HOT SEAT: Former GE CEO Jeff Immelt

GE, a company founded by Thomas Edison, was 109 years old when Jeff Immelt became CEO. His new book (with Amy Wallace), “Hot Seat: What I Learned Leading a Great American Company,” covers his 35 years at GE, 16 of which he spent as CEO. Since leaving GE, Immelt has experienced “periods of despair, embarrassment and anger.” But understanding this time and the man who led the company through it gives a lot of insight into the same kinds of problems other legacy companies face, even if public scrutiny hasn’t caught up with them yet. This post delves into universal themes included the book and in our recent interview. 

For a time, GE was a client of Science House. In 2015, Jeff Immelt and I gave keynotes at the same IT leadership conference at a Florida golf resort owned by Donald Trump, who had not yet announced his presidential run. I thought about that day when reading a HOT SEAT passage about GE’s NBC acquisition. Jeff Zucker, President and CEO of NBCUniversal, wanted to do a reality show with a man who later took the medium to the absolute pinnacle, turning the entire world into his set and millions of people into characters in his quest for total drama. At the time, when Immelt went to play golf with Trump at his Florida golf course, the master of melodrama said, “You realize I’m the richest golfer in the world?” and then got a hole in one. 

“It was not lost on me that NBC, and by extension GE,” Immelt wrote, “would later catapult Trump into the White House.”  

After I delivered the keynote for GE in Florida, I flew to Colorado Springs to work with another client in time for an evening of frozen fog. These two images were captured on the same day. It’s hard to picture ever traveling this much again for business. 

Many business books begin in the glow of the halo effect. Not HOT SEAT. 

“My legacy was, at best, controversial,” Immelt wrote. 

One of the best illustrations of the halo effect comes from Immelt’s famous predecessor, Jack Welch, who was “charismatic and seductive,” Immelt wrote, as well as “bombastic, dramatic, direct” and “blistering and charming.” Later, it became publicly clear that many of GE’s problems began under Welch, who favored the Six Sigma technique over a culture of innovation. Six Sigma is a data-driven methodology invented by a Motorola engineer, used to eliminate mistakes. This is important for a company like GE that needs to keep aircraft engines and MRI equipment functioning. Immelt, however, says that under his leadership he wanted the company to respect engineers again. Mastering the tradeoff between the need for process and the need for innovation is the key to the entire process. Many of the obstacles on this path can be fixed with practice, but leaders delay this need as a “soft skill.” The problem is rarely the technology or even the architecture itself. It’s the way people are organized to do the work. 

Before Immelt earned his MBA from Harvard Business School, he studied applied mathematics at Dartmouth University. His bachelor's in mathematics, he has said, is the more valuable of the two, and the one he used every day as CEO. He grew up in Cincinnati with a mother who taught third grade and a father who worked at GE and taught Immelt that “the worst kind of boss criticized all day but never offered solutions.” When Immelt started his own tenure at GE, his first salary was $30,000 a year. 

After a circus of a succession process, an “all-out cage match” Immelt describes as “contentious, distracting and weird,” Immelt’s first Monday as CEO fell on September 11, 2001. GE was tangled up in every aspect of the disaster, including holding all the reinsurance on 7 World Trade, the forty-one story building that crumbled along with the Twin Towers. Today, he teaches a class to Stanford Graduate School of Business students about systems thinking and navigating uncertainty--a subject close to my heart and the focus of the keynote I gave about applying imagination to real problems at the GE event in 2015. 

“Systems thinking helps leaders see what others don’t see,” Immelt said, “and ideally identify opportunities before others do.”

HOT SEAT delves into the specifics of what happened with GE Capital’s complex business model in the aftermath of the collapse of Enron (a company with integrity as one of its stated core values). Immelt says he decided to write his book when Fortune published an article, What the Hell Happened at GE. 

“Few corporate meltdowns have been as swift and dramatic as General Electric’s over the past 18 months--but the problems started long before that,” wrote author Geoff Colvin (also the author of HUMANS ARE UNDERRATED: WHAT HIGH ACHIEVERS KNOW THAT MACHINES NEVER WILL. Link will take you to a video of Colvin discussing his book). 

“I got myself in trouble,” Immelt told me, “because I didn’t say, ‘I don’t know.’” 

Fix Your Meetings

When I asked him what he would do differently if he could do it all over again, fixing meetings was high on the list. Since Science House is in the business of fixing meetings (not just making them shorter or skipping Fridays but deeply aligning business value and role and process clarity for less stress and better outcomes) I asked what he thought could be done. The desire for consensus overcomes the need for speed, he said. 

“I worried about people getting along with each other,” he said. “Companies spend a lot of time sanding rough edges.” There are four types of people in meetings, he said: 

• Switched on and focused, equally good at making relevant points and listening
• Talks too much, drowns the room in detail and leaves little space for opposing views
• Quiet people with valuable insights, need to be encouraged to contribute
• “Silent and smoldering” they believe they are smarter than others but can’t be bothered to debate.”

“Finding a way to streamline meetings is a necessity,” he said. “Reimagining the way work gets done. It’s not that people don’t do the right thing. They are just too slow. Get the right information to the right person at the right time. Out of 300,000 people, there are maybe a hundred willing to make decisions. Many people have no accountability or expertise but they want to be stakeholders and show up for meetings. When you have momentum going the right way big companies are amazing. The right leadership with the right process at scale is amazing.”

On Leadership

“Leadership is an intense journey into yourself,” Immelt wrote. “No one had a decision manual that spells out how to make difficult decisions.” 

Leadership, Immelt wrote, requires facing three questions: 

• How fast can you learn?
• How much can you take?
• What will you give to those around you?

“Knowing what to do is often easier than knowing when to do it,” he wrote. “Leaders can’t afford to be indecisive. There is nothing more frustrating to a team than when its leader thinks out loud but cites caution as a reason not to act. That kind of dithering causes companies to fail. Making imperfect decisions in the pursuit of progress always beats the alternative: letting fear of blame stop you cold.” 

He has an appreciation for operators because of his father. 

“When my father had a good boss the whole family felt it, and when he had a bad boss we felt it. I knew the impact decisions can have on the whole family. Good leaders know how work gets done.” 

When Immelt took over at GE, 81% of leadership roles were filled by white men. He wanted to create an “operating system” around diversity and inclusion. Immelt gives examples of the microaggressions he perceived and addressed based on gender and racial stereotypes. He made a tremendous shift away from this trend and his book is filled with examples of the difference made by inclusion, resulting in 40% of leadership positions being held by white men when he left. From Beth Comstock’s brilliant thinking on IMAGINATION AT WORK to Lorraine Bolsinger being tapped to lead GE’s sustainability focus, Ecomagination, and immediately demanding funds to grease palms and eliminate the predictable squabbling over budget limitations. Immelt praises Susan Peters’ work in reimagining Crotonville, GE’s legendary training facility and “the heart and soul of GE.” Peters’ group of HR professionals tasked with getting people out of their comfort zones and evolving leadership styles once held an annual prioritization exercise in the Imagination Room of Science House. 

“Women are more willing to try new approaches to solving problems,” Immelt told me when we spoke last week. “They are better able to commit to a shared vision.” 

A woman he wanted to promote to officer turned him down because she had kids in high school. 

“It blew my mind,” he told me. Later, she ascended and had up to 40k people working for her. “No man ever would have made that choice. Women often have an external focus and they are comfortable in settings they aren’t dominating. And they are curious.” 

Women also tend to have an underrated but critical management skill, he said: buying time through partnerships. 

Universal Challenges

Some of the HOT SEAT ideas worth exploring at your company: 

• Outsourcing IT. GE outsourced IT to India, and over time the company’s IT leaders lost the skills to be technologists and became managers instead. This left GE with a talent gap for AI and data analytics, “two things that would be the guts of our products and services in the future.”
• Accountability. The idea of holding engineers and salespeople mutually accountable is an extremely important one and one that is often overlooked as overzealous salespeople incentivized by volume and speed sell solutions engineers can’t possibly deliver within the timeframe and parameters promised. 
• New talent. Attracting new talent created “GE antibodies.” Existing talent felt threatened and resented higher salaries of newer employees. The burn rate didn’t match GE’s culture. The leaders recruited to lead GE Digital are all in great places elsewhere now. “Transforming a big legacy company requires perseverance.” 
• Consequences. “In [a crisis we] did our best teamwork because every decision had huge consequences.” This is true now during the pandemic, but should be an ongoing practice for all companies. 
• Industrial vs. digital. Slow vs. fast, deliberate vs. agile, risk averse vs. risk taking. It’s not one or the other. It’s managing the line between both at the same time, and it’s possible as long as leaders really understand how work is being accomplished and how people feel about the work they’re doing. At Science House we train cohorts within many of our client companies (GE was not a client of this service) to be half investigative journalist and half entrepreneur to solve this exact problem. We did a training via Zoom on Friday for a new member of one of our cohorts, and I was staggered to realize this company has done 4,000 interviews in the time we’ve been partnered for delivery of our Sense & Adapt program. They have gathered so much data that it’s twice the length of War and Peace. And most importantly, they actually work differently as a result. 
• Lighten up. Immelt’s descriptions of the NBC comedy 30 Rock regularly mocking GE made me laugh. “The acronyms,” he wrote, and even Six Sigma with the tenets of “teamwork, insight, brutality, male enhancement, handshakefulness and play hard.” No GE initiative was safe from 30 Rock, “even Ecomagination. Saving the earth while maintaining profitability.” The mascot Greenzo, played by David Schwimmer, declared GE “America’s first non-judgmental business-friendly environmental advocate.” The show’s writers even reached out to find out about products they could make fun of. When 30 Rock went off the air, GE took out an ad thanking them for seven years of laughter. While it’s funny, there’s a deeper truth in this. Too many companies take their own words and acronyms way too seriously and replace the idea with the words. Enron having “integrity” as a core value is a perfect example but there are many others, especially when it comes to culture initiatives that sound good don’t match the reality for many workers, or management techniques that replace critical thinking. 
• Leading through a disaster. “Even in the midst of a crisis you should pay attention to all the data that’s coming in, even data you don’t expect. Clues are everywhere.” 
• The evolution of China. “China transformed itself from the world’s factory to an economic superpower. Guanxi is a Chinese word for the system of social networks and influential relationships that facilitate business,” Immelt notes. He also said China commands respect as an intellectual hub. “China stakes a position (such as solar) and the rest of the world follows. “Where China goes, increasingly, so goes the world.” I was struck by how this is especially important to understand as China creates a pervasive surveillance state and fosters a different mindset of ethics in the realm of science and engineering but “graduates more engineers than the US and Europe combined.” 
• Root out bureaucracy. Ask simple questions. “Who do you work for? If you have more than one boss, that’s a bad sign.” Understanding clear, simple success metrics. “Instead of solving problems sometimes you merely review them more frequently.” By 2012, GE was bloated. Complexity morphed into dysfunction. “Bureaucracy was killing us.” High costs, low engagement and slow movement go together. Role clarity is important. 
• Succession planning. “Succession is about the future, not the past. The successor needs to articulate a vision for the future. The board’s job is to choose for the future.” I asked him how boards get educated. “Right now it’s a lot of box checking. Boards need to do more work out of sequence, alone or in groups of 2 or 3, without the CEO. If the board trusts the CEO and the CEO trusts the board. Learn more about the company and meet frontline managers. Envision the company on the worst day, not the best day. Understand how people work in a crisis. Understand how people work. Not just leadership.”
• Modernization. It’s not just for technology, it’s for the way companies think and act. “Legacy companies need to be a docking station for startups to plug into,” Immelt said. 
• The story in the data. “So much is put on metrics and not enough on the idea.” 

In 2005, Immelt got a “GE meatball,” the company’s logo, tattooed on himself along with the initials of his wife and daughter. He structured his life around family and work.