Power Failure by William D. Cohan Summary

Power Failure investigates the dramatic rise and fall of General Electric (GE), once a symbol of American corporate dominance. The book analyzes leadership decisions under CEOs Jack Welch and Jeff Immelt, flawed financial strategies, and boardroom failures that led to GE’s collapse. Cohan blends corporate history with investigative journalism to expose systemic hubris and mismanagement.

This book is ideal for business students, corporate leaders, and readers interested in understanding how unchecked ambition and poor governance can dismantle even iconic companies. It offers critical insights for those studying organizational culture, financial risk management, or 20th-century corporate history.

Yes. Cohan’s 750-page narrative is praised for its gripping storytelling despite complex financial details. It provides a sobering case study on leadership failures and remains relevant for its lessons on accountability in modern corporations.

Cohan portrays Welch as a visionary who prioritized short-term profits and aggressive dealmaking over sustainable growth. While Welch transformed GE into a global powerhouse, his reliance on opaque financial engineering planted seeds for later crises, including unsustainable debt and unrealistic earnings targets.

Immelt inherited Welch’s financial imbalances and compounded them through misguided acquisitions (like Alstom) and failure to address GE Capital’s risks. Cohan details how Immelt’s optimism clashed with operational realities, leaving GE overexposed before the 2008 crash.

The book reveals GE’s use of “earnings management” tactics to meet Wall Street expectations, including opaque reserves and creative revenue recognition. These practices masked underlying vulnerabilities in GE Capital and industrial divisions.

Cohan strongly criticizes the board for enabling reckless leadership and lacking financial oversight. Directors repeatedly approved risky mergers, excessive CEO pay packages, and ignored warning signs, prioritizing loyalty to executives over shareholder interests.

While both dissect corporate collapses, Cohan’s work focuses on systemic governance failures rather than outright fraud. Power Failure emphasizes how even respected institutions can crumble through incremental bad decisions, contrasting with Enron’s deliberate deception.

Some reviewers note the complex cast of characters may overwhelm casual readers. Cohan’s harsh stance on current CEO Larry Culp has also sparked debate, with critics arguing he underestimates restructuring challenges.

The book serves as a warning for companies navigating AI disruption and ESG pressures. Its lessons on balancing innovation with financial discipline, transparent governance, and ethical leadership remain urgent in 2025’s volatile markets.

Leveraging his Wall Street background, Cohan decodes financial maneuvers while maintaining narrative drive. This approach mirrors his acclaimed works like House of Cards and Money and Power, blending deep research with accessible analysis.

Key takeaways include:

• Avoid overreliance on debt-fueled growth
• Align executive incentives with long-term stability
• Foster board independence and financial literacy
• Balance innovation with core operational rigor