Ep. 21: Hot Seat: Lessons Learned While Leading a Great American Company

with Jeff Immelt

August 5, 2021

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Jeff Immelt
Venture Partner, New Enterprise Associates; Author, “Hot Seat”

Jeff Immelt served as chairman and CEO of GE for 16 years where he revamped the company’s strategy, global footprint, workforce and culture. During his tenure, he led several innovative transformations that doubled industrial earnings, reshaped the portfolio, re-established market leadership, grew a strong share position in essential industries, and quadrupled emerging market revenue.

 

Jeff has been named one of the “World’s Best CEOs” three times by Barron’s. During his tenure as CEO, GE was named “America’s Most Admired Company” by Fortune magazine and one of “The World’s Most Respected Companies” in polls by Barron’s and the Financial Times. He has received fifteen honorary degrees and numerous awards for business leadership and chaired the President’s Council on Jobs and Competitiveness under the Obama administration.

 

Jeff earned a B.A. degree in applied mathematics from Dartmouth College and an M.B.A. from Harvard University. He currently serves on the board for NEA portfolio companies Bloom Energy, Bright Health, Cleo, Collective Health, Desktop Metal, Formlabs, Radiology Partners, Tri Alpha Energy, and Tuya. In addition, he is on the board of Sila Nanotechnologies and Twilio, a public company that leads in mobile communication. Jeff is a member of The American Academy of Arts & Sciences. He and his wife have one daughter.

There are times when boards want authority without responsibility. That's how companies can get in trouble.

Transcript

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Gary Bisbee  0:06

Washington, D.C., is my home away from home. I’ve worked here for the better part of three decades as a founder, entrepreneur, policy expert and author.

Don Rucker 0:10

Probably the longest title. Everybody sort of shortened it to ONC for sanity’s sake.

Gary Bisbee 0:15

Mercifully.

I’ve learned leadership secrets from many health care executives who understand that Washington is the largest payer and regulator of health care.

Nancy-Ann DeParle 0:25

She said, well, because you’ll never get a husband if you do that.

Gary Bisbee 0:29

I began interviewing health care leaders many years ago because what better way to learn how they think, why they make it to the top and how they remain

there?

Think about, what was your most challenging engagement.

Greg Carpenter 0:40

Health care has been the most difficult problem, as you said.

Gary Bisbee 0:43

We’ll talk about that later.

Jeff Immelt was CEO of GE for 16 years, the position he describes as the “hot seat,” the title of his new book. During Jeff’s first week on the job, the terrorist attacks of 9/11 occurred, followed seven years later by the Great Recession. How did Jeff react to the crisis of 9/11 and the Great Recession? Ultimately, he assessed the magnitude of economic change and set in motion a restructuring plan that would alter GE’s revenue and earnings profile. You can hear in his voice that changing the financial trajectory of one of the oldest companies in America was painful. Through all the change, Jeff maintained a positive outlook and you’ll be able to understand why as he explains. Those of us in healthcare know of Jeff from his four years as CEO of GE Healthcare. Jeff shares with us what lessons he learned about healthcare during his time there. He was committed to learning and he discusses rationale for expanding the Croton Ville teaching facility and curriculum. We wrapped up this very candid and enjoyable interview by asking Jeff for his advice for up-and-coming leaders.

 

Good morning, Jeff, and welcome.

 

Jeff Immelt  2:08  

Hey, thanks, Gary. It’s good to see you again.

 

Gary Bisbee  2:10  

We’re pleased to have you at the microphone for sure.

 

Jeff Immelt  2:13  

I see you’re there in the capital. Are you going to get yourself in trouble down there?

 

Gary Bisbee  2:19  

I’m not running for office and I’m not raising money, Jeff.

 

Jeff Immelt  2:24  

Good to hear.

 

Gary Bisbee  2:24  

I’m sure during your time at GE Healthcare, you spent a fair amount of time here. Probably your whole career at GE you spent time here, right?

 

Jeff Immelt  2:34  

Yeah, it’s one of the big changes over time. In the late 90s, Jack used to say to us, “Any time in Washington is time wasted.” Nothing ever happens there. No business gets done there. That has changed immensely over the subsequent 20 years between policy and terrorists and things like that. It’s one of the big changes of the last 20 years.

 

Gary Bisbee  3:03  

Big changes and in healthcare, thinking of your four years in GE Healthcare, these days 60% of our large health system revenues come from governments. Similarly, the large commercial insurers. Jeff, we love to get to know our guests and understand them a bit. It leads to how they have been leaders. What was life like growing up for you?

 

Jeff Immelt  3:31  

I was a good mix of an athlete (I liked sports) and a math geek. I was always solving problems. I always enjoyed science and math and all those things, but I also played football, basketball, baseball. I loved team sports. In some way, shape, or form, my whole life was shaped by those two things. They started very early on. I grew up in Cincinnati, Ohio. My dad worked at GE so from a very early age I understood the corporate life. He worked at the aircraft engines business so I always enjoyed seeing the technology and the products. It was a great, typical, middle class, American upbringing. I had great parents. I went to a very good public high school. I had a chance to get a good education. It’s the kind of upbringing that we hope still exists throughout the United States.

 

Gary Bisbee  4:29  

What did the young Jeff think about leadership? Or did you even think about that in your high school and college years?

 

Jeff Immelt  4:37  

A lot of the leadership I had was based on sports. I had fundamental basics from my parents of treating people with respect, be accountable, build teams. As I’ve grown my career, I always tell people, “Careers are shaped on training, experiences, and things you learn at your parents’ knee.” Some of those can’t be trained. I had a good chance early on to be curious and persevere and having a good balance of self confidence and self awareness. That came from my parents as much as anything else, so I was quite lucky in that regard, but captain of sports teams and president of clubs in college and things like that. It was a good, well-rounded background. The 17-year cicada was a big deal in Cincinnati. I was like in fifth grade and the teacher said, “Okay, put in a jar what you plan to be doing 17-years now.” I thought, of course, of being a professional football player. I had no aspiration to be a business executive in any way. Those are the kind of dreams we had.

 

Gary Bisbee  6:03  

Was there a point that you realized you were a good leader and that leadership was going to be a key part of your professional life? Was there a point where it clicked for you and you said, “Leadership is really important for me to participate in?”

 

Jeff Immelt  6:20  

It’s funny, Gary, because you’ve spent your life training leaders. It’s one of those things where, if you think you’re a good leader, it means you aren’t one. There was a point in my life when I recognized that I was a good peer, that I liked working with people, that I was willing to be accountable for things, that I was willing to help drive change or things like that, and that those elements would help people follow you. Whether that was in my 20s or 30s, at some point you recognize that the things you were doing or the way you acted or the way you conducted yourself earned you the right to be a leader. Even though I took courses on leadership in school and I went through training at GE on how to be a good leader, you’re not really with it until you see it in practice and see whether people follow.

 

Gary Bisbee  7:19  

Of course, you’ve written the book “Hot Seat,” which is 12 chapters of wisdom about leadership. Great job there. Our viewers, if they haven’t come in contact with that book, should because it’s a must-read for anybody who’s interested or is a leader. Thinking about taking responsibility for your actions, you shared a story in there about Reggie Williams from your Dartmouth football days. Could you share that with us? I thought that was a powerful story.

 

Jeff Immelt  7:52  

You learn a lot of leadership from observation, observing how other people comport themselves. One of the elements of being a good leader is the willingness to stand apart, willingness to buck the trend. When I was in college, the superstar captain of the football team (who was the best football player, maybe the best athlete I’ve ever seen) was a guy named Reggie Williams. Reggie ended up playing 13 years in the NFL for the Cincinnati Bengals, but we were struggling as a team and he was just so much better than everybody else. We were having a team meeting because we lost two games in a row and Reggie was speaking because he was the team captain. A guy named Mike Brate (who was a second shrink quarterback) stands up and says, “Reggie, that’s not good enough. We’re failing because you aren’t being a good leader right now.” I thought Mike was going to get the heck beat out of him or something bad was going to happen. It was one of those things that was imprinted on my mind forever because everybody that left the room that day had respect for Mike and his willingness to stand apart. At the end of the day, he depicted what the issue really was. Like I said, you build your experience base by observing people in your career. That was the observation of somebody’s willingness to stand apart.

 

Gary Bisbee  9:22  

Did you go right to Harvard Business School from Dartmouth? Or was there some intervening period of time?

 

Jeff Immelt  9:27  

Yeah, no. I kind of ran out of money, so I worked two years for Proctor & Gamble and earned enough money to start my way back to school. The only thing that was probably distinguishing about that time in my life is that my officemate was Steve Ballmer, who ended up being a pretty well-known guy at Microsoft and we’re still good friends today. I worked two years and then went to business school and then I joined GE right after Business School.

 

Gary Bisbee  9:57  

What caused you to join GE? I know your dad worked there, of course, but what caused you to join GE?

 

Jeff Immelt  10:03  

I wanted to be an operator. I worked the summer between years of business school at Boston Consulting Group and loved the experience, but I didn’t want to be a banker or a consultant. I wanted to be an operator. GE had a reputation for good management. I knew I’d learn a lot. I never thought about staying for a career there. I thought I’d stay five years and see what I learned, what I liked, things like that, and five years turned into 35 years. Couldn’t have planned it that way, but I knew it was going to be a good experience. It certainly turned out to be just that.

 

Gary Bisbee  10:43  

All of us in healthcare, of course, remember you from your roughly four years as the CEO of GE Healthcare. What were your main assignments leading up to GE Healthcare?

 

Jeff Immelt  10:56  

I spent most of my career in GE’s plastics business and did a series of commercial and product management, marketing, sales jobs around the world in GE plastics. I spent four years in our appliance business where I ran the service business during a huge product recall. That is what got me noticed by Jack and by people in the senior leadership team, not because it was good, but because I was dealing with a horrible product recall, so I got a lot of attention for all the wrong reasons, but that’s frequently the way careers were built. I ran our plastics business and then I had a chance in 1996 to go run the healthcare business. If you talk to CEOs and ask them, “What was your favorite job?” None of them will ever say being a CEO. They’ll always say it was being a division president or “when I was in China” or something like that. In my case, running the healthcare business was a great job. I liked the business, I learned a lot. It was a good time for my family. It was just a good fit for me personally. In every era in healthcare, you can say it’s a time of great change. This was another time of great change in healthcare, so it was an extremely fun experience.

 

Gary Bisbee  12:30  

You were the right person for that job from the standpoint that everybody thought you’re terrific. You’re very engaging, approachable. It was a great fit. What was your first thought about healthcare once you went there? Healthcare is a bizarre industry in some ways. What were your first thoughts about healthcare?

 

Jeff Immelt  12:49  

I run our plastics business, which is a hardcore industrial business. General Motors was a customer and things like that. I got into healthcare in 1996 and, like I did my whole career, I would go on field trips and try to understand the business from the market back. There were a couple of impressions, Gary, but the one that really sticks in my mind to this day is how terrible the quality was in healthcare. There were no metrics, there was little accountability. If you walk through a Ford assembly line plant (which was a big customer of ours), there are quality metrics all over the place, but in 1996 in health care, there were no metrics about quality and variants and things like that. In one of the very first meetings I had, we had an X-ray tube that would burst and oil would leak on patients. I’m sitting in this meeting thinking, “You have to be kidding me. We can’t possibly sell a product that does this!” I was freaked out because—in my hardcore, dirty, nitty-gritty plastic business—we would never have anything like that. That was my first impression. My second impression was just how much I love doctors, how much I loved learning and talking and understanding them and asking them and being curious about them. It’s one of those things, even to this day in the health care world, we still forget about doctors. Every new plan and every new company and every new theory and every new this, that, or the other thing, we forget that the people that help patients, that spend money, that save money, that drive quality are really the physicians. I’d say those two things: (1) how behind healthcare was to every other industry I’d been in and (2) the star of the show, how important they were, how much I learned from them and loved them and just enjoyed that experience. I can give you 100 more, but I’ll start with those two.

 

Gary Bisbee  15:09  

I think that resonates. Jeff. That’s good. Following your four years there, you were selected for this almost like a bake-off with you and Jim McNerney and Robert Nardelli. That must have been an odd situation for you, Jeff. Looking at it from the outside, it was like, “Wow, never seen anything quite like that before.” What was that like for you to go through all that?

 

Jeff Immelt  15:36  

I think for every succession process, the process is part of the process. In other words, you’re going to step into a job with a lot of pressure. If you can’t withstand the pressure of the succession process, you’re probably not going to— It’s like running for president. If you’re not a good candidate, it’s unlikely you’re going to be really great president. It was all that pressure. It was a totally unique time. Young people wouldn’t understand it, but 1999/2000 was almost 20 years until the NASDAQ was at the same level it was in 1999. It was incredibly inflated and Jack Welch was the most famous business executive of that era. He was like Jeff Bezos and Elon Musk all rolled into one, so it was very public, it was very intense, it was really difficult. I didn’t enjoy it at all. It was just “of the time,” is the way I would describe it. I trusted Jack, I trusted the company, but—as a process—it was challenging.

 

Gary Bisbee  16:46  

Was he a mentor, looking back on it? He didn’t seem to be a warm and fuzzy person from what I remember of him, but was he a mentor to you?

 

Jeff Immelt  16:56  

I don’t think he was a mentor to anybody really. He was just so separate from all of us in terms of notoriety and skill and all that stuff, but he was a good teacher. You learned from observation. You learned from proximity, from watching him in good times and bad. That’s what made Jack really tick. He wasn’t the kind of guy that would call you in his office and spend an hour just chatting about what you were doing right or wrong or different or spend a weekend with you or something like that. That just wasn’t Jack. One of his skill sets was his ability to run things at size. One of the things that made him so successful was he had a voice for 300,000 people, he had a voice for one person. He knew the audience in immensely different ways. I remember when he was in Milwaukee, where the healthcare business was headquartered, he just chewed my butt out for like an hour. We had to go meet with the union leadership. We walked like 20 feet down the hall to meet with the union leadership and he’s charming, he’s telling jokes. Then we go back to the room and he starts yelling at me again. I said, “Where was the guy I saw like five minutes ago?” He says, “You’re in trouble. They’re not.” He was that kind of guy. Not to tell too many stories, Gary, but there were a group of sisters that ran the Catholic healthcare systems in 1999. I took them to have breakfast with Welch and Fairfield. There were maybe a dozen of them and it was one of the most fascinating experiences I ever remember because one of the sisters said, “Mr. Welch, we don’t think making money is that important, so we never want to fire people.” Jack looks at them and he’s like, “Sista, sista, how do you know who’s good?” It was just like this great— but he was listening and engaging. Those are some of the things I remember the most about how fun it was to work with him.

 

Gary Bisbee  19:09  

He’d been there as the CEO for 20 years. He was prominent, maybe the most visible CEO in the business. Did you ever worry about how to follow somebody like that?

 

Jeff Immelt  19:24  

Oh, sure. If you thought that the task was really “following him,” nobody would do the job. The world changes so dramatically. In this case, the difference between let’s say 1999 and 2005 was hugely different. 9/11 happened, you had China emerging, you had new technologies disrupting, you just go down the list. What happens in business and maybe in every field is life changes, it changes rapidly and companies have to respond, so you can’t look backward on leadership. You can’t think about the role of replacing him in the time he did it and the job he did. You have to think in terms of what’s next, what you need to be ready for, etc. There was a lot of change, an immense amount of change.

 

Gary Bisbee  20:25  

Speaking of change, the world changed of course with 9/11, which happened a day or two after you became CEO. What a shock to your system. What was your first thought when you saw the planes hitting the building?

 

Jeff Immelt  20:39  

I was in Seattle, Washington, downstairs in the fitness center on a stair stepper watching TV. When I first got down there, the first plane had hit. While I was exercising, the second plane came in and you knew life was different. My first thought was the safety of our people. Was anybody impacted? We had a lot of NBC and G-Capital people in New York City. Who was safe? Then over the next 24 or 48 hours, slowly beginning to think about how we were in the commercial aviation business, that was going to be hard hit. We were in the insurance business, that was going to be a hard hit. We’re in the media business. We went a week with no commercials. That was going to be a hard hit. As the first 24 hours and the shock went past, you start thinking about the business impact and that was profound. You go through your family, your team, your people, and then how do you start reacting from a business standpoint?

 

Gary Bisbee  21:46  

What was the process you set up to consider the impact of all of this on GE?

 

Jeff Immelt  21:54  

I was still in Seattle. This was a Tuesday. By Thursday, we had impromptu business reviews with all of our businesses. I told all of our business leaders, “Don’t prepare a lot of charts. Maybe one or two charts, but just give me a snapshot about what still works, what doesn’t work, what are you thinking about?” That clearly identified the big issue to be commercial aviation. Probably by the second week, we honed in on the two or three areas that were going to have the most dramatic impact on what we had to deal with, and a lot of that was in the aviation sector. Then we started every other day calls at the end of the day to go through who we had to lend money to, which airlines were in the most trouble, those kinds of things. For probably 30 or 60 days, you’re in pretty intense crisis communication. You learn a lot. You learn a lot about you’re team and your people during that time period. Some people come in and say, “Oh, you own 1,200 aircraft. That was so stupid.” You get those people out of the room. You say, “Okay, you just take a two-week vacation because you’re not going to be helpful on this.” If you drive home one night and there’s smoke coming out of your home, everybody in the neighborhood is going to help you put the fire out. If you come home and see smoke and cry out, “Arson!” nobody’s going to help. Some people were yelling, “Fire!” Some people yelling, “Arson!” You want the people that are there willing to solve the problems, and that becomes apparent.

 

Gary Bisbee  23:43  

Were there any surprises? Like people you thought were all-stars and just couldn’t deal with the crisis or vice versa?

 

Jeff Immelt  23:51  

Yeah, both ways. On the one hand, you had people who were taking action, we’re right up front, completely team-oriented, and willing to face in to the tough challenges. Dave Calhoun (who runs Boeing now; he was running our aircraft engines business then) was a superb leader, faced right into it. Then you have some people who are not transparent or willing to help other people in the process or use this opportunity to play politics of one kind or another. Those people become obvious at the same time. You see people on both sides of the ledger on that. You never know much about people on good days, but you know a lot about them on bad days. You have to keep your eyes up because you’re going to figure out who the stars really are when the chips are down.

 

Gary Bisbee  24:46  

During the seven or eight years before the Great Recession, what were the major changes in GE? What were the major changes you felt you had to make in reaction to 9/11?

 

Jeff Immelt  25:07  

Not so much in reaction to 9/11, but the company had a hugely vibrant financial service enterprise that had been built over 10 or 20 years and a tired set of industrial businesses that had been under-invested in so it was pretty clear to everybody that we had to go about investing much more in our technology, in our globalization, in our customer franchise, particularly around the industrial sets of businesses. We did a lot of portfolio work, we made some big investments in health care, we got into life sciences, we got into renewable energy, we doubled the investment in our aviation business. Those were the main changes the board was very supportive of and knew we had to make. GE was a big, complicated company. We traded like Amazon in 2001 despite the fact that investors didn’t really understand all they could’ve or should’ve about the company. We bought a life sciences company in 2004. We paid 17 times EBITthough and investors trashed me. They said, “You guys used to pay eight times EBITthough.” I said, “That was for an insurance company. That’s for a financial service business, not a high-tech, high-margin, life science business.” We struggled with helping people understand the nature of the company and trying to reinvest in the technology we thought was going to be relevant for the 21st century.

 

Gary Bisbee  27:00  

Then along came the Great Recession, which caused another major shock. That led to some strategies including divestitures. How were you thinking about the size of GE and what were your reactions to the Great Recession?

 

Jeff Immelt  27:20  

9/11 was a terrorist event, but it impacted everybody. COVID was a terrorist event, it impacted everybody. The financial crisis was very specific. It hurt the financial service industry very hard. It hurt what’s called wholesale fundage finance companies, like GE Capital was a direct hit, so we took a direct hit to our business model in 2008 and 2009. We had to fix it on our own. We benefited like everybody did from government programs, and they were great, but banks have deposits. If you had deposits, you came through the financial crisis in better shape. We relied on healthy debt markets and they took a long time to heal. The investor perspective on financial services changed dramatically, the way the government looked at financial services changed dramatically, and the ability to fund growth and GE capital changed dramatically. We did the best we could over a couple of years but by 2015 it became apparent that we couldn’t sustain a healthy business in financial services, so we decided to divest most of those businesses, at least the businesses that weren’t directly connected to GE equipment, GE assets. We made that decision in 2015. It was done very carefully and done with lots of interaction with our board and investors, but that was a very tough decision to make and we made that over a couple of years.

 

Gary Bisbee  29:08  

NBC was another divestiture you made a little bit after that.

 

Jeff Immelt  29:15  

We did that in 2010 and 2011. It was clearly something that never really fit with the company. It was a good business, and we ran it well for most of our time, but people like me could go into any business review around the company and add value. By the time I retired, I knew a lot about the energy sector and the healthcare sector and financial services and things like that. I never could walk into an NBC meeting and say, “Hey, let’s punch up the script a little bit” or “King Kong doesn’t look like a good movie to me but this movie does” so it was never a hugely direct fit with the company. We sold it as we were going through the financial crisis. We basically had to bolster the GE capital balance sheet. One of the ways to bolster the balance sheet was to take capital from NBC and stick it into our financial services to preserve that. We could have picked a better time to sell it but, at the end of the day, nobody really thought twice about whether or not it was the right thing to do.

 

Gary Bisbee  30:21  

Tough time to market for sure. What about GE Healthcare? Did you ever think about divesting healthcare at any point along the line?

 

Jeff Immelt  30:30  

It’s one of those things that a number of times bankers would come in and suggest but I would always say, “Look, we’ve been in the healthcare business for 100 years,” so since 1915. We had a hugely respected brand. The business had grown from $3 billion in 1996 to $21 billion by 2016. We were building the franchise out. It was a harmonious business to what the rest of the company was doing. We always felt like it helped bolster the investability of the company and the price-earnings ratio that investors will look at so, for a number of reasons, we always felt like it was a good fit. In many ways, I tried to make it bigger while I was there because I thought it was a good fit. When you’re in a conglomerate, the burden is on you to say why it fits versus why wouldn’t it fit. Life’s long. If you think about building companies for the long term, if you’re in one of the biggest, one of the fastest growth, an industry that rewards scale, if you can answer all those questions and that’s called health care, then you exit it at your own peril. You can only play that card once and I always felt like you’re crazy to do that. I teach a little bit now and I tell my students, in 1982, when I graduated from business school, if you would have decided to build your career in healthcare, you would have been a success no matter what you did. You could have gone to work for a system or an insurer, a device company. The same thing is true today. When you think about your career, you can also think about it as a company. If you have a great position in an industry that’s growing, man, you should just add to it, build on it. That’s the way I always looked at healthcare.

 

Gary Bisbee  32:31  

I agree with that for sure. You mentioned the board of directors. You had the board, you had to manage through September 11, you had to manage through the Great Recession with the board. Are there any lessons you took away from how you deal with a board during these sorts of crises?

 

Jeff Immelt  32:50  

I’m now adamant. I’m on boards now. I never was on one at GE. There’s the sense that they’re all-knowing and all-seeing. For the vast majority of my time as CEO, I had a great board and great board members, but they also can be part of the problem sometimes. They have their own egos and their own agendas and getting that all aligned is a challenge. You have to imagine your board on the worst day, not the best day, so I think about my board in February of 2009. We were getting crushed in the market. It was the middle of the recession. My board was awesome. They were awesome. Ralph Larson was our presiding director. He made me cut the dividend. I didn’t want to. I had 1,000 excuses not to. He just turned to me and said, “We’re going to do it. We’re going to do it now.” I loved him for it. That was exactly what was needed at that moment in time, but sometimes they can also get lost. One of the things we struggled with over time— and again, I blame myself, I don’t blame any of them. Because of the nature of our financial service business, we let the board balloon to 18 people. That’s just too big. Anytime you have a board of that size, you lose your connectivity and your focus. That’s what happened to us and, again, that one was on me. One piece of advice I’d give to any CEO is imagine your board on the worst day, the very worst day, and go around the table and say, “Is this board member going to be about the company, about me? Are they going to be about themselves?” Answer that question for each one of them because I guarantee it’s a mixed bag. It’s never unilateral. The best you can, take all the ones that are in it for themselves and get them out of town because they can do damage.

 

Gary Gisbee  34:56  

What do you think the right size board is?

 

Jeff Immelt  34:59  

10, 12 max, but better 10. It’s always good to have diversity of all kinds: of thought, of gender, of race, of all kinds perspectives. I’d say that’s more important than even having everybody know healthcare. It’s always good to have diversity in judgment but, at the end of the day, it’s trust. If you’re making your numbers and things are good, board meetings are a lot of fun. If you’re not making your numbers, you’re in the middle of a storm like 9/11 or the financial crisis, they are no fun. There are times when boards want authority without responsibility, and a lot of governance pushes that way. That’s not healthy. That’s how companies can get in trouble.

 

Gary Bisbee  35:58  

I agree with that. As a CEO, there’s a lot of criticism for CEOs that are “managing” the board, but on the other hand, this point of about authority/responsibility and getting that blend right. I think the CEO has to be active and managing the board. How do you view that?

 

Jeff Immelt  36:18  

I’ve always believed in access. We insisted that each board member visit two businesses a year without me there. We would organize trips of four directors and they would go to health care or they would go to China or aviation or things like that. Beyond that, if you want to go any place and see anything, you go. If you give them access and you say, “You have the run of the place. All you need to do is schedule with the HR leader” or something like that, the general counsel, but you give them access, transparency, and then they come back and say, “We think your aircraft engine strategy is stupid.” I say, “You’ve seen it 10 times over five years.” If you’ve seen it 10 times over five years, you own it. You don’t get a chance to give another vote. As a CEO, you should give access. A lot of CEOs don’t give enough access. My advice to everybody is to give infinite access, but don’t let them flip flop all the time. Don’t let people say, “You’ve tried a bunch of things and it just didn’t work.” They have to say, “Look, it’s on me too. I saw it. I supported it. It didn’t work. Okay. That’s on all of us.”

 

Gary Bisbee  37:41  

That’s great advice. Let’s turn to Croton Ville for a minute. You were a big proponent of Croton Ville. Looking at it from a customer’s standpoint, the healthcare people I know thought Croton Ville was one of the best things they ever had the opportunity to attend. How did you view Croton Ville? What was your thought as you put resources into Croton Ville over time?

 

Jeff Immelt  38:09  

Croton Ville was built in 1956. If it didn’t exist in the form that it did, I probably wouldn’t have done it. The fact that it was in existence made it easy to plug into, so that’s number one. Number two, it’s always incumbent anytime you’re trying to teach leadership to stay up to date. Depending on what theory you have or how you’re trying to drive change, it kind of has a five-year life or seven-year life or three-year life. We needed to keep fresh thinking involved in everything we do, so we tried to keep professors and residents, other CEOs to come. Then I tried to get it filled seven days a week, 365 days a year. With either GE people or customers or how we used to do work with the fire department in New York City, I felt like it was such an asset, it was such an opportunity, that shame on us if we were precious with it. I wanted it to be used every day of the week, every week of the year. That’s the way I felt about it. I didn’t want it to be a luxury. I wanted it to be a working person’s institute, so we tried to keep it fresh, we tried to keep it filled. We tried to use it to help sell things. You and I started this conversation with what healthcare looked like in 1996, but I’d say a lot of the systems have made tremendous progress over the last 25 years and picked up things like lean management or digitization or training of leaders and things like that. We got a lot of mileage out of it in the healthcare industry because a lot of the best CEOs believed in self-help, wanted to get better, wanted to learn and we used it to our advantage.

 

Gary Bisbee  40:07  

I definitely saw that. Today social-cultural issues like the environment, diversity, and so on are hot topics. They were not really when you were there and yet you were a proponent for both of those. How did you think about the social-cultural issues?

 

Jeff Immelt  40:26  

Yeah, it’s much harder today than ever before. It’s a more complicated leadership job. A lot of it is just the time we live in. People don’t get much satisfaction from political leaders. There’s more pressure on business leaders to be involved and to have a point of view. That’s changed more dramatically since I’ve retired. In the case of diversity, it’s a real aspect of respecting people and having the ability to drive culture and change, so this notion of having a sense about women or African Americans or global talent or LGBTQ or however you want to play it. I was very hands-on with that, I was very numbers-oriented in terms of wanting to see people get promoted and things like that. That’s an aspect that is consistent with wanting to be well-managed and wanting to have great people. Then there are areas like the environment and areas like the capability of technology to drive change and climate change and things like that. That’s more complicated. It requires policy, it requires innovation, it requires investment. As a company, we could see as early as 2005, we declared that we thought climate change was real and caused by man and could be existential and we invested accordingly. As a leader, you have to think about a couple of things: what do you believe? What are the values and the culture of your company? What’s your track record? In other words, if you want to come out and say, “We think the voting law in Georgia is wrong” but yet your own track record with diversity and African Americans is terrible, you can still say it, but nobody listens to you. At that point, you have to understand that you’re just flapping your lips. Nobody cares. You have to think long-term and you have to make it personal. I signed petitions and I was a member of the business council and all that stuff but, when something was really important to me, I used my own voice. I didn’t just sign a petition. I didn’t join 300 other people. I would send my own tweet or I would give my own speech or I would do something individually because, unless you’re willing to put your own specific name on something, people don’t take it seriously. You have to be thoughtful about all these activities, all these things are going on, but there’s no doubt that people expect business leaders or hospital CEOs. It’s a public job now and your voice is expected and you better be thoughtful about it.

 

Gary Bisbee  43:38  

Jeff, this has been a terrific interview. Your book “Hot Seat” is full of the kind of wisdom we’ve talked about today. All 12 chapters deserve to be read. Let me ask one final question if I could, and you’ve kind of already answered this in the last several minutes, but a fair number of our audience are up-and-coming leaders. I’m sure you are approached all the time by these young people and asked for your advice, but what advice would you give a young, up-and-coming leader?

 

Jeff Immelt  44:10  

The book itself is kind of just stories of my career. It doesn’t try to lecture, it just tells the story. A couple of things are going to be important as you go forward. One is you have to understand disruption. You have to understand technology. You have to pick what’s next because we live in a time of relentless change. You have to have your own point of view on what’s going to happen next. That’s key. You have to be willing to make decisions and frequently you make decisions with imperfect information. You’re going to be criticized, you’re going to be judged, but you have to have the ability to make decisions. You have to connect with people. You need to make leadership personal. You have to be willing to connect and build teams and build trust. You have to understand that sometimes people you don’t trust who you leave in their jobs are going to break your heart. You have to be a problem solver. You have to solve the problems you created. It’s easy to solve other people’s problems, but you have to solve the problems you created. That’s really hard. Lastly, you have to take a punch. On the last day of class in my business school class, I always tell my students a good career answers three questions. One is how fast you can learn. I had the chance to get smarter every day. Some days, I didn’t get smarter, that was on me, but I had the chance to get smarter every day. How much can you give? What are you willing to give to others? What are you willing to do for others? What are you willing to commit to make the world a better place? Then, how much can you take? Can you work hard? Can you be criticized? Can you fail and dust yourself off and get up again and keep trying. If you can learn, if you can give, if you can take a punch, you’re going to find your own way in this life. People tend to give up too soon, so I would tell all those things to people who are watching your great podcast on lessons for leaders.

 

Gary Bisbee  46:30  

Jeff, thanks so much. Get the book, “Hot Seat.” It’s a good one. We have a lot of respect for you and what you’ve done in your career, Jeff, and look forward to continuing to interact with you.

 

Jeff Immelt  46:41  

Thanks. Nice talking to you.

 

Gary Bisbee  46:43  

New episodes will debut every Thursday. Join me in conversations to gain advice and wisdom from CEOs, presidents, and healthcare experts. Health care leadership is hard work, but it becomes more manageable as we learn from the remarkable lives and careers of our guests. I’ll see you there.

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