cannot think but think they can. Most thinkers cannot do but are often very aware of their own limitations. Doers run businesses period

Strong thinkers can move between logic, intuitive, mystical, rational, non rational, irrational, emotional, creative etc. Can focus on a few facts or take in the entire universe of possibility and are conciously and deliberately able to switch between approaches. 99% of people in business are simply not self aware enough to be able to think.

Posted by PaulH at March 16, 2009 11:23 AM

I agree - plus the speed of the new world of computing is going to make these complexity issues a continual challenge.

Posted by C Love at March 16, 2009 7:21 PM