This week, we speak with Jeff Immelt, former CEO of General Electric from 2001 to 2017. Immelt joined GE in 1982, in GE’s plastics, appliances, and healthcare businesses, and spent over 35 years with the company leading GE’s Medical Systems division from 1997 to 2000. His new book is: Hot Seat: What I Learned Leading a Great American Company.
He discusses his baptism of fire as CEO — his first day on the job was 9/10/01, and the next day the terrorist attack on the Twin Towers and the Pentagon occurred. That was the first crisis Immelt experienced on the job, followed by the 2008-09 GFC, and the Tsunami-caused Fukushima Daiichi nuclear disaster (four of the 1960s era reactors were made by General Electric). He learned that you must absorb fear, have contingency plans, iterate variations and stay flexible in order to succeed in a crisis. Robust risk management is essential to survive as a large firm.
The other side of that is being an optimist: Leaders must think about the future, make high risk bets and new initiatives to press the company’s existence strengths while thinking about what its clients are going to be buying decades hence.
When Immelt took over, General Electric had strong balance sheet but was not especially innovative. An industrial giant trading at a 50 P/E, with 40% of revenues coming from finance was simply an accident waiting to happen.
Immelt’s biggest complaint has been the under-investment in R&D and new product areas in the two decades that preceded his tenure. Outside of the Health Care division (which he ran) and the Power division, there was less R&D than other competitive industrials were doing.
Despite my giving Immelt every opportunity to throw his predecessor under the bus, he refused to take the bait.
You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here.
Be sure to check out our Masters in Business next week with Bill Gurley, the legendary venture capital investor at Benchmark. His investments include GrubHub, Nextdoor, OpenTable, Zillow and of course, Uber. He is a member of the Board of Trustees of the Santa Fe Institutem, and is widely considered one of most influential dealmakers in technology. He was named TechCrunch’s VC of the Year in 2016.
Jeff Immelt Favorite Books
Truman by David McCullough
Open Season by C.J. Box
Reconstruction after the Civil War, Third Edition by John Hope Franklin
Books Barry Mentioned
Triumph of the Optimists: 101 Years of Global Investment Returns by Elroy Dimson, Paul Marsh, Mike Staunton
The Wright Brothers by David McCullough