Name: Jeff Immelt reflects on the ups and downs of his tenure at GE
Uploaded: 2021-02-26
Duration: 9 min 49 s
Description: In his new book “The Hot Seat,” Immelt responds to criticism and living up to Jack Welch’s legacy.

In his new book “The Hot Seat,” Immelt responds to criticism and living up to Jack Welch’s legacy.

Jeff Immelt reflects on the ups and downs of his tenure at GE

Leadership

In his new book, Immelt responds to criticism.

Jeff Immelt reflects on his tenure at GE

Jeff. So good to see you. And thank you so much for joining us to talk about your book. Hot seat. What I learned leading a great American company. You know, right from the first page, you had your doubts about writing a book at all. And you said that your legacy as CEO of General Electric was at best, controversial. And also, there was a lot of negative media coverage about you after you left. So now this is your side of the story. And what do you want people to take away? What's the message after they finished reading your book? Susan, great to see you again. You know, I've had almost four years to think about everything. Think about my life and think about G e. I guess I want your your viewers to take away two things. One is that the G team, this great group of people that I work with, I just think deserve better than the way they've been covered. I think we did more right than we did wrong, and I just feel like that had to be corrected. It's not meant to be my side of the story. It's meant to be or complete telling the truth. Number one and number two look in the era we live in. All leadership is crisis leadership. And Lord knows I had plenty of that. I saw volatility terrorist events and I felt like the stories that I could tell would resonate with people that are leading today. So that really those are the two reasons why I wrote the book. Well, I gotta say, you're very candid in describing your mistakes and your successes during the 16 years that you were CEO and and running the company. In fact, you say that you wanted to write a raw and always honest story. Um, So where did you go wrong? What was your biggest mistake? If I could only change one thing, what would it be? I would go all the way back to probably 2000 and two after 9 11 and really thought differently about how to reshape the company. Basically, the conclusion we came was that we would let g capital grow while we were reinvesting in the industrial businesses. So even by 2000 and seven, we were still 50% financial, 50% industrial. And by the time the financial crisis hit. That didn't look like a very good idea. So you know, I hate to be some macro Susie, but that really more than anything else shaped the last era. Let's say Fergie, you actually say in your book that one of your failures was that you didn't reset the company right after 9 11. Why didn't you? You know, it's complicated, really. It was highly successful company. It was a moment of stress for team and for the world at large. After 9 11, I had confidence in our own ability to do things. And and again, I think the lesson for young entrepreneurs is that every now and then you need to just kind of sit and think five or 10 or 15 years down the road. And basically what we did instead was kind of reinvest industrial more of the same in financial services. And and, like I said, it worked up until Lehman Brothers went bankrupt. And then, you know, the company had to be completely reshaped. You have been criticized for a lot of things that during your 16 year tenure, among them that, uh, paying too much for acquisitions, not getting enough money for the divestiture, Uh, taking too long to get rid of a G capital And for the dramatic drop in G Stop. What do you say to all that? Oh, look, I think if you look at the company on one side, you would say we had record earnings and cash over 15 years over that, you know, 16 year time, period. We had more earnings and cash flow and dividends than the previous 100 years combined. We were number one in the businesses and the industries we were in, we were Fortune magazine magazine, seventh most admired company. We had a strong, you know, team and leaders and good initiatives. So I think we can take pride in those things on the other side. Again, Uh, I wasn't able to get as much value out of G capital as I would have liked. Uh, there were, you know, a complicated ending that made it hard for my, uh, successor. And again, the share price trailed what we thought it should be. And and those things I have to take accountability for. After you stepped down, you had not just one successor. You have to. First, it was John Slattery, longtime G E executive. One year later, he's out. Larry Cult is in first ge boss to be an outsider in the 127 year history of the company. You know, G is famous for grueling leaders. What went wrong with the succession plan? Was it your fault or whether the board or both Look, I think we both share in what the outcome was. I knew John, I supported John. I left, uh, more problems than I wanted to leave for him to handle. Uh, that's on me. Um, he had to make some really fast, uh, difficult decisions. And he needed, you know, the board and the management team to have his back. And I don't think that worked as well as it could have either. So there's a lot of complicated situations to go around, but, you know, I own my own My share of that. Larry, Look, I've known Larry for a long time. He's a great operator. I cheer him on. I'm still a big shareholders, so I don't see the reason why Larry can't drive the company forward. Let's talk a little bit about Jack Welch. You say in your book. He was your hero, and you loved having him as your boss and the world of using him as the best CEO in history. In fact, Fortune magazine named him manager of the century, and you were his handpicked successor. What was it like for you to step in as CEO following the legendary Jeff? Well, Oh, gosh, I'd be lying if I didn't say it was intimidating to follow somebody. That was, um, you really that well known And that's good. You know, Susie, look, I I think in his era he was the best CEO. It's just that everything changed. You know, it's, uh, you trip into the 21st century. It's more global. Technology is more important. It's more social. Uh, you know, it's more diverse. And and so in many ways, many of the things that G had stood for in the previous decades just weren't that relevant in terms of where, uh I was and where the company was, he just had to be comfortable driving the right kind of changes that could make it through that. Well, you you say in your story that you didn't say a single negative thing. At least publicly about Jack Walsh during your time as CEO. But in your book, you do blame him. Um, for many of GS problems, you say he handed you a company that was broken and leaving you to clean up existing methods. What do you mean by that? You know, I think if you read the book, you're going to see that I respected Jack and had 100 many good stories about where he was and what he did. I think what I referred to in the book is that, you know, it was a company that was trading at a 50 or 60 times earnings. We had lots of pieces and assets that people just didn't understand or know. And and my task was to kind of silently change the company. Now, when I sat down to write the book, I didn't write it to kind of tell my side of the story or defend myself. I wrote it to tell a more complete truth. And so the complete truth in terms of how I felt or or what I saw was that Jack was an amazing guy, first time, but the company just needed to change, and I think we all did in some ways his memory of the service, Susie. By treating him to perfectly in some ways. And I look at the way he was covered when he died, which I thought was shameful. People that praised him when he lived took the opportunity to not be at all kind and gracious to him when he died. And I think that's shameful for everybody and not appropriate. He was a great man and a great leader, and I valued the time I spent with him. How did you see yourself now as a leader? Okay, Susie, I've I've learned so much when I was a g e. And since I've left G, I've had a lonely walk, right? I've had I've had to feel a a sense of responsibility, a sense of of actually just that people that I liked and respected may feel that I've let them down. That changes you. You know, I'm I'm humbler for sure. But I also know that you know that I can so add value and that and that I can persevere through the very worst of times. And really, you have to go through a few bad days to make the good days seem better and and in this era that we live in Look, there's nobody out there. None of your viewers are going to live a life where they don't skin their knees every now and then. And if you know what it feels like to skin your knees, uh, read hot seat. I don't mean to be, you know, shamelessly selling the book, but that this is a book for people to know what it feels like. Things don't work.