Former GE chief Jack Welch lit into Schools Chancellor Carmen Fariña’s management skills on Monday, questioning why she hired superintendents who had run struggling schools.
“She just appointed 15 superintendents — seven from failing schools, five from disasters, 10 percent passing tests, et cetera — as superintendents,” Welch said on CNBC.
“When you have a philosophy of putting people in place without a meritocracy, without differentiation, you get bad performance.”
Welch argued that major corporations would never promote “flunkies” and “hacks” the way the Department of Education did.
“You couldn’t run CNBC, you couldn’t run GE, you couldn’t run Apple, you couldn’t run Google, you couldn’t run any company if you took of your 15 appointments of division managers and made them flunkies, hacks, and stuck them in the schools,” Welch said.
“[In] that system of no meritocracy, of no differentiation, we’re all equal, you don’t get performance. You can’t do it. You just can’t do it.”
We're going to get to a personal critique of Welch in a minute, so hang on tight.
Before we do, let's deal with Welch's assertion that there's a meritocracy in business.
Because there isn't.
What there often is in business is an old boy's network that rewards people - mostly arrogant white men like Welch - over everybody else.
Take a look at the guys at the top of nearly every major company, look at their boards - see many women there?
See many people of color?
Can't be a true meritocracy when all you see are white men everywhere, with a very few brown and black men thrown in to keep the whole thing from looking like a Klan meeting.
The gender disparity in business is quite striking, since women are more than half of the population and have been training for top positions for decades now, as this factsheet by the Center For American Progress shows:
Women make up a majority of the U.S. populationWomen are 50.8 percent of the U.S. population.
- They earn almost 60 percent of undergraduate degrees, and 60 percent of all master’s degrees.
- They earn 47 percent of all law degrees, and 48 percent of all medical degrees.
- They earn more than 44 percent of master’s degrees in business and management, including 37 percent of MBAs.
- They are 47 percent of the U.S. labor force, and 59 percent of the college-educated, entry-level workforce.
And yet…Although they hold almost 52 percent of all professional-level jobs, American women lag substantially behind men when it comes to their representation in leadership positions:
- They are only 14.6 percent of executive officers, 8.1 percent of top earners, and 4.6 percent of Fortune 500 CEOs.
- They hold just 16.9 percent of Fortune 500 board seats.
- In the financial services industry, they make up 54.2 percent of the labor force, but are only 12.4 percent of executive officers, and 18.3 percent of board directors. None are CEOs.
- They account for 78.4 percent of the labor force in health care and social assistance but only 14.6 percent of executive officers and 12.4 percent of board directors. None, again, are CEOs.
- In the legal field, they are 45.4 percent of associates—but only 25 percent of nonequity partners and 15 percent of equity partners.
- In medicine, they comprise 34.3 percent of all physicians and surgeons but only 15.9 percent of medical school deans.
- In information technology, they hold only 9 percent of management positions and account for only 14 percent of senior management positions at Silicon Valley startups.
- Although women control 80 percent of consumer spending in the United States, they are only 3 percent of creative directors in advertising.
- Their image onscreen is still created, overwhelmingly, by men.
- Women accounted for just 16 percent of all the directors, executive producers, producers, writers, cinematographers, and editors who worked on the top-grossing 250 domestic films of 2013, and were just 28 percent of all offscreen talent on broadcast television programs during the 2012-13 primetime season.
Further putting a dent in Welch's "businesses are meritocratic unlike schools under Farina" assertion is the history of how the collapse of '08 came about.
A lot of it was brought about by arrogant white men, with a token man of color or two - and a lot of these guys were known to be not too bright before the whole mess came down.
Like Stan O'Neal at Merrill Lynch, who brought about the financial collapse of the firm and his replacement, John Thain, who spent $1 million remodeling his office with federal bailout money.
Or Jimmy Cayne at Bear Stearns, who famously played bridge and smoked dope as his firm collapsed.
Or Chuck Prince at Citibank, who claimed his firm was "still dancing" even as its risky loans and bad bets were taking it to the brink of collapse.
The Peter Principle certainly seemed at work with these guys.
Lots of inept guys are running or have run companies not associated with the '08 financial collapse of the country.
Let's look at just one - Eddie Lampert, the Ayn Rand fan, who has nearly destroyed Sears by trying to run the company the way Ayn Rand would.
Here's his record:
- Sears has amassed a mountain of debt; its debt to equity ratio was 8.406% in July 2014.
- Sears’ TTM revenue fell by $3.68 billion between July 2013 and July 2014.
- Sears CEO Eddie Lampert is trying to protect the chain’s real estate assets by transferring them to a REIT.
- Sears is closing stores so fast that observers are having a hard time keeping count.
- Sears is actually planning to close dozens of stores during the critical holiday shopping season.
How's that for meritocratic?
Lampert's still making calls on Sears even though he has brought the once-proud company to near collapse by bad call after bad call.
OK so the "Business Is Meritocratic" argument Welch uses is obviously untrue.
Now let's deal with Jack Welch the man.
Because that matter's too.
This is a guy whose company knowingly polluted the Hudson River for decades.
Welch did the best he could to a) hide his company's actions b) shield his company from having to clean up the mess it made and c) claim PCB's aren't a health hazard or cancer-causing, citing jive studies from 30 years that were rigged to give GE the results it wanted.
The Times-Union published a piece on General Electric, PCB's and Welch back in March - it is unflinching in its depiction of Welch as a apologist for GE:
For years, as it fought against being forced to clean up the Hudson River, General Electric Co. argued that an oil-like insulating fluid that had seeped into the river from its Washington County capacitor plants wasn't harmful to humans.
Besides, GE officials said, the river was cleaning itself.
Yet newly uncovered documents reveal that as early as the 1960s — decades before the government ordered GE to undertake the river dredging that is scheduled to resume this spring — company officials were warned of the potential serious health threats of polychlorinated biphenyls (PCBs), which their engineers described in confidential memos as "hazardous waste."
The documents also indicate that GE flushed far more PCBs into the river than government regulators have estimated, and that nearly a million pounds a year of additional PCBs were carted away by scavenger crews, dumped with an attitude characterized by a GE engineer in 1970 as "out of sight, out of mind."
Jack Welch also doesn't believe PCBs have harmful health effects, despite scientific evidence that they may. Much of his position on that, he said, comes from studies that GE commissioned as early as 1976, in which the health trends of its factory workers were studied by scientists.
Last spring, the International Agency for Research on Cancer, which first warned of PCBs' adverse health effects in 1978, declared that certain PCBs, including the type flushed into the river by GE, "have reproductive, toxic, and carcinogenic consequences." The EPA, based on past practice, is expected to adopt that finding once the World Health Organization adopts it.
"EPA," Welch scoffed, waving his hand dismissively during his deposition last year. "I was completely satisfied as to the safety of PCBs. In my time I studied it. I looked at it. I made my judgment and I was completely satisfied. ... I haven't seen any PCB studies that convince me there was another side to it."
But the studies that Welch cites have drawn scientists' questions. In one study commissioned by GE, scientists examined the health patterns of workers at the Washington County capacitor plants and determined that they had a lower rate of cancer than the general population.
"It followed people for only five years ... (and) included all the secretaries, all the people that weren't anywhere near where the PCBs were," said Dr. David O. Carpenter, who has studied PCBs for decades.
"The point about those studies is they were included in the review by the International Agency for Research on Cancer, along with all of the other studies, many of them occupational, and they were found to be unconvincing," said Carpenter, director of the Institute for Health and the Environment at the University at Albany. "The issue is that in addition to cancer, we now have such strong evidence that PCBs alter a large number of other organ systems. PCBs affect the brain and reduce learning ability. This has been demonstrated repeatedly in children exposed to PCBs, often exposed even before birth where they get PCBs from their mother's body and from breast milk."
Learning and memory functions also diminish for adults exposed to PCBs, Carpenter said. He added that some scientists suspect PCBs cause adverse effects to the thyroid glands and health risks that include diabetes, high blood pressure and effects on human reproductive systems.
"PCBs are very dangerous chemicals and anybody that says they are not dangerous simply is not telling the truth, or just does not know what studies have been done," Carpenter said.
Ah, but not to Jack Welch they're not.
And he's studied this issue, so he assures us we should take him at his word, even though the study he cites to back up his claim was rigged by limiting the length of it and by putting people who were nowhere near the PCB's into it.
Jack Welch is quite literally one of the most evil men on the planet.
His company polluted the Hudson for decades with PCB's, but in order to save his company money, he argues PCB's aren't harmful despite mountains of evidence to the contrary, then cites a rigged study to back up his claims.
Who the hell cares about anything a criminal like this says about anything?
How many cancers, how many deaths is the guy responsible for because he refused to take responsibility for the damage his company did to the river?
I'm not here to defend Farina and her choice of superintendents.
I am here to call Welch out for his horseshit.
His "Business Is Meritocratic" argument is horseshit and any rudimentary look at the quality and track records of some of the people running businesses show that.
On top of that, Welch's own track record places him squarely as one of the worst human beings on the planet.
Quite frankly, Farina should consider it an honor to be criticized by someone like Welch.