Uh oh, GE just warned of another year of falling profits. It recently sold off its BioPharma unit making investors feel a bit better, until they realized things were still getting worse. GE needed to do something after cutting its dividend and reporting a huge loss. Jack Welch would be turning in his grave except for the fact that he’s alive.

Do you remember when GE was the epitome of the successful company conglomerate? Is there some thing we can learn about leadership here? Something that doesn’t rest on the false shibboleth that GE was the best run company in the world?

You remember those days, right? GE had its famous leadership institute in Crotonville – the Keeper of the Flame so to speak - which Welch set up and frequently visited. Those were the days when having run a unit of GE meant that you were the anointed one of the chosen few; when having GE on your resume practically guaranteed you a prestigious gig at the helm of some US corporate icon or the other. How the mighty are fallen!

First Immelt, then John Flannery and now Larry Culp. And then it became apparent that the rot had started before them, maybe in Welch’s time, even before. This wasn’t something new; it was something old that had been going on for donkeys years but covered up by artful financial engineering that even the SEC called accounting tricks including the infamous practice of “earnings smoothing”, and cunning press releases by investor relations people worthy of preparing the type of propaganda normally employed by countries like North Korea.

And think about all those GE alumni who were elevated to CEO roles and then failed, in so many companies over so many years. Check out their names here. Remember Bob Nardelli?

So how come so many analysts got it wrong for so many years, even with all those fancy Ivy League MBAs? And how come the journalists fell for it all hook, line and sinker for so long? Shouldn’t they have rumbled the schemes behind the perfect GE financial news that continued over such a suspiciously lengthy time?

We’ve seen this stuff before. Marissa Mayer pulled off the same act at Yahoo for many years, presiding over a long series of losses yet still being seen as a heroine. How about Carly Fiorina at HP? The list goes on. Is there something deep we’re missing here about leadership? Something almost all of the analysts and journalists don’t see? Is there, to put it in today’s lexicon, a systematic bias in the thinking of the people we hire to analyze and write about top business leaders? If so, what is it?

Here’s what I think. The failures of the many leaders in GE, not to mention many of the other leaders I mentioned, are in business acumen, or the lack thereof. They were able to lead huge companies and had all the right leadership capabilities to do that, such as vision, inspiration, financial knowledge, social skills, team leadership and so on. But they didn’t have business acumen.

What! You might say; surely, they all had glorious MBAs from the best business schools, and they were all advised by the smartest financial engineers and lawyers in the room, not to mention our fair land. If you had such an incendiarily high level of such financial knowledge, wouldn’t you automatically mint the old moolah? How couldn’t you when you know so much?

But financial knowledge doesn’t mean you have business acumen. Having a high degree in business, finance or whatever doesn’t mean you have the street smarts that you need to make money. If behavioral economics and finance have taught us anything it is that we all – and I mean everyone – have unconscious biases and filters of which we are usually unaware. That goes also for business luminaries like Welch, Mayer and Fiorina.

In fact the record shows us that it might be worse for such people because they are over-confident from the get-go, and have often partaken of a strong narcissism cocktail; I’m looking at you, Elizabeth Holmes (of Theranos infamy).

A couple of things to ruminate about. If you have high business acumen, you can still lose money. Maybe you’re starting off a new company or inventing a new market. And, here’s the big learn; you can still make money even if you have low business acumen. How? Under-spending on R&D and customer service; subsiding sales (GM before the Flood); messing with the financials; and so on, ad nauseum.

That often happens when you’re the CEO of a big company whose profit model was set up long before you came to the helm. You just followed the yellow line in the middle of the road. You didn’t invent the business model; you just inherited it.

Sounds like GE, right? And numerous other companies. What you needed to run those companies was not business acumen; it was a great pedigree, good self-promotional skills and the ability to stay with the program.

BTW spare a thought here for leaders in government - local, regional, State, Federal, all government leaders in the world. Think about all those rising deficits, criminally under-funded pension plans, not to mention outright corruption. How about doing something to select government leaders who possess at least a smidgen of business acumen. Or will taxes keep on rising until they exceed GDPs?

In leadership development and education these days there’s a belief that if you have the right level of emotional intelligence, the right amount of social and team-building skills, you’ve got it made as a leader. Being “authentic”, whatever that means, is a plus. There are even leadership scales that measure how authentic you are. Now I’m not knocking people who are authentic and have high ethics. But I for one take as granted that I want you to make money as well. Is there anything wrong with that?

My company has developed assessments to measure the level of business acumen of managers and executives. We’ve done many thousands. The results are in. Of any sample you take, be it of the lowest- or the highest level of employees – right up to and including the CEO - 12% measure as having enough business acumen to reliably make money. Another 44% will have enough business acumen to break even or thereabouts. The final 44% will reliably lose money. That goes for the CEO as well as the office boy.

Of course, if you have a Wharton MBA, you will say you are too smart for that to happen to you. GE shows the falsity of that position. It seems that there is a correlation between being very smart and having low business acumen. Our data suggest strongly that the higher your educational level, the lower your business acumen. Mmmm, remember it was Dr. Welch, not Mister, when you want to argue about that.

The people who break this mold seem to be founders. There’s a big difference founders and professional leaders in big companies. The professionals all have fancy degrees, and they are book smart. The founders often don’t have any degree, and they are usually street smart.

Big companies like GE often hire book smart show-ponies from big name and Ivy League schools who look great on paper but often lack common-sense. Founders – well, you know – they’re all over the place, often embarrassingly ill-educated, even sometimes somewhat uncouth. Maybe we need a bit more of that in the top ranks of our Fortune 500 and less polish? Less Jack Welch and more Elon Musk maybe?

Maybe I’m preaching an impossible ideal? If you think that, check out the book by the founder of Bridgewater Associates, Ray Dalio. He was a founder, unquestionably was a great leader and had high business acumen to boot, in spades in fact. OK I got something wrong; he had a Harvard MBA. So maybe education doesn’t knock all the business acumen out of you if you already have it.

So, what’s the lesson here? If you’re into hiring, selecting or developing leaders, figure out how much business acumen they have, not just how educated, articulate or emotionally intelligent they are.

In the end, the investors and shareholders want the beef too.