Village Visionaries

The former head of General Electric, Jack Welch, has now come out against shareholder value. According to the Financial Times, Welch said it was a “dumb idea” and that the importance executives and investors gave it was “misplaced.”

Considered the father of the shareholder value movement since a speech in 1981 with a slew of books and speeches outlining its tenets over the years, Welch confessed he “never meant boosting a company’s share price should be the main goal of executives.” Where was Jack a few years ago when such a pronouncement would have been a bold, headline-grabbing slap to his legions of robot-like management acolytes?

It’s always easy to practice humility and contrition with the benefit of a rear-view mirror. Just ask former Federal Reserve Chairman Alan Greenspan who suggested in recent interviews his competing “invisible hands” of self-interest performed poorly when autonomously stabilizing the U.S. financial system. Greenspan also dropped a bomb on his Ayn Rand heritage saying some U.S. banks might need to be temporarily nationalized for the welfare of the world economy.

Shocking stuff. Any day now we might have Donald Rumsfeld pulling a Robert McNamara and apologizing for the 2003 Iraq War. But with Welch and Greenspan furiously backtracking, it might be too ‘exuberant’ to expect that much in one year.

~ by deadmanscurve on March 15, 2009.