Former General Electric CEO Jeff Immelt sat down with Yahoo Finance’s Julia La Roche to discuss his new book ‘Hot Seat: What I Learned Leading a Great American Company,’ his relationship with his predecessor Jack Welch, and the lesson learnt from his time as CEO of General Electric.
JULIA LA ROCHE: Jeff Immelt is the former CEO of GE. He served in that role from September 2001 until summer of 2017. Now, Jeff Immelt, for a lot of folks, they pointed to him as the person to blame for GE's challenges and its decline. He acknowledges that while his legacy was controversial and that his tenure had ended badly, he is here for the first time to share his side of the story in a new book called "Hot Seat, A Memoir of Leadership in Times of Crisis."
Jeff, welcome. And as I was just referencing the book you wrote, you were talking about how a lot of folks really blamed you for what happened to GE and that you're here sharing your story for the first time. And it seems that there are two kind of conflicting storylines that you got dealt a really bad hand, and then the other storyline is that you made a lot of mistakes. What happened to GE?
JEFF IMMELT: Well, look, I think, Julia, I put it-- again, this wasn't my attempt to tell my side of the story. It was really an attempt to tell a more complete story about GE both for the people that I worked with, but also to kind of talk to leaders about how to manage through a crisis. On one side of the ledger, the company had record earnings. Our businesses were market leaders. We developed a lot of good leaders. We had good initiatives. GE was an admired company. In 2017, GE was number 7 on Fortune list of most admired companies.
The other side of the ledger is, you know, look, the stock didn't work. GE Capital over 15 or 16 years, we just weren't able to generate the kind of value we should have through that. And at the end, I really gave the company and the board too many things to work on. But I wanted to tell a more complete story about the company, Julia, just to-- really on behalf of the people that I worked with.
JULIA LA ROCHE: We'll start to get into that as well. And some of the things that stood out to me in the book, Jeff, is just how straightforward you were with how you felt. For example, when you left the company in the summer of 2017 and that stock price went up, and you stayed quiet for several years. You didn't criticize the new leadership.
And you talked about how some folks were saying, hey, you must have really thick skin. But even having thick skin, it doesn't, I guess, protect you from the haters or having certain kind of feelings. What was that like for you going through that? And why did you feel the need to speak out now? What was the impetus for it?
JEFF IMMELT: Yeah, you know, people always talk about-- said to me, you must have thick skin. But nobody has thick skin. They just choose to take a certain path. I love the company. I tried my best. Some things worked, some things didn't. I own the things that didn't work. When I left the company, I needed time and space to heal. I moved to the west coast. I started working with small companies. I started teaching. It just gave me time to reflect and to think.
Over the course of that time, Julia, I've had a chance to watch the way the company has been covered. It just hasn't been complete, and it hasn't been fair. And I think I owe it to my colleagues to give them-- to paint a more complete picture of a complicated situation, but a company where people really did their best every day. And that's what I've tried to do in "Hot Seat." Really, and Julia, in "Hot Seat," I'm harder on myself than I am on anybody else. I'm very, very reflective and self-critical, as I should be. But I want the people that I worked with to be proud of the things they did.
JULIA LA ROCHE: You know, you were there for, what, 35 years. A lot of folks will find out that you actually have the tattoo of the GE logo. It's called the meatball. I think it was on your left hip. You got that in 2005. And you were just kind of talking about wanting to tell a more complete story. And you often would ask people tell me something about GE that I don't know. Obviously, you know the company well. Tell our viewers something about this company that they don't know.
JEFF IMMELT: Well, look, I think GE got to a lot of important initiatives before others. We developed, I think, the strongest global footprint, the strongest global framework. We invested in digital technologies long before others did. We had really groundbreaking businesses and life sciences and renewable energies.
I took the advantage, Julia, on one page at the end of chapter 11, I kind of said, here's what I'd like you to know about GE. Because, again, I didn't want the book to seem defensive, but I did want to leave the reader with the perspective that it's not all bad, that this is a company that did a lot of good things. And that's what I hope people can recognize as they read the book.
JULIA LA ROCHE: Mm-hmm. We should talk about your predecessor, Jack Welch, and I mean, it's interesting. I think a lot of folks kind of had this view of him. He was named manager of the century in the year 2000. You spent two decades there. Kind of-- I don't know if he became the first celebrity CEO, but at least one that was very well recognized, a household name.
You address his less than perfect legacy, and you talk about him being a hero to you. You felt that, but obviously, that relationship evolved over time, maybe a little-- I don't know if the word is contentious, but definitely some times where he would say things publicly about you. Talk to us about the evolution of that relationship with Jack Welch.
JEFF IMMELT: Yeah, great leader of his time. I loved working for him. He was fun. He was interesting. He was challenging. But the world really changed around the time that Jack retired. It became more technical, more global, more social, more transparency. And so the GE that I was leading in the 21st century was very different than the GE that he led for a long time.
You know, it was a complicated relationship in that he wasn't always necessarily supportive when I needed him. But any time I was in a pinch, he was a person that I called. You know, in 2009, we had to face the decision to cut the dividend. It was one of the hardest decisions I ever made. And despite the fact that we were at a difficult position in our relationship, he was the first guy I called, so I valued him all the time that we coexisted.
And I have to say, Julia, when he died, I was extremely sad. And I was particularly sad to see the way he was covered in the terms of for somebody that did so many good things, I thought the retrospective wasn't quite fair. And I think, Julia, what we-- you know, we just live in a hater's world. There's a world without nuance today. And it's OK for somebody to be really good and not perfect, and that was Jack. He was really great, but he wasn't perfect.
JULIA LA ROCHE: Mm-hmm. I mean, you did bring up some moments in the book, including him going on-- he went on CNBC and criticized you for missing earnings. He said he'd-- I think he said he'd get a gun out or something. And I mean, talk to us about why you were sharing those moments as well. It did paint a different side of Jack Welch that maybe not everyone got to see.
JEFF IMMELT: Yeah, you know, Julia, so when I wrote the book, I had 75 people be interviewed. And what I tried to do was paint a complete picture of, you know, what I did, why I did it, and how I felt. And so, in order to do that kind of review, you have to talk about some things that are painful and maybe bring them up for the first time. Really, for most of, really, my whole life, my whole career, my whole time as CEO, I never really said anything negative about him because I felt like that was important for the GE family.
But, you know, in the space of time, what I wanted to do here was tell a complete story-- the good and the bad. And really, you know, the vast majority of stories I tell are great about people. And I think you can see by the stories I tell about Jack, how much I loved him and respected him.
JULIA LA ROCHE: Yeah. Let's talk about some of the other areas that you explore in the book, including, you know, I guess, after you left, and again, you kept quiet. But you did share some of the stories kind of leading up to that moment that you decide to leave, and then the company even after.
So I guess in the lead-up here, you talked about, you know, even contemplating resigning during the recession and also-- but also toward the end, I guess around the time of the Alstrom deal, wanting more time from the board. Talk to us about that kind of thought process. And do you think if you left earlier, things would have been different? Or do you think-- how do you think things would've been different if you got more time?
JEFF IMMELT: Yeah, look, I mean, I think during the financial crisis, it's-- you know, we live in COVID today, and COVID has been a horrible time for the world and for business and for leaders and CEOs. The financial crisis for a time period of six months or nine months just were really debilitating. And it was completely-- I would say, keeping your head up during that time was really critical. And after we cut the dividend in 2009, I considered retiring at that point, just because the energy that it would take to bring the company back was something that I thought would be, you know-- I just wanted to make sure that I had that in me to get through it.
And then at the end, you know, really, it was hard to kind of say what was the right time to leave. I think if I had left the 2015 after we announced Project Hubble with GE Capital, you know, things would certainly have been different and better for me. But, you know, I didn't really think about it at that time. And, you know, it just was, given the events of around 2017 and '16, it was just a difficult transition time for the board and for me. And, you know, we did the best we could, but it didn't work the way any of us would have wanted it to.
JULIA LA ROCHE: How about after you left with the new management team in place? John Flannery didn't stay very long, but what went wrong there? You did talk about kind of this company. And it was-- I think the quote was, people created a culture defined by victimhood. What do you mean by that?
JEFF IMMELT: Yeah, so I think with John, I created lots of problems for John. I own that. I supported John, and I wanted him to do well. He had to deal with things that really, I had hope we wouldn't leave. But at the same time, I think the job was to lead the company forward. And I rooted for John. I hoped he was successful. But frequently, kind of inside the company, it just seemed from the outside, things were coming apart, and it ended faster for him than certainly any of us wanted. But I own a piece of that and need to be very forthright in that respect.
JULIA LA ROCHE: Mm-hmm. I have kind of a question just about GE, and I'm trying to understand it. Why do you think there's so much emotion around the company? It just seems like there's so much emotion around it. Why do you think that is? A lot of folks really care about it, and a lot of folks, you know, have been following the story. And a lot of folks have been very critical of it as well. Why is there the emotion?
JEFF IMMELT: Yeah, look, it's-- I think the good part about the company is, it's been an important company for a long time. It's been a place that's developed leaders. It's been a place that's gotten things-- gotten first to some key initiatives and launched them. It's been a part of the kind of American business story for a long time. So I think people care about that. And they have every right to be supportive and/or critical if that's what they choose because that's-- it's been a high profile company. So I think that just comes with the territory.
JULIA LA ROCHE: You mentioned in the book a few-- it was that you gave a list of some of the mistakes that you made. You own your mistakes. I guess, kind of looking back, Jeff, what would you say would be your biggest regret?
JEFF IMMELT: You know, Julia, I would say, again, I go all the way back in time. I had a choice right after 9/11 to reset the company to really invest hard on the industrial side and slow down the GE Capital growth at that time. I made a choice to allow financial services to continue to grow and while reinvesting in the industrial side. And by 2007 or 2008, that didn't look very smart when we got to the financial crisis. And so, I'd say that was probably the most seismic error.
And I think what you can learn from that is that for any CEO or any leader, take the time sometimes to go slow and think very long term about your company. And I think I was thinking kind of coming out of 9/11 maybe too short term versus really thinking about five or 10 years downstream. And we paid a price for that. The financial crisis was a very challenging time for GE because we were a big finance company, big wholesale-funded finance company. And that was what really got destroyed during the Lehman Brothers bankruptcy.
JULIA LA ROCHE: Jeff Immelt is the former CEO of GE and the author of the new book, "Hot Seat, A Memoir of Leadership in Times of Crisis." Jeff Immelt, I thank you so much for your time.
JEFF IMMELT: Thank you. Thanks. Good to be with you.