Mon, 24 May 2021
Jeff Immelt is the former CEO of General Electric and author of the new book: Hot Seat: What I Learned From Leading A Great American Company.
Jeff has had a lot of critics over the years and stepping into a role after the legendary Jack Welch was not an easy task. In his 16 years leading GE as the CEO he had to lead the company through 9/11, the financial crisis, and the 2011 meltdown of the Fukushima’s nuclear reactors--which were designed by GE. He definitely knows what it’s like to lead under pressure.
Why Jeff wrote his book (he almost didn’t)
Jeff, who is also a Lecturer in Management at Stanford University Graduate School of Business, says that his students don’t want to learn from a perfect leader who has everything figured out. These students have lived through financial crisis, Covid, and turbulent times---they want to know how to survive through volatility and what to do when things don’t work out. Because of this he felt like there was also an audience for his book that wouldn’t necessarily care about GE.
Those are the two main reasons he wrote his book.
If there is one message that Jeff would like his critics to take from the book it would be that there were people in the company that tried their best and did perform well.
“If you look at cumulative earnings, market share, you know, if you go back to 2016, this was a top 20 market cap company. It was number seven on Fortune most admired, it was number one on companies to hire leaders. We were leaders in digitization and globalization, you know, but the stock didn't work. succession planning didn't work, there were things that didn't work.”
He says it would be one thing if the criticism was just about him, but there are thousands of people that have been hurt through this process, and this book sets out to correct that.
What was it like working with Jack Welch
Jeff says Jack was challenging, giving, and creative. He was someone who liked to portray himself as “tough as nails” but Jeff says that’s not the person he saw. He was one of the best leaders to run something at scale and he was a great communicator.
Jeff says this about taking over for Jack, “But by the end of the 90s, it was a company where perception didn't equal reality. We were 50% financial 50%, kind of an old industrial company. We traded like Amazon at a 50 P/E. And so kind of following him, you know, the trick was to drive the appropriate kind of change, while never looking backwards and never casting blame. And that's challenging. Look, it's easier to follow a jerk than it is to follow, you know, the best leader of the previous century. Right. But I never wanted to be him. I never wanted to act like him. And I felt like the company needed change.”
While there were elements of his leadership style that were timeless, like his focus on people and metrics, there were also some elements that wouldn’t work well in an organization today. Jeff says that Jack didn’t really respect technology and he had an element of short-termism, that with the pace of change, would be a problem.
Jack also believed you shouldn’t do anything as a leader unless you can control it, but as Jeff shares there are a lot of things that as a CEO of a public company you just can’t control.
“I think, you know, the trick with every generation of leadership is to pick the things that travel that work, and pick the new things that have to be part of, you know, making a company vibrant and competitive in the next generation. And so I think that's the way I would assess how much would work and how much wouldn't work in this generation.”
What was it like leading a company during 9/11
One thing he says he learned from that experience was that leaders should be shock absorbers of fear, not accelerants of fear.
“You learn to hold two truths at the same time--that things can always get worse, but that things can also have a future and you need to focus on that. You have to communicate like, hourly, daily, and we did a lot of that.”
And in times of crisis leaders have to be able to take action, some decisions will work well and some won’t, but there are things that have to be confronted right away.
During 9/11, the financial crisis, and Covid leaders had to find a way to lead without a playbook. How do you do that? Jeff says it starts with surrounding yourself with people you can trust and talk to. After that it is important to have a sense of timing and an idea of what tasks need to be prioritized and what things can be left for later. And the last thing that leaders in tough times have to be able to do is deal with criticism.
“When you don't have a playbook you have to be willing, when people say wrong things about you, you have to be very contemporary with it with the respect of owning the narrative and controlling the communication, and things like that. Because they can set you back so good leader's flexible point of view. Learn every minute of every day, and be willing to push back when people get it wrong.”
How Jeff deals with imposter syndrome
It is also important to have friends around you who will encourage you, cheer you up, coach you, and pick you up when you’re down. And you can only build these friendships in normal times, you can’t wait until times of crisis to build these friendships--at that point it’s too late.
A strategy Jeff has used to be a more effective leader
Because of this skill GE was an early player in globalization, digitalization, environmental investing and much more.
Jeff’s advice for current and future leaders
“Frequently I go to a CEOs office, and I'm always looking at their wall to see what connects them to the frontline worker. And if I walk in an office, and it's just artwork, and statues and crap like that, then I don't believe what the value statement says. I'm looking for, like, a picture where they were walking the floor with a nurse, or a picture of a jet engine or something like that.”
Advice that Jeff received early on in his career was to make sure, no matter how big of a company he worked for, that he connected with the people there and knew how they got their work done.