Transcript: GE CEO Jeff Immelt on Fortune’s The Chat

First up, General Electric (GE) Chairman and CEO Jeff Immelt. He leads a company with $146 billion in annual revenue, and 307,000 employees. GE is No. 9 on Fortune’s Most Admired Company list. In April, GE announced the biggest pivot in its history: a move to refocus on industrial businesses and sell its financial assets. This is Immelt’s first sit-down interview since that big announcement. Jeff, welcome.

JEFF IMMELT: Pattie, thanks, it’s good to be back with you. It’s good to be at Facebook. It’s really an honor.

SELLERS: So Jeff, I think the required first question is, what is the new GE?

IMMELT: You know, so it’s always appropriate to be at a great new company like Facebook to reflect on a company that’s 140 years old that also was founded by another great innovator, in our case Thomas Edison. So the ability to sustain, to change, to continue to evolve always has to be a part of what longstanding companies are about. So when you think about where we are today, GE is a high-tech infrastructure company.

We’re the biggest infrastructure company in the world. We are kind of the engine of economic growth around the world. So people need electricity, they need transportation, they need aviation, they need water, science around that. And that is really the context for the company. We have a fantastic technical footprint. We do business in 175 countries around the world. And we’re making big investments in the intersection between physics, which is the history of the company, and the new analytical and digital world. So that’s really the company. Connected, digitized, industrial infrastructure company.

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SELLERS: So, you are becoming an industrial company first and foremost with a large piece of your business, still, in financial assets. When you’re done with this restructuring, how will it look different?

IMMELT: So we’ll be about a $135 or $140 billion dollar company. Maybe $10 bilion of that is financial services. So we will only do financing around the GE assets, around the GE markets. So, in energy and aviation and the markets we know. And the rest is really kind of a high-tech industrial infrastructure company. Which is not new to us. You know, a lot of these businesses we’ve been in for decades. I just think it’s been the context of what we’ve built over the last decade.

I’m probably one of the few CEOs in the history of the world that has done $100 billion dollars of acquisitions, and $100 billion dollars of dispositions. So, we’ve really kind of reshaped the company in a way that I think fits the 21st century. And if you want to stay around a long time, you’ve got to change, right? So, the nature of being a longstanding company is the ability to continue to pivot and grow and find new fields. And be excellent at the things you do while continuing to evolve and change.

SELLERS: And what was the trigger for this pivot?

IMMELT: Oh look, I mean I think the world changes dramatically. If you think about the whole nature of financial services post-crisis, one of the big tasks that I have is just capital allocation, right? And the ability to get reasonable returns in financial services just was impossible for us. At the same time, our aviation businesses—a massively great business—our energy businesses, our renewable energy businesses, our gas business, our water businesses, our healthcare business. These were all highly investable, good growth businesses.

And it’s nature. It’s kind of one of the things that a business leader does, which is allocate capital, and transition capital from a slower growth business that we couldn’t generate good returns, into higher growth businesses that generate great returns. And in essence, more than anything else, that’s what it’s all about.

SELLERS: So we have the annual Fortune 500 List coming out. And we polled Fortune 500 CEOs and asked them what their greatest challenge is. And I’d like you to rate on a scale of one to 10 how serious you consider these challenges to be. The pace of technology innovation.

IMMELT: So one is —

SELLERS: One is not much at all. Ten is a serious challenge to you.

IMMELT: Well again, by challenge you could also mean opportunity.

SELLERS: Yes.

IMMELT: Ten.

SELLERS: Cybersecurity.

IMMELT: Seven.

SELLERS: Increased regulation.

IMMELT: Nine.

SELLERS: Shortage of skilled labor?

IMMELT: Four.

SELLERS: Competition from China and other developing countries.

IMMELT: Three.

SELLERS: Increased regulation. You’re having some fun in Europe right now, aren’t you?

IMMELT: Yeah, but I’ve done, since I’ve been CEO, 41 deals that have gotten approved in Europe. So it’s just a process. A year ago, we announced an acquisition of a big state owned French power company. So we had quite an interesting, I would say, dance in Paris just to get out of, let’s say, the initial brackets, the initial rounds to go into Brussels for approval. So I look at these things as just the process you have to go through. They tend to get politicized and publicized. But this is one we’re confident that in the end we’ll be able to get through. It’s just part of the game.

But we live in a world where wealth discrepancy—a real sense of haves and have-nots, where big institutions like GE have been and like Facebook is becoming—[is] challenged by our fellow citizens in society. When there’s unrest among people, governments get harder. And when people are unhappy and government gets tougher, you get more regulation. So Facebook’s a part of this world now as well as companies like GE. And I just think this is a secular trend, right? We are going to live in a world for a long time with more government intervention, more regulation.

It doesn’t do any good to complain about things like that. You just have to figure out. And it’s not going to end in an election or two. It’s not going to end in a day or two. This is just part of a big, I think, social trend. And it’s not just the US. It’s China, it’s Europe, it’s all over the world.

SELLERS: And what would be your message to Europe right now to help make Europe more competitive in the global economy?

IMMELT: Look at people your age. Young European talent wants to compete. They don’t want to leave their homes. They’re proud to be Europeans. They want a chance to build a future, an economic future. They think they’re as good as anybody in the world, and they are. So the European commission, the European Union needs to do things to help these people live their dreams. They don’t have a single digital market. They don’t have a single power market. There is no community like Silicon Valley that’s matched in Europe.

And so young people like you who are living your dreams here, they don’t have that opportunity in Europe. And that’s what they need to think about. They need to think about—you know, it’s easy to pick on a big company. It’s easy to kind of take on Google (GOOG) or take on GE. Put that aside. They should be thinking about what does a 22-year-old electrical engineer, graduated from college in Europe, what’s on their mind? What’s their dream? And if they did that, GE will learn how to compete in that world, right? If they set that as the bar, we can compete in that world. For talent, for everything else. So, that’s what they need to be thinking about.

AUDIENCE QUESTION: Hey, Mr. Immelt, thanks for coming today.

IMMELT: Who at Facebook do you call Mister?

QUESTION: My name is Rex and I’m on the media partnerships team. Last year you said you wish you had thought of SC. I was curious to see how disruptive Elon Musk, SolarCity and Tesla could be with their recently announced PowerWall.

IMMELT: So look, I’m a big believer that markets rule. In the end, it’s up to companies to adjust technology and trends, but that markets rule. Now we are a great energy company. We’re No. 1 in wind energy, gas turbines, everything else.

What was different about solar is the power generating piece, the panels—it’s a horrible business. It’s a money loser. It is a horrible business. We got fixated on the power generating piece vs. looking at the system, looking at the financing model, the inverters, all the balance of plan. And I think that’s why the initial wave in solar—the guys who made money—are the guys who put together entire systems, like Solar City. Now the good news is, we’re just beginning the game. We can catch up. We’ve already started doing things to catch up.

But we got too fixated on the piece that we were the most familiar with, vs. looking at the entire system. And you know, the worst thing to be when you’re a company likes ours is the incumbent. It’s to allow people to feel like they have safety or they have job security because they’ve always done things—vs. being paranoid about what Elon’s working on and what others are working on.

So it’s important for GE to be big in solar. It’s important for us to find which places fit the most. And the reference I made to what SolarCity’s done was they used the lousy panel market to their advantage, right? Now, storage is huge. Storage is one of the Holy Grails of all time, right? I differentiate storage from batteries. My hunch is that batteries are still going to be a bad business. Lots of competition from China, Korea, the rest of the world. But people that learn how to take inexpensive storage or inexpensive batteries and turn it into meaningful storage—if you can get 15 minutes of storage that’s economical, you can do a lot to help people get renewables on the grid.

If you can do eight hours of storage economical, you can use renewables for baseload. You can look at coal and other things and get them off the grid. If you can do that at $200 a megawatt hour—if you can figure that out,—come to work at GE, OK? Today the cost is about $500. So, what Elon’s announced is still not low enough cost. But if he can get it down the cost curve, it could be a great thing.

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SELLERS: Jeff, on September 7, 2001, when you stepped up to be chairman and CEO of General Electric, the stock was trading at $40 a share. This afternoon it was $27.50. Do you feel bad about that?

IMMELT: Oh sure. I mean, I think I’ve always believed in accountability and things like that. It’s just, the company needed to change. You know it’s just the transition the company’s on. At that moment in time, we were a 60 PE company. We had a PE that was orders of magnitude higher than Facebook (FB) is today, with half of our revenues from financial services.

So look, when I first became CEO, there was a difference between the image and reality, right? And where we sit today, the image and reality are aligned. This is a great company with a great future and a great profile. The people believe in the company. And that, at our size, takes time to do. But we’re very confident in the future of the company.

SELLERS: Four days after Jeff became chairman and CEO, two planes with GE engines flew into the World Trade Center and, of course, the world changed. And your stock has been flat—basically flat—for the last 10 years. I was just looking at the last five years; you’ve given shareholders about a 16% annual return to investors.

IMMELT: Doubled in the last five years and paid probably in that time period $150 billion of dividends.

SELLERS: Today, GE has a market value approaching $280 billion.

IMMELT: Yeah.

SELLERS: Facebook’s market capitalization, by the way, is just about $223 billion. Do you think Facebook will ever catch up to GE in terms of size and value?

IMMELT: Look, I root for Facebook everyday. But our plan is to make GE worth a lot more. So that’s the only thing I can really control. But I hope Facebook does awesome in the future. And you guys do as well, right? But I think all of you are here because you believe in a purpose what Facebook does. And the stock price is a derivative of that. It’s not a cause of that. And the people who work at GE are the same way. They believe in the purpose of the company, and the economics are what follows.

SELLERS: Jeff, we have a question from the Facebook universe from Shirley Powell in Atlanta, who asks: How difficult was it to succeed Jack Welch? And when did you feel that you finally came out of his shadow?

IMMELT: Look, I think the nature of GE is one where the institution is what matters the most. So I replace a guy that Fortune Magazine in the year 2000 rated the best manager of the previous century, right?

So, I’m stepping in—you know, that’s ominous, right? But I also took over at a time when 9/11 happened, China happened, Enron happened. The world changed. And I think people know that when you replace a famous person, you’re going to have to fight for your reputation outside the company. Inside the company, I never had to worry about a thing. Because people believed in the company first and foremost, and wanted whoever was leading it to be successful. So someday—and Mark Zuckerberg is awesome—but someday, there will be somebody else. And you’re going to want them to be unbelievably successful.

And that’s the way it was in GE. I’m just not the type of person that values myself in that way. In other words, I’ve never thought about being in his shadow. I never really wanted to be him. I never wanted to do stuff the same. I love him. I respected him. But I never wanted to do the job that way.

So the company today, we were 70% inside the United States. Now we’re 70% outside the United States. We’ve sold almost the entire company that was here when he was here. It’s a new place and a new day. We’re investing massively in analytics software. Changing the face of the company going forward. That wouldn’t even have been envisioned in the 1990s. So I’ve said this before, when you replace somebody famous, it’s always easier—as you guys manage your career—one piece of advice I can give you is: Follow a jerk, because that’s easier.

So, it’s a lot easier to follow somebody that’s bad. But if you follow somebody that’s good, you have to drive change every day, while pretending that nothing was ever wrong. And that’s kind of the way I’ve run the company.

SELLERS: What is the most important trait for a leader to be successful today? And has that changed in the last decade?

IMMELT: Pick one. Just pick one. I’d say, you need to be a learner. If you want to be successful, you’ve got to have an antenna up all the time, and you’ve got to be open to new ideas. You’ve got to be grabbing every new thought you can come up with. And you can never feel like you’re safe in anything you do.

A close second would be resilience. The notion when you’re running a company, that you’re in control—those days are over. You have to be ready to move in a world that is more unpredictable and going through such massive change. So, I would say: First, be a learner. Second, be resilient.

SELLERS: What leadership trait have you most struggled to have?

IMMELT: I think one of the things is, I’m just a much better risk manager. So when I think about judgment, you know I joined GE in 1982. From 1982 until 9/11, I had never really seen a black swan event in the economy. The U.S. economy grew 3-1/2 or 4% every year, inflation was low, the U.S. economy was the biggest in the world. There just wasn’t a lot of what I would call big risk events. In the last decade, I’ve seen a bunch of tail risk events, right.

So, if you talk to leaders in Brazil, they say they learned everything they learned about management in the early ‘90s in Brazil when you had hyperinflation and the currency was devaluing.

We don’t know anything about anybody in this room or anybody in Facebook when times are good. We know nothing about you. We only get to judge how good a leader you are when the projects are late, something is failing, somebody’s doing something wrong. And that’s the way you learn. So I would say I’m a much better risk manager than I was a decade ago.

SELLERS: You wrote in your last letter to shareholders, which you told me that you write that yourself.

IMMELT: The whole thing, yeah.

SELLERS: It’s good. It’s long, but it’s good.

IMMELT: There’s nothing worse than a math and physics major writing 5,000 words. It’s pretty brutal. The first couple of times.

SELLERS: But you did say—and I don’t know if you called it a flaw—but you said “mistaking tailwind for success.” Which is this very idea.

IMMELT: Yeah, it’s the mistake of mistaking tailwind for good management. Which is the notion [that] the moment you’re riding a wave is the moment you should be the most paranoid. So, the last time I was on this campus, it was Sun Microsystems. Scott McNealy was on the GE board; that was the last time I was here. So, I’d keep that in mind for all the young Facebook team to say that’s how fast it goes.

And I think it goes back to your other question. At scale, in a big company, the role of the GE team for the last decade has been to recreate it. We didn’t have momentum. We had to recreate the company. Never hiding from Fortune. Never hiding from anybody else.

But with a company that’s always close to a $300 billion market cap company, completely transition it. That was our job to do, right? And what everybody has to figure out is: What’s the task you have to make your company great in the area you’re in?

AUDIENCE QUESTION: Hi Jeff. My name is Maggie O’Donnell. I’m on the investor relations team at Facebook. I actually just joined here recently from GE Power and Water. So I’ve had the perspective of both companies and they’re two very different companies. What do you try to look to younger companies to learn?

IMMELT: I really am, like I said, a learner student. You know, we’re a company frequently that’s about scale. So if you think about we are a place that has 50,000 scientists and technologists and 50,000 sales people, we’re a big company with scale. We do things with really difficult technology. So when you go on an airplane and fly someplace, 75% of the time, that’s going to be a GE jet engine. That’s what we are really great at.

So I believe that one of the tasks of the company is: How do you make size an advantage and not a disadvantage? Where big companies go wrong, is when people that work there lose a sense of purpose. It doesn’t matter how old you are or how big you are, there’s got to be this sense from the top of the company through everybody in the company that they know their job is about markets, it’s about customers, it’s about delivering on purpose.

And so, one of the things I get inspired by when I’m at Amazon (AMZN), or when I’m at Facebook or when I’m in the valley, when I’m with a startup—we have equity investments, we’ve got a venture fund—is this sense of purpose.

So that is what I bring back. Not, you know, my job was to go to a meeting and have a good chart, right? It’s about my job is to win in the marketplace, to satisfy customers, to change the world. And I believe that as sincerely as anybody at Facebook believes that.

I always tell this story inside the company. My father worked for GE for 40 years. He worked in the manufacturing arena. He never came hone and said, “Boy I went to the best meeting today. I saw the best chart I’ve ever seen.” He said, “We won the Delta campaign. We won the F-15.”

The people who work for you, they care about winning—about a sense of purpose. And so, that’s what I feed on when I come here: Old companies have [that] to fear.

SELLERS: This question comes from Mary Civiello in New York. Do you feel like a fish out of water at Facebook? And how can GE complete for top tech talent when a lot of people think it has a stodgy image?

IMMELT: You know, I’ve got a 28-year-old daughter. I’m not as adept at social media tools as she is. I’m on Twitter—as a company, we have 4 million followers. So we use the technology and we have a team that does it personally.

I’m semi-literate but not as literate as somebody who’s grown up with it. But I think what’s important is, we’ve come out here, right? We’ve opened up shop in California. We have almost 2,000 software engineers and analytical people.

We are in the wave of capturing the data around our products. A jet engine has 20 sensors, a gas turbine at 50 sensors. We are going to be a legitimate player in what we call the industrial Internet because we need to be. We have to be. And we’re investing in platforms and applications to be a big player there. So I think when I joined GE, 95% of all of you would think about going to work at GE. Today, maybe it’s 60%. That’s just life. So we have to be setting up shops to collect some of you guys when you might be thinking about making a change and coming to work with us. And show you the neat things that we’re doing that can use a software background. If I took you guys on a field trip to where we design and manufacture jet engines, you wouldn’t think that’s stodgy. It may not be what you want to do, but it’s high tech.

SELLERS: You have a program at GE called FastWorks, which has come out of your exposure to Silicon Valley.

IMMELT: A book called The Lean Startup by Eric Ries, a lot of you guys have read it. It’s lean with a Silicon Valley twist, right? It’s about pivoting. It’s about trying things. There are now thousands of people in GE—we’ve renamed it, we basically worked with the author and some of his team. We kind of tailored it for GE. And now we have what’s called FastWorks, which in our parlance allows us to get to market faster. We do more co-development with the customers. We eliminate steps. We have venture funds inside businesses. And we probably cut the cycle time on our new products in half by doing that.

So again, I think it’s all part of the learning process. One of the aspects of FastWorks is this thing called a minimum viable product. It comes out of the software world. You guys probably do it all the time. Now you don’t want the jet engine on the plane you fly to be a minimum viable product, right? So there’s places we don’t go that the tools might be more natural for. But look, speed is important no matter what business you’re in.

And if you’re big and fast, you can beat companies that are big and slow. And you can also beat companies that are small and fast. So the aspiration for all of us is to use the leverage of size, the benefits of size, but still be fast enough to be competitive in the world we play in today.

And frequently, we have to be faster than other industrial companies. And we’re that.

AUDIENCE QUESTION: Hi Jeff…I’m always interested in very successful people who have rituals or daily routines to help keep their work life balance in check when things are so crazy. Do you have any rituals or routines that you live by to keep you steady?

IMMELT: I get up about the same time every day. I get up early. I go to bed early.

SELLERS: What time?

IMMELT: So I get up between 4:30 and 5:00. I run a very global business, so it gives me 30 minutes or 45 minutes in the morning to kind of scan the world. And then I kind of do three things at once. I exercise on like an elliptical trainer, read, and watch CNBC at the same time. So I get three things done at once. I probably do each at 90% capacity. No matter where I go, that’s more or less what I do. When I was your guys’ age—and I’ve always done a lot of traveling—I would say, “Where’s the nightclub?” Now I say, “Where’s the health club?” So, up early, scan the world, always blend kind of reading and exercise at the same time. And then kind of tackle the day.

I think what happens in your lifetime, guys, is as you build a good career, you’re getting mentally tougher each day. So the things that stress me out today, it really does take a lot to stress me out now. You kind of do your best, tell the truth. I don’t wear stress necessarily. You just kind of flush it out because…if you think about what Sheryl [Facebook COO Sandberg] does or what Mark [Zuckerberg] does, there’s so little, you know, that they can really control.

So the best they can do is learn how to react, learn how to lead, learn how to drive change. And that’s what I try to do. So I just don’t get overly stressed.

SELLERS: A decade ago, in 2005, Fortune’s Geoff Colvin, who still works with us, did a a profile of Jeff Immelt called The Bionic Manager and talked about your work habit of, I think since you graduated from Dartmouth, working 100-hour weeks. Is that right?

IMMELT: Occasionally.

SELLERS: Oh, just occasionally? Not every week?

IMMELT: Or frequently. I don’t want these guys to think I’m some kind of freak or something.

SELLERS: So actually, Jeff, in that story, you talked about the things that you were most uncertain of in 2005. And the two things were…healthcare made up 10% of GDP. Would it continue to be that or grow? And would U.S. manufacturing continue to exist in a significant way? I’d like you to comment on both of those uncertainties. And what are you most uncertain about today?

IMMELT: So, I would say healthcare’s going to be 20% of the U.S. GDP, and it’s going to be a big chunk of the global GDP. All of us are going to be working on healthcare the rest of our lives.
I would say that the Affordable Care Act—I’m not overly political one way or the other, but healthcare inflation has already ramped up to pre-reform levels. And we have most of our healthcare business is outside the United States. So we see incredible growth in every part of the world. The aging population—I mean, so much of healthcare is just demographics that it’s going to be almost impossible, I think, to keep healthcare from breaking 20% in the U.S.

Manufacturing story is completely different today than it was in 2005. Whereas 10 or 15 or 20 years ago, U.S. manufacturing was really losing its competitiveness in a big way, that has really come back. Some of which is just given how flexible the workforce is. A lot of it is technology. It’s 3-D printing. By 2020, probably 25% of the parts that are done inside a high tech GE are going to be done with 3-D printing, additive manufacturing and the like.

Which has really changed. We can basically make every product GE makes and do it economically in the U.S. today. Now, the extent to which we might do it in other places—because that’s where our customers are, that’s where our markets are.

But it’s not really about cheap labor. It’s really about manufacturing science. And then, what I worry about today is more geopolitical. It’s governments and how governments interact with each other.

When I became CEO there were no conflicts in the world. There are like 22 military conflicts in the world today. So you just have a much different macro and geopolitical environment that’s going to reshape the world. Is there going to be free trade? Is there going to be immigration? Where are those all going to take place? How government intersects with business would be the No. 1 worry I have today.

Not to get too GE-ized or too wonky, but…we’re a $21 billion dollar exporter, right? There’s 50 countries in the world that actually have export banks as part of their approach to the global economy. We’re probably at best maybe 50-50 chance that [the Export-Import Bank] gets eliminated in the U.S. If you had told me a decade ago that this would ever be something that a country would eliminate, I would have said you’re crazy. It’s never going to happen. But that kind of shows the ebb and flow of politics.

SELLERS: Jeff, we have a question from Dana Livingston Ward from Los Angeles: What is the most non-CEO task you complete at GE?

IMMELT: Oh look, I’m a big believer that there’s no job that’s beneath me, in terms of the company. So I‘ve never been one to really think too much about task and style. Probably the most un-CEO-like is, I like to go to Walmart and store-check to see where our light bulbs are placed. So I find that to be joyful.

But I think, besides that, if you came to our company, it’s a company of informality and access, right? This is a company where – maybe not quite like Facebook, but you walk through a factory, everybody is first name. Everybody has access to all their leaders all the time. And there’s an openness to the company that is classic. I’ll get in the Taurus a couple of times a month, in the front seat of a Taurus, and go to any one of our customers with a sales person and sit down and say, “I’d like you to buy our jet engine, please.” Shamelessly. Just sit in the office and demand an order. “I need an order, today, please.” So stuff like that.

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SELLERS: What’s the biggest mistake you ever made in your career?

IMMELT: Oh gosh, you know, for a long time we’ve been trying to execute the strategy you talked about on the first question. Which was really pivoting the company very significantly towards industrial and away from financial services. And we just got too slow. We started it but didn’t move probably as fast as we should have.

SELLERS: And what held you back?

IMMELT: Oh look, I think it’s just the sheer function of how many different things can you do at the same time? And not necessarily feeling that we had a narrow window to hit. There just weren’t a lot of people that predicted exactly what ended up happening in 2008 and 2009. And we weathered it, right? But it wasn’t that where we ended up was a lot different than kind of the general direction we’d been going more or less for the last decade.

SELLERS: Is this something you actually thought about before 2008?

IMMELT: Not as severe as where we ended up. But certainly having a company that was, you know, we were 50/50 industrial/financial when I became CEO. That wasn’t what I wanted the company to be. So it just could have moved faster.

SELLERS: So Jeff, you’ve been in the job almost 14 years now. How long are you going to stay?

IMMELT: Look, we are ready—a company like ours always has a great game plan for when is the right time to make changes at the top. We’ve always been a company that believed that the size and complexity of the company favors having somebody there for a long time, so that you get to know both people inside the company and outside the company. All that being said, you know I work without a contract. So there’s no moment in time where the board couldn’t fire me or do anything else they wanted to do. But there’s a right time. It’s not right now. But there’s definitely a right time to have a transition of leadership. It’s not right now, but it will be some day.

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SELLERS: Here we are at Facebook where Mark Zuckerberg will probably be CEO for a very long time. He’s the founder. Thomas Edison, not you, was the founder of GE. The average tenure of CEOs of the size of companies that we’re talking about here—the Fortune 500—is about six years. Is 15, 20 years generally too long? And is GE an exception by virtue of its size?

IMMELT: You know, I would say I’m the ninth chairman in a 140-year-old company. So do the math. You guys are math majors, so a longer tenure. And again, it’s a belief that, you know, in order for companies to be successful, you need a horizon that allows you to make big changes, when that’s required. Like what we’ve done the last decade. All that being said, we’re a performance company, and nobody has a legacy for anything, right? It’s not like people say, “Hey, don’t worry about it, you’ve got another five years. You’ve got another three years.” I’m paranoid every day about where the company is.

But look, there’s not one customer in the world that I don’t know better than any of my competitors. I probably personally know inside the company 5,000 or 10,000 thousand people. So I have an incredible access and connection with the people that work for the company. That’s important. And let’s say our aviation business is a $25 billion dollar global business, it earns $5.5 billion pre-tax. And every bet we make in that business will take decades to mature. So we’ve got a different business model than what you have in this room. And we’re making multi-billion dollar bets on products that are going to last 30 years. So there needs to be a horizon that matters.

SELLERS: Jeff, your aviation business is really interesting because from what I understand, 80% of the employees report up to women.

IMMELT: Work for a woman, yeah. We’ve never been a company that has tolerated that women can’t be manufacturing leaders, women can’t be engineers, women can’t be in sales. Women have all these jobs. So the biggest supply chain—82 factories in our aviation business—are run by a woman. The $5 billion military business is run by a woman. Aviation systems business, run by a woman. Distributor power business, run by a woman. One other point I’d make about aviation: I took over right after 9/11. The first five years I was CEO, the aviation business was horrible. I used to go and see investors and they’d say, “Why are you in the aviation business? The market stinks.” Stuff like that. Now that business has a $150 billion back order. It’s great. So we ride cycles. You guys haven’t seen cycles yet. But you will. And that’s when you become really a great company—become an even greater company than you are today.

SELLERS: So many industrial and tech companies say, “We can’t keep women in the pipeline.” So this fact that 80% of the employees at GE aviation report to women, is that something that you have had to work on?

IMMELT: Oh sure.

SELLERS: And how do you work on it?

IMMELT: There’s 1,000 excuses for everything. But we recruit diversity, and then at the top of the house, we measure how we do. And if people don’t have a good metrics, there’s consequence. And we’re flexible. We give people a chance to change the arc of their career if they want to, because of children or parents or moves or things like that. In the end, the only place you guys want to work is a place where everybody has a chance to do every job. And one of the things that makes GE able to be successful is it’s a place where anybody in the company feels like they can do any job, no matter where they come from.

AUDIENCE QUESTION: Hi Jeff. [You said that] one of your biggest worries is government relations and geopolitical ties. In a utopian world, what are some of the key areas where you would fire all your cylinders and invest if none of those problems existed? And what is GE going to look like in 20 years?

IMMELT: So, let me take two dimensions to the question. One is geographical. Other than the places that we just can’t go, like Iran or places like that. we should be in every country in the world at scale. In other words, I don’t tolerate why we can’t be No. 1 in China, or we can’t be No. 1 in India. There is no place that I think is off the grid in terms of where the company can go and be.

And the second one is my own belief that every industrial company has to be a software and analytics company. That you’re going to wake up in five or 10 years and GE’s going to have a $15 billion in software and analytics. We’re about $5 billion today. And you’re going to look at us as a company that you respect and admire in the field you’re in. And if we don’t do that, we’re not going to be a great company in the 21st century. Now, my world is not consumer, it’s not social media, it’s in the world of machine to machine, machine learning, data and analytics. If we don’t invest to win in the industrial Internet, GE won’t be a great company in ten or 20 years. Period. So that’s got a lot of my time, a lot of my attention. And a lot of my money is going on that bet.

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SELLERS: Jeff, we’re going to do something fun here to close this really terrific session. Facebook actually did with me last week at their offices in New York something that they called Rapid Fire Q&A.

IMMELT: Okay. Now I’m nervous.

SELLERS: Are you ready? Really fast. Best advice you ever got?

IMMELT: Know that you can always get another job.

SELLERS: Worst advice you ever got?

IMMELT: Let financial services continue to grow.

SELLERS: If you could time travel, would you go forward or backward?

IMMELT: I’d go forward.

SELLERS: Favorite country you visited?

IMMELT: Oh gosh, in a really strange way I have to say France.

SELLERS: What historical figure would you most like to have dinner with?

IMMELT: Oh, I love generals. I’d say Grant

SELLERS: Pet peeve?

IMMELT: Laziness, complaining.

SELLERS: If you could have one super power, what would it be and why?

IMMELT: Predict the future.

SELLERS: Favorite movie?
IMMELT: There’s an old western called The Wild Bunch. Awesome 1970s fantastic movie.

SELLERS: Favorite TV show?
IMMELT: Oh gosh, I would say Breaking Bad.

SELLERS: Favorite book

IMMELT: A biography, Truman by McCullough.

SELLERS: Best concert you ever saw?

IMMELT: I’m an Allman Brothers fan, so I’m in the Allman Brothers fan club. So I’ve probably seen them 20 times at the Beacon Theater

SELLERS: Jimmy Fallon or Steven Colbert?

IMMELT: Jimmy

SELLERS: Newspaper or TV?

IMMELT: Newspaper. Fortune.
SELLERS: Call or text?

IMMELT: Call

SELLERS: Red wine or white wine?

IMMELT: Red.

SELLERS: Last thing that made you laugh?

IMMELT: Probably watching, well, I’m not going to go there because it’s politically incorrect. I’d say my wife and daughter and I—my daughter lives out of the country, so she was just back and on Netflix we watched a Louie C.K. concert. I know it’s inappropriate, but I love Louie C.K. So I’d say that’s the last thing that really made me laugh.
SELLERS: What keeps you up at night?

IMMELT: Oh gosh, let’s say government aside, staying relevant. Staying on edge.

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SELLERS: Guilty pleasure

IMMELT: I read People Magazine every week. Yeah, go figure.

SELLERS: Childhood nickname?

IMMELT: So when I was in college—I grew up in Cincinnati, Ohio, and there was an old Paul Newman movie called The Cincinnati Kid. So I was the Kid. Yeah.

SELLERS: GE’s rank on the Fortune 500 the year it started in 1955?

IMMELT: I’m thinking. For a long time we weren’t that high. Even in the ‘80s, we were like 24. And then we had a run. So, gosh, I’m going to guess 15.

SELLERS: Four.

IMMELT: Yeah.

SELLERS: GE’s revenues in 1955?

IMMELT: I’m going to guess $2 billion.

SELLERS: $3 billion. And by the way, Jeff was one year old when we started the Fortune 500 in 1955.

IMMELT: I wasn’t born. I’m ’56. I’m only 59. I don’t want you guys to think badly over here.

SELLERS: Oh, you weren’t born in 1955. The four largest companies in 1955, the year we started the Fortune 500, were—you want to take a guess?

IMMELT: Maybe AT&T (T)?

SELLERS: No.

IMMELT: IBM (IBM)?

SELLERS: No.

IMMELT: General Motors (GM)?

SELLERS: General Motors was No. 1.

IMMELT: Ford? No? I’m going to have to give up.

SELLERS: Exxon Mobil. (XOM)|
IMMELT: There you go.

SELLERS: And U.S. Steel. GE, still in the top 10 of the Fortune 500. And Jeff, this has been fantastic.

IMMELT: Can I say one thing, Pattie? Just to all of you: I had the chance to work with Sheryl in the Jobs Council. She’s awesome. So, I just want you to know how much regard I have for Sheryl Sandberg. She’s fantastic.

SELLERS: Thank you Jeff. Thanks for helping us launch The Chat.

IMMELT: Pattie, it’s always great to be with you.

SELLERS: Oh, it’s great to be with you, Jeff, and thank you all for coming. And keep on watching The Chat.