🔢 Key Takeaways
- Former GE CEO Jeff Immelt provides insight into crisis leadership and addresses the challenges faced during his tenure. Despite successes and failures, GE's drastic market value drop shows the need for ongoing adaptation in industry.
- Despite controversy surrounding his tenure at GE, Jeff Immelt's new book, Hot Seat, offers insight into his leadership style and the challenges faced during his time as CEO.
- Jeff Immelt, despite his appealing background and significant contributions to various divisions at G.E., faced setbacks during his tenure as CEO. However, he identified G.E.'s healthcare inventions as some of his proudest achievements.
- To succeed in today's business world, conglomerates must have a strong technical foundation. Innovation is largely driven by data and analytics, and companies like Amazon and Alphabet have achieved success by prioritizing technology in their business strategies.
- Failure is a crucial part of career growth, and surviving it can lead to success. Companies may experience volatility, but this doesn't necessarily indicate failure within the organization. Learning from mistakes is essential for personal and professional growth.
- Being a CEO is a tough job. Leaders face constant change and must make difficult decisions with incomplete information. Success requires adapting, taking risks, and learning from mistakes.
- Amidst crisis, it's important for leaders to recognize the need to adapt and make tough decisions, but also not to lose sight of the bigger picture and long-term goals. Being prepared for volatility is crucial for success.
- Immelt's approach to selling GE story, lack of enthusiasm for financial-services, and reliance on unsecured debt contributed to GE's struggles. New regulations, like Dodd-Frank, further compounded challenges for the company.
- Through difficult times, it is important to stay committed to what is working and appreciated by customers, team, and investors rather than playing the victim.
- Through his focus on exporting and relationship-building, Jeff Immelt helped create jobs and competitiveness for the country, but faced challenges amidst a changing political climate and distrust of big corporations.
- Political policies that do not address the concerns of small and medium-sized businesses can have significant consequences, such as lower tax revenue and political instability. Effective policies should stem from communication and collaboration with business owners.
- Jeff Immelt defends his performance as General Electric CEO but admits to mistakes leading to the company's downfall. He emphasizes the importance of effective leadership and a preference for less regulation to support small- and medium-sized businesses.
- Jeff Immelt stepped down from GE voluntarily and stands by the company's efforts to comply with the law. Although there have been hardships, Immelt remains committed to the company and its shareholders.
- Jeff Immelt, former CEO of GE, shares his regrets and aspirations for future leaders. He hopes his experiences serve as a cautionary tale and teaches leadership at Stanford while working as a partner at a venture-capital firm.
📝 Podcast Notes
Jeff Immelt on Crisis Leadership at General Electric
In his book, former General Electric CEO Jeff Immelt shares his experience with crisis leadership, offering context for the story of his tenure and the truth behind it. Immelt identifies the current state of all leadership as crisis leadership and asserts his ability to offer valuable contributions to this debate. While his time at General Electric was marked by volatility and change, Immelt admits to both successes and failures, highlighted by the company's drastic drop in market value during his tenure. G.E. was once the biggest private employer in the region and a symbol of American industry, but selling off body parts has been necessary for the company to survive in recent years.
Jeff Immelt Defends His Leadership in New Book Amidst Financial Fraud Allegations at GE
Jeff Immelt's tenure as CEO of General Electric was marred by allegations of financial fraud and erratic decision-making in the company's portfolio. Immelt was criticized for placing bad bets, including bulking up in the oil-and-gas sector just before oil prices crashed. However, Immelt defends his performance and attributes some of G.E.'s decline to the exposure of the company's standard practice of fudging the numbers, which dates back to the Jack Welch era. Immelt's new book, Hot Seat: What I Learned Leading a Great American Company, is a defense of his leadership. He admits that time away from the intense C.E.O. job has given him more time to think but still has a desire not to trash people. This interview with Immelt is part of an occasional series we call The Secret Life of a C.E.O.
Jack Welch's Successor and Jeff Immelt's Leadership at G.E.
Jack Welch's ultimate success at G.E. was determined by how well his successor grew the company, but he refused to comment on Jeff Immelt's leadership after he retired. Immelt's background growing up with a father who worked at G.E. and his education at Dartmouth and Harvard made him an appealing choice for Welch. Immelt's contributions to G.E.'s Plastics, Appliances, and Healthcare divisions were significant, but his tenure as CEO was plagued with challenges and setbacks. Despite this, he identified G.E.'s healthcare inventions, such as the ultrafast C.T. and handheld ultrasound, as some of his proudest achievements.
The Importance of a Technical Foundation for Successful Conglomerates
The intersection of technology and problem-solving has always been great. General Electric was once an industry innovator, with many patents filed and investments in technology. However, the majority of innovation today is driven by information technology, data, and analytics. While GE invested in a software vision to harness customer and machine data, it did not work out as planned. The era of conglomerates that do different things like GE is over. Today, conglomerates must have a technical foundation. Companies like Amazon and Alphabet have scaled to success because of their technical foundation. To be a successful conglomerate today, a technical foundation is a must.
Separating Natural Volatility from Business Growth: Lessons from Jeff Immelt's Experience at General Electric
Jeff Immelt, the former CEO of General Electric (GE), believes that natural volatility must be separated from a company's core business growth. He admits that industries like aviation can suffer drastically in bad times, but that doesn't necessarily indicate failure within the company. Immelt describes his near-death experience at GE, missing his annual earnings estimate by $50 million and receiving criticism from CEO Jack Welch while at a manager's conference. However, he learned from this experience that surviving one's failure is crucial and part of a career growth. He emerged by becoming famous for hitting company targets. Postmortems reveal that some of GE's earnings were inflated through aggressive accounting, but Immelt says he learned how to operate and invest in growth from GE.
Challenges and Lessons of Being a CEO in a Changing World
Former G.E. CEO, Jeff Immelt, discusses his tenure and the challenges of being a CEO in an ever-changing world. Despite G.E.'s rigorous accounting practices and regulatory oversight, the pressure to make important decisions with incomplete information can be daunting. As the world faces more tail-risk events like 9/11, Fukushima, the financial crisis, and Covid, leaders are constantly navigating uncharted waters. The primary lesson here is that being a CEO is a difficult job that requires constant adaptation and a willingness to take risks and learn from mistakes. It's not for the faint of heart, but those who are up for the challenge can make a difference.
Jeff Immelt's Leadership Challenges at GE: From 9/11 to Covid-19 Preparation
As the CEO of GE during the aftermath of 9/11 and Enron, Jeff Immelt faced immense challenges, from navigating a new world with no trust to making tough decisions regarding lending money to struggling airlines. Despite the initial panic, he recognized the need to retool their industrial businesses and reinvest in technology, while also working towards making GE Capital smaller. However, the pressure to continue growing earnings-per-share and hit dividend numbers led to a missed opportunity to reset the company. And even with preparations for Covid-19, the importance of being good at volatility cannot be understated.
Jeff Immelt's Leadership Style and GE's Challenges amidst Financial Crisis
Jeff Immelt's leadership style differed greatly from his predecessor Jack Welch, which became evident during the financial crisis as GE's reliance on GE Capital led to significant challenges. Immelt's quiet approach to selling the GE story and his lack of enthusiasm for the financial-services arm contributed to the company's struggles. Additionally, GE's wholesale-funded finance company model, relying on unsecured debt instead of deposits, made it susceptible to the 2008 financial crisis, resulting in significant disadvantage and permanent challenges. Immelt believed that new regulations, like Dodd-Frank, directly targeted GE due to their combination of a financial institution and industrial arm.
Jeff Immelt's Commitment to General Electric Through Trying Times
Jeff Immelt's love for General Electric was so strong that he got the company's famous circular logo, known as the 'meatball', tattooed on his hip along with his wife's and daughter's initials on top and bottom respectively. During the financial crisis of 2008, Tim Geithner suggested splitting off G.E. Capital from G.E., but Immelt believed it was not possible at that time. Geithner may have suggested this to make G.E. a Fed-regulated entity due to the size of G.E. Capital. However, Immelt never played the victim and continued to execute the strategy that was working and appreciated by customers, team, and investors.
Jeff Immelt's Leadership at GE: Streamlining and Reshaping with Mixed Results
Jeff Immelt's leadership at GE was characterized by his attempts to streamline and reshape the company's focus, but his investments and divestments were not always successful. Immelt tried to position GE as a good global company that knew how to make money in and for other countries, but his tenure coincided with a changing political climate in America and distrust of big corporations. However, GE's focus on exporting created jobs and competitiveness for the country, and Immelt's approach to diplomacy and relationship-building with heads of state was key to the company's success.
The Challenges and Ramifications of Exporting for Businesses and the Country's Growth
Exporting is essential for the growth of a country, but it is a hard and unsustainable practice. The Obama administration's lack of empathy towards the business community had significant ramifications, including the election of President Trump. G.E. was one of the many big American companies contributing less to tax coffers due to their international operations. Both the Democratic and Republican parties make life difficult for small and medium-sized businesses, with their excessive regulations and volatility. To truly understand the struggles of these businesses, we must talk to them and create policies that address their issues.
Jeff Immelt Reflects on GE's Downfall and His Leadership Role
Jeff Immelt, former CEO of General Electric, discusses the downfall of the company and his role in it. He defends his time as CEO, citing the almost $300 billion of earnings and cash generated, along with being number one in their industries and setting up a global foundation. However, he acknowledges that the ending was not what he wanted and admits to making mistakes, such as underestimating the volatility of G.E. Capital and not having strong leadership in place at G.E. Power. Immelt also touches on his political beliefs, stating a preference for less regulation and helping small- and medium-sized businesses. He does not support the events of the last 6 months and did not vote for Donald Trump.
Jeff Immelt's Departure from GE and his Reflection on the Company's Challenges
Jeff Immelt's stepping down as C.E.O was possibly in the best interest of the company, and is a decision that he himself made. Despite the hardships he faced, his concern for everyone at the company was always evident. With regard to the current state of the company, although things have gotten worse, Immelt stresses that they had tried their best to comply with the law, by ensuring transparency with their board, hiring the best auditors, among others. He acknowledges how former shareholders' disappointment and heartache is understandable, and sympathizes with them. Immelt adds that he had never sold a share of GE stock and still owns a lot of it today.
Jeff Immelt's Regrets and Aspirations
Despite a successful career in which he was paid very well at GE, Jeff Immelt feels guilt for the company's current state. He teaches a leadership class at Stanford and focuses on technology and healthcare as a partner at venture-capital firm New Enterprise Associates. Despite enjoying his current professional career and family life, Immelt thinks about his mistakes and wishes he had done things differently every day. He admits that every job looks easy until you're the one doing it, but he hopes his own experiences can serve as a cautionary tale for others.