Ex-General Electric CEO Jeff Immelt on guiding the company through crisis and why leaders need to be ‘masters of chaos’

jeff immelt
Former GE CEO Jeff Immelt.

  • Jeff Immelt succeeded Jack Welch as the CEO of General Electric just after 9/11.
  • With Welch known as one of the best CEOs in the history of business, Immelt had big shoes to fill.
  • Immelt shared how he overcame challenges and what he would have done differently with The Profile.
  • See more stories on Insider’s business page.

Jeff Immelt’s first day as CEO at General Electric was on September 10, 2001. The next day, the terrorist attacks on the World Trade Center and the Pentagon shook the world, the financial markets, and GE’s business. The airplanes, one of them powered by GE engines, crashed into the WTC towers, which were insured by GE Capital.

At the time, GE was heavily invested in commercial aviation, insurance, and media – all three of which were rocked by September 11.

“It was the first terrorist event I had ever seen – that most Americans of my generation had ever seen,” Immelt told The Profile. “I think what you learn in a crisis is that good leaders absorb fear. They’re not accelerators of fear – they know how to manage a sense of calm while still being really clear about the challenges ahead.”

And unbeknownst to Immelt at the time, the challenges ahead were many. The terrorist attacks would be the first of a number of crises that Immelt had to grapple with in his time as CEO. He was at the helm of the company through the bursting of the dot com bubble, the Fukushima Daiichi nuclear disaster, the fall of Enron, and the 2008-09 financial crisis.

“You learn to hold two truths,” Immelt said. “You learn to say, ‘Things can always get worse, but here’s a dream that I have for the future, and I’m not going to give up on that.’ You learn how to make decisions even when you don’t know all the facts. In a crisis, you just got to make decisions.”

Read more: Wall Street legend Jim O’Shaughnessy talks Bitcoin, the psychology of stocks, and what young people should know about investing

Unfortunately, many of the decisions that Immelt made in his 16 years at the helm of GE did not pan out in his favor nor were they particularly popular. At one point during his tenure, he characterized his role as CEO in this way: “I feel like I want to vomit all the time.”

“I never felt sorry for myself, but it was just the pressure and the consequences of all the decisions, how little was known,” he said. “That period of time – it was just relentless.”

Immelt succeeded Jack Welch, who was largely considered to be one of the best CEOs in the history of business. He had led GE through two decades of extraordinary corporate prosperity, so when he named Immelt as his successor, the pressure to perform was immense.

Even though Welch was no longer CEO, his legacy loomed. He was regarded by many as the greatest leader of his era by people both inside and outside the company.

During the summer of 2001, Immelt went on a golf trip with his friends before it was publicly announced he was CEO. In the locker room, a member asked him what he did for work, and he simply said, “I work at GE.” The man looked at him and said, “GE, huh? I feel sorry for the poor son of a bitch who’s taking Jack Welch’s place.”

Shareholders blamed Immelt for his inability to turn the company around and for allowing GE to lose $150 billion of market value under his watch. In his new book, “Hot Seat: What I Learned Leading a Great American Company,” Immelt doesn’t make excuses: He takes responsibility for his missteps and lists the thorniest mistakes he regrets making in his time as CEO. They include failing to generate more shareholder value from GE Capital, missing an opportunity to reset the company in the early 2000s, and not developing a deep enough bench of rising leaders.

“It’s a complicated story, and I didn’t want to seem defensive, so I wanted to let the reader be the judge,” he said. “I thought it was important for people to see the totality. That’s why I decided to write the book.”

In this conversation, Immelt shares what he’s learned about leading in crisis, how he’s taken responsibility for the consequences of his decisions, and why he believes the next generation of founders and CEOs need to be masters of chaos.

(Below is an excerpt of the interview, but I encourage you to listen and watch the full interview here)

🎧 LISTEN:

🎬. WATCH:

Just to paint the picture here: Your predecessor Jack Welch was largely considered to be the best CEO in history.

IMMELT: Fortune magazine had named him the best manager of the previous century in the year 2000. That’s a pretty tough act to follow, but he was just very well known. He was a celebrity CEO – kind of like Elon Musk and Jeff Bezos all wrapped up into one. He had done a good job, and he’d done it for a long time. He was very charismatic, and so that was a pretty daunting task. That was the person whose shoes I was stepping into. That was my task in 2001.

When you were offered the job as CEO, did you ever think, “Those are really big shoes to fill. Maybe I’m not the right person for this?”

You know, I was a realist. There was no way not to think that his image would cast a shadow. That’s just the real world. But I never really wanted to be him. I was a very different person, and I felt like that the job that the company needed was going to be different, and you have to make a choice of how much to honor the past versus how much to push forward.

So when I was at GE, I was never critical of him for over really 16 years, but I always wanted to do things my way and work on things I felt were gaps inside the company. You just have to be really comfortable with that judgment without dwelling on it for too long.

I was in Tokyo in 2014, and I was being interviewed in front of 2,000 people by the Nikkei press. We were in the green room, and the person interviewing me says, “What was it like following Jack Welch?” And I was like, “I’ve been asked that question in 100 languages, 30,000 times over the last few years.” We kind of laughed about it, so we go out on stage, and the first question was, “What was it like following Jack Welch?” So you just get used to making it part of your repertoire even though I never really carried it as a burden in terms of what I thought was important to the company.

What was your relationship to Welch when you became CEO?

I had immense respect for Jack, but when someone’s that powerful inside the company, it’s hard to have a mentorship relationship. I had other mentors, but not him. We had about eight months of overlap where I got a chance to ask him a ton of questions, and he was very helpful then. And then I think over the first four or five years, we had a good relationship, but I think the financial crisis kind of changed the nature of our relationship and made it a little more difficult.

Even through the arc of my career, every tough problem I ever encountered, I would ask his opinion – even when I didn’t really like him that much or when he didn’t really like me that much. I would always ask him for his opinion because he had great judgment, and he knew the company. We both cared about the company in different ways.

From the outside, things looked great. Under Welch, GE had been the most valuable company on earth for a period of time. Can you discuss the reality of the business that you inherited?

The business model was kind of an old-line industrial company that generated a lot of cash. That cash would go to a financial service company. We had a 50% stale industrial company, and 50% financial.

The perception didn’t quite match reality. We understood that as we were taking over, and I had conversations with the board. And that’s what we said about re-investing in the industrial company to try and rejuvenate the business while still growing financial services. That’s the decision we made. That’s one of the challenges that every leader runs into – it’s how do you match perception with reality?

Looking back now, do you wish you had been more clear and transparent about the reality of the business at the time?

There was a window of time after 9/11 when I think people after a crisis have a chance to reset their companies and their narrative. There was probably a window at that time when I had a chance to kind of reset: lower earnings, less financial services, and a really clear path of how much our industrial businesses needed to be invested in in order to get them positioned for the 21st century.

It’s a long-winded way to answer your question, but the answer is yes. There was a window. I do look back on that as something I wish I had done.

The 2008 financial crisis shook GE to the core. You had missed your earning numbers three weeks after you promised to hit them. And then Welch went on CNBC, where he said that if you missed earnings again, he would “be shocked beyond belief, and get a gun out and shoot you.” What was your reaction in that moment and how did you handle that?

Yeah, I was really hurt because, in 2008, I had very carefully never looked backward or pointed a finger at him. It doesn’t matter who you are or what you’re doing, there are like five moments in your life when you just need a friend. You screwed up, you know you screwed up, and you need somebody to give you their hand and not smack your butt. And he chose to smack my butt, not give me his hand – and you remember that.

I never thought it would be a good thing for the company to see us bickering in public, so I never did that, but we had a very direct, private conversation. It was a line of demarcation in our relationship for sure. Even after that, when I had a really tough decision to make, I always called him – even when we weren’t friends. I thought he had a good perspective that I could learn from and listen to.

Let’s be clear – I knew I goofed up. I knew that, but I was trying to recover, and I needed a friend. I just needed a hand. And what he did was just the opposite of that. He made a two- to three-day story become a one-month story. It was unnecessary roughness.

In your time as CEO, it was crisis after crisis after crisis and a lot of turbulence in your professional life. How did you manage to have a solid personal life?

I’ve always been good at compartmentalizing. I’ve always been good at focusing on staying in the moment to focusing on what needs to happen and trying to separate that from other things that I’m working on.

The fact of the matter is that I have a really great wife and a great daughter. And they were always really unaffected by what I was doing. Clearly, they read things and heard things, but they were always into the person and not the business person. That was a blessing.

There were days when hundreds of thousands of people hated me, but one person loved me, and that was enough to keep persevering into the future.

Shares plunged nearly 30% since you took over the company. How do you respond to the people and the shareholders who feel genuinely angry at you for the decisions you made as CEO?

Look, the share price is important. It was $38 when I started as CEO, and it was $30 when I left. I understand that. I completely understand that, and I don’t run from that.

What I try to point out is that we generated almost $300 billion of cash and earnings over those 16 years. We had great businesses. We generated good leaders. In other words, the team really worked hard through different crises and did their best. That’s the best I can offer – a more complete story of what happened.

In the book, you have a section in which you list several of the thorniest mistakes you believe you made during your time at GE. Can you share the one mistake you regret the most?

We had good leaders, many of which are CEOs of companies today, but we ran the company for efficiency. We had eight big P&Ls. Having lived in Silicon Valley for a period of time, what I would’ve done differently is run the company with 100 P&Ls to give leaders more focus, accountability, and to make them more innovative earlier on.

A question from a Profile reader: “Although Jeff takes public responsibility for the overall volatility during his tenure at GE, if given the chance to do it over, what 3 things would he have done differently?”

I would’ve simplified the company even further, faster. I would’ve shed more businesses and doubled down. I would’ve made the company deeper. I would’ve actually driven the digital initiative even harder. I would’ve been even more determined and more dogmatic in that regard.

In this uncertain world we live in, you advise a lot of young founders in your capacity as a venture partner at NEA. How do you advise them to learn to become masters of chaos?

There’s this notion of holding two truths at the same time. Knowing that the world is unfair, that it’s really tough, and that just when you think things can’t get worse, they can. You also need to keep your head up and know that the best opportunities may come your way during COVID, or after 9/11, or during the financial crisis. What every young leader can do is understand that you can hold two truths at the same time. You must hold two truths at the same time. But only a select few can do that.

Read the original article on Business Insider

19 things you should never say to your coworkers

pregnant colleague
Never ask a coworker if she’s pregnant.

  • Having friends at work can make you more productive.
  • A 2019 article found positive work gossip can lead to friendships and warn others of bad managers.
  • But gossiping and being too comfortable at work can backfire.

Getting along with your coworkers is a beautiful thing. It can make your workday less dreary, help you focus better, and make you more productive.

While making work friends can be awkward, one way to break the ice is to start complaining.

Complaining about work tasks means you trust the other person not to spill your secrets, and can lead to closer friendships down the line, according to The Cut. One researcher calls productive work gossip “pro-social,” or gossip that can lead to warning your peers about difficult managers or other information that results in more productive work.

Some experts, however, warn against getting too chummy with your coworker. While some lighthearted gossiping can be positive, there are certain phrases or conversations that can make you sound unprofessional (and even harassing).

“In conversation, use a little common sense and discretion, especially when there are others present,” says Rosalinda Oropeza Randall, an etiquette and civility expert and the author of “Don’t Burp in the Boardroom.” “The general guideline is that if you wouldn’t say it in front of your boss, don’t say it.”

Aside from the obvious – like profanity and insults – here are some words and phrases you should never utter to your coworkers.

Don’t ask to borrow money

Most of us have forgotten to bring cash or our wallet to work once or twice. Randall says that in this rare occasion, it might be OK to ask your understanding coworker to borrow some money for lunch.

“But if your wallet is always in your ‘other purse,’ don’t be surprised if you’re excluded from future lunches,” she says.

Stop using the phrase ‘honestly’

Barbara Pachter, an etiquette expert and author of “The Essentials of Business Etiquette,” says that drawing attention to your honesty at that moment can lead people to wonder, “Aren’t you always honest with me?”

Don’t spread rumors

“Spread gossip, and you become labeled as a gossip,” says Vicky Oliver, author of “Bad Bosses, Crazy Coworkers & Other Office Idiots” and “Power Sales Words.”

“Negative comments about a coworker to another coworker will make you look worse than the person you’re talking about, and guess who will be the one who looks bad when it gets back to the person you’re talking about?” Randall says.

Don’t tell your coworker you like the way her pants fit on her

Be selective about what you compliment.

Commenting about a coworker’s physical appearance is considered unprofessional, Randall says – and worse, could be sexual harassment.

Don’t tell a coworker, ‘You people are always causing problems’

Topics like religion, politics, and child-rearing sometimes come up in the workplace, Randall says. But to negatively comment about any group is unwise and unprofessional, and it could get you in trouble for harassment.

Never ask a coworker if she’s pregnant

This question rarely results in a positive outcome.

“If your coworker is not pregnant, you have insulted her,” Oliver says. “If she is pregnant, she probably isn’t ready to discuss it yet. Keep observations like this to yourself.”

Don’t say, ‘I’m sorry to be a bother’

“Why are you saying you’re a bother?” Pachter asks.

And if you are truly sorry about something you haven’t done yet, why would you go ahead and do it anyway?

“Excuse me. Do you have a moment?” works much better, she says.

Don’t tell your coworkers you are looking for another job, or ask if they know who’s hiring

“Sharing this with your coworkers may cause them to instinctively distance themselves, knowing you will no longer be a part of the team,” Randall says.

“They also might unintentionally leak the information to your supervisor, which could explain your lack of productivity and absences, resulting in a poor reference or an invitation to pick up your paycheck earlier than you expected,” she says.

Don’t say: ‘See this rash? I’m expecting the lab results tomorrow.’

“Except for maybe your mom or spouse, no one really wants to see or hear about peculiar rashes or any nausea-inducing medical conditions,” Randall says. “Limit your sharing to a cold or headache.”

Try not to start all of your sentences with ‘I think’

Saying “I think” is sometimes acceptable, but only if you truly are unsure.

“Using ‘I think’ can make you appear wishy-washy,” Pachter says. When you know something, state it directly: “The meeting will be at 3 pm.”

Don’t tell a coworker you were surprised when she was asked to present

You might as well say, “It should have been me.”

“The professional response would be, ‘Congratulations,'” Randall says.

Don’t say: ‘Do you mind covering for me while I’m in Bora Bora?’

Flaunting your luxurious lifestyle with your colleagues may set off a jealousy epidemic, Oliver says. In general, it’s best to avoid bragging about how great your life is.

Don’t ask your coworker if you’re invited to a party you overheard him talk about

“This is the grown-up world – not everyone will be invited to everything,” Randall says. “Besides, are you prepared for the answer?”

Don’t tell your coworkers you’re stealing office supplies

You just admitted to stealing, a cause for termination and, at the very least, loss of trust, Randall says.

Don’t bring up personal relationship issues

“Intimate details about your personal relationships can divulge unfavorable information about you,” Randall says.

Sharing intimate details about your love life falls into the “too much information” category, she says, and “if it doesn’t enhance your professional image, or enrich workplace relationships, you should keep it to yourself.”

Don’t call your coworker a “credit snatcher”

Maybe your colleague or boss took credit for your work, but carping about the problem to your coworkers rarely helps, Oliver says. Instead, it’s best to address the issue with the person who took credit for your idea.

Don’t ask your coworkers how old they are

HR experts suggest colleagues avoid this topic. Someone might think you’re questioning their authority or abilities, or worse, could accuse you of age discrimination.

Don’t comment on your coworkers hair or ask to touch it

Commenting on a coworker’s hair or asking to touch it isn’t just inappropriate, it could be considered harassment or a racist microaggression.

Don’t tell your coworkers you’re suing the company

“Whether the charge is legitimate or not, spreading it around will not serve you well – just ask your attorney,” Randall says.

If you’re really suing your employer, it’s best to conduct yourself with discretion and dignity and continue to perform your duties to the best of your ability. If this becomes impossible, you should consider resigning, Randall says.

“But if this is your go-to threat when you’re unhappy about something, stop it,” she says.

Rachel Gillett contributed to an earlier version of this article.

Read the original article on Business Insider