Hot Seat: Jeff Immelt at GE
In September 2001 it was difficult to follow Jack Welch. The day after Jeffrey Immelt became CEO of General Electric, he faced an even greater challenge – the 9/11 terrorist attacks. Immelt States in Hot Seat: What I Learned Running a Large American Company:
The best leaders absorb fear. I’m not talking about reassuring people by blowing smoke or giving false assurances. I’m talking about giving people the truth, but also giving them a way forward. After September 11th, GE employees had to hear and believe that we had a plan and that together they could help us make it happen. They didn’t need to hear that I was so excited that I tried to keep the food low.
True leaders are open, but they don’t panic. The best leaders recognize mistakes, but they don’t tear down colleagues just to ease their own ailments. Transparency is an admirable goal. However, the real goal is to solve problems. When leaders merely discharge their burdens without offering a plan of action, that is selfishness masquerading as openness – the arrogance of false piety.
This is a baptism of fire.
Jack Welch led GE to some impressive numbers. In his twenty years as CEO, GE had grown in value 4,000 percent. But numbers can hide impending problems until they stop. GE had internal problems, was too dependent on GE Capital, and wasn’t digital and innovative. And in 2001, the economic tailwind that Welch enjoyed should shift.
Much of what had to be done at GE were long-term proposals. It is always a challenge to help the naysayers within your own ranks, let alone investors and experts, understand the value of what needs to be done. Such was the case with GE Digital, a new subsidiary formed to provide industrial companies with software and services for the industrial Internet of Things.
Tech startups define success, especially in the first decade, by how well they attract customers, build skills, and penetrate their emerging markets. Traditionally, that’s not how GE defined success. We wanted to increase sales and do our numbers. After analyzing this metric, this small start-up within a large parent company was viewed by many as a disappointment.
Immelt gives us a glimpse – the other side of the story – of what happened at GE when he was CEO. It shows the complexity of running a global company with over 200,000 employees. I don’t think it would have been any different if Welch had stayed. Times changed, hidden problems emerged, and unforeseen events would affect the nation. What Welch built was not sustainable. There have been misjudgments (yes, he’s talking about the chase plane) and mistakes made to be sure, as he admits in this book. For one, GE Capital should have been contained more quickly. Acquisitions were made to move GE in a new direction according to the market and to support companies in which GE was already active.
If your watch’s stock value drops 30%, you can bet that people are looking for a scapegoat. It’s easy to point your fingers and get all the answers off the sidelines, but when you’re actually working on working through the ambiguity it’s a different story. That should be a lesson for all of us.
Some people point their fingers in a crisis, others solve problems, and there is little overlap between the two groups. In an accusing culture, people can stop working to cover their own asses. If you can maintain an all for one and one for all ethos, it can save your bacon. Good people will stand by your side in a righteous fight. If you have a strong team, you can weather any crisis. Without that you are lost.
Building a strong connection with the people you work with is about two things: time and truth. You have to pass the time and tell the truth.
In situations of dynamic complexity, the impact of a leader’s action or decision is not immediately apparent, but only becomes apparent over time. This in turn means that traditional forecasting and planning methods will not work. Increasingly, our executives had to cope better with the ambiguity and be flexible when new data emerged.
There are only a handful of executives in a company who are true system leaders. These are people who see what’s next without losing sight of what’s most important. You see long term and still deliver short term results.
As leaders, we need to remember that the world is turning. Be humble and empathetic when times are good. And learn to recognize the difference between tailwind and good management. If you impress someone, when they benefit from good markets, you still don’t know much. If they thrive on a shit show, you have a gem.
When you’re driving change – especially in a large company – there are a thousand voices. Some of them are really important because they say, “Here is what you don’t see; So we can improve this work. “But these can be drowned out by the cacophony of voices saying,” Change is uncomfortable, so I don’t want to change no matter what. ” For those trying to transform their businesses, I say this: make sure you are surrounded by enough disagreement to find the voices that matter.
Jeff Immelt and his co-author Amy Wallace gave a very readable insight into Immelt’s 16 years as CEO of GE. There are plenty of lessons and takeaways inside.
Immelt is now a partner at New Venture Associates, a Silicon Valley venture capital firm. He also lectures at the Stanford Graduate School of Business.
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Posted by Michael McKinney at 03:50 AM
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