Jeffrey Immelt Says He May Have Overstayed At General Electric
General Electric Co.’s Jeffrey Immelt, who cut his ties with the company about three months ahead of schedule, retiring as chairman and leaving the board, said he may have stayed on at the company a little too long.
It’s been GE’s philosophy to give its investors 10 years, Immelt said in an interview to Carlyle Group co-Founder David Rubenstein on Bloomberg’s Peer to Peer Conversations. “I think 16 years is on the outer edge of how long somebody should be running a company like GE.”
Here are edited excerpts from the conversation.
Is a big burden off your shoulders now?
I do think if you are doing the job well, you do feel ownership and you wear that 24 hours a day, seven days a week. I think 16 years is a long time to run a company and I am starting to feel a little bit of decompression.
Is it too long to run a publicly traded company for someone like you?
I think there is right time and a wrong time for doing it. A company our size, you need to be able to run it long enough to make a difference, shape strategy. And it’s been our philosophy to give our CEOs 10 years. At the same time, it is good to get a set of new eyes on things. As things change...you develop habits, are you listening as closely as you need to. Personally I think 16 years is on the outer edge of how long somebody should be running a company like GE.
Why did you have to globalise GE? Wasn’t it already a very global company?
No. Until 1982, we were 80 percent of the United States, by 2011 we were still 70 percent. The decade of the 90s was kind of the quintessential American decade. This place was booming, this place was easy to grow your companies. So despite the fact that we were an old company, we weren’t as global and that was one of the central missions, the leadership team over the past 15 years, and I would argue today, we are maybe the best global company, in terms of multinationals. We are 70 percent outside the United States, we have a very strong footprint in any country that matters.
Why weren’t the emerging markets so important to you?
I think there are two ways to globalize. One is you go to Washington DC, you trade a deal, you go to Davos, think you can cut a deal. The other way is, hire 10,000 people in a country and say, let’s go win the customer. That’s the kind of approach we have taken. So I would say we are good in China because we understand the Five-Year Plans, we built a strong team. We go outside Shanghai and Beijing, Any country we are in, we go from the bottom up.
What was the culture that you inherited and how did you change it?
A company like GE is a study in how do you mix skill, how do you make scale, how you size an advantage, and not a disadvantage. Because inherently, size means bureaucracy, there is no two ways to go about it. So the company I grew up in was very process driven and very centralised. You could do that because we were basically an American company. But when you are vastly more global, you can’t have people in Boston making decisions for people in Brazil. So we had to become more decentralised. And when you become more decentralised, you have to become more risk-based. So in other words, you ask me to invest in a gas turbine power plant in Nigeria, I say yes, not because of it’s safe, but because if we are right, we make this much money, and if we are wrong we lose this much money.
You ask me to invest in a nuclear facility in India, I say no. Because if you are right you make $7 million, and if you are wrong, you lose $7 trillion. So you learn to develop managers that is more risk-based, you put bigger leaders into the field, and I think that’s the way you can survive at the time we live in today.
The most important lessons you learned as the CEO of GE?
The future always comes. So the notion that, I hope this doesn’t happen – kind of nervous laughter is a bad strategy. So the notion that the future always comes, live in markets – if you are a business person today and you turned your back on China, you are crazy. And then give full of yourself. Every person who works for you, they have their own story. They have their family, their aspirations, give full of yourself to everybody you meet. And those are the couple of things I have learned.
Watch the full interview here.