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- Bill Gates recommended reading “Lights Out: Pride, Delusion, and the Fall of General Electric”.
- Gates said it was hard to read reviews from other leaders, but he learned a lot from the book.
- One of the main takeaways from the book for Gates was not to focus exclusively on the good news.
In his annual summer reading recommendation this year, Bill Gates primarily suggested books that strengthen the relationship between humans and nature.
One title in particular stands out, however: “Lights Out: Pride, Delusion, and the Fall of General Electric”.
As explained in Inc, this book is a warning on how the executives of General Electric, one of the world’s largest corporations, have been so blinded by their success for so long that it was too late to do what. whether it be.
“I couldn’t wait to read ‘Lights Out: Pride, Delusion, and the Fall of General Electric’ by Wall Street Journal reporters Thomas Gryta and Ted Mann,” Gates said in his blog, Gates Notes. “I wanted to understand what was really wrong and what lessons this story holds for investors, regulators, business leaders and business students.”
Adding this to his recommendations may not have been easy for Gates, however, as the book is a review and analysis of decisions that should never be made in a business – and General Electric was one of the first. Microsoft customers.
“Sometimes it was a little difficult… to read such harsh criticisms of other leaders,” Gates added, “[b]But I got a lot out of reading this book. “
Here are some of the main takeaways from the book, according to Gates.
Don’t be too ambitious in the short term
“One of GE’s biggest apparent strengths was actually one of its biggest weaknesses,” Gates said on his blog.
GE has consistently met or exceeded Wall Street analysts’ forecasts in its quarterly or annual results.
But what happens is that they were just serving investors and stock performance, which isn’t always an indicator that all is well.
A company can have significant revenue, but if it is lower than analysts’ expectations, analysts will post negative comments and stock prices will plummet.
Conversely, a company can take huge losses, but if they fall below analysts’ expectations, its stock price will soar.
Lights Out reveals some questionable methods GE used to arrive at the numbers it thought it owed.
The search for this short-term profit weakens the company.
Don’t focus exclusively on the good news
“In many businesses, bad news travels very slowly, while good news travels fast,” Gates said.
The leader said he tried to combat this at Microsoft – whenever an employee told him positive news, Gates would ask him what was not is doing so well.
While some may find it off-putting for employee morale, the ultimate message isn’t to motivate people to focus on just the good news, as that can mean you don’t get to the bad news on time.
Don’t be fooled and don’t fool your team
Believing they could have it all was one of General Electric’s biggest mistakes.
Investors had full confidence in the company, but that confidence should never transfer to the leaders themselves.
Unfortunately, he did.
So they tried to dip their hands in almost any jar they could, including cinema, insurance, finance, and nuclear power plants – as well as making light bulbs and household appliances.
“GE did not have the right talent and systems to bring together a dizzying array of independent businesses and run them well,” said Gates. “GE has been successful in persuading people that its GPs can avoid the pitfalls that have tripped up big conglomerates in the past. ”
“In reality,” he explained, “these generalists often did not understand the specifics of the industries they had to manage and could not navigate the trends in their industries.”
If customers and partners think your business is the best or the most forward-thinking, they’ll trust it – but if a leader assumes it’s true and has no worries or capacity for self-criticism or self-criticism. improvement, it is lost.
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