Illustration by Ket-le / iStock; photo courtesy of Jeff Immelt

Dan Morrell: Hi, this is Dan Morrell, host of Skydeck. When Jeff Immelt graduated from HBS in 1982, he had job offers from Morgan Stanley and Boston Consulting Group. But Immelt had spent his second year at HBS reflecting on his career path, and he decided that he was more interested in being an operator than an investor, accepting a position with a lower salary at GE.

Jeff Immelt (MBA 1982)

Jeff Immelt (MBA 1982)

His initial plan was to spend five years or so at GE learning how to manage. Ultimately though, he would go on to spend 35 years at the company, becoming CEO in 2001. He was so dedicated to GE that, at age 50, he got the company's logo tattooed on his leg.

Immelt, now venture partner at New Enterprise Associates and a lecturer at Stanford's Graduate School of Business, recounts his history at GE in his recent book, Hot Seat: What I Learned Leading a Great American Company. And in this first episode of a special two-part Skydeck interview with Immelt, we talk about his rise to CEO, the challenge of enacting change at a massive scale, and what his experience at GE can teach large organizations about overcoming barriers to innovation.

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Dan Morrell: What made you want to stay at GE and make your career there? What was enticing about the mission and the work?

Jeff Immelt: Yeah, look. I think it's always a combination of things. So first of all, I had really good jobs, right? I liked the work I did. I liked the variety. But also the nature of the work I thought was, you know, great fun. I didn't have all great bosses, but I had a lot of really great bosses and mentors. And that was really important. I really felt challenged. You know? In other words, so much has been written about Jack Welch in subsequent years about what a hard-ass he was and things like that. But he actually was really … I thought it was challenging in a fun way. You know? Luck matters, right, in a big company. But I think in every company, luck matters. Early on, I got a job fixing rotary compressors in refrigerators.

DM: Mm-hmm [affirmative].

JI: I was leading, kind of, 7,000 people. I was 32 years old. It was the biggest product recall in the history of GE. So it was a crisis every day. And I ended up in the boardroom, like, once a month for 18 months. That kind of thing.

DM: [laughs]

JI: I told my wife, look, I'm going to get fired.

DM: [laughs]

JI: Just [laughing] so you know. We had a little baby at home and things like that. And you know, it turned out that that was like the best job I could've had. That was pure luck in many ways, of getting a crisis job that didn't kill me where I learned a lot early in my career. That was a fantastic opportunity for me.

DM: And then, speaking of Jack Welch, ultimately you get into a three-way race at GE for the CEO position, to succeed Jack Welch. And you get the call on Thanksgiving in 2000 that you will indeed be the successor. You're going to be the CEO of GE. And you made it a point in the book to note that Jack didn't tell you why you got the job. And I wonder: Why do you think you were named the CEO?

JI: Yeah, no, it's a, it's a great question. So, look, you know, Dan, it was a grueling process, just grueling. Public and, you know, Jack was like the most famous business leader probably in the history of the world. Because, you know, the markets were booming. He was really famous. And so, you know, it was all like spotlights all the time. So it was an exhausting process.

He told all three of us that if we didn't get the job, we had to leave the company. Which was really shocking to me. You know, I, I kind of said, "Look, you're kidding, right?"

DM: [laughs]

JI: He said, "No, that's the way I want it."

And I said, "Okay. You know, if that's the way it is, that's the way it is."

So, and then, when I got the job, he didn't really explain why. And I don't think he did to the other two in terms of why they didn't. The way I've answered the question over the years is, you know, like, I was a good peer, you know? In other words … in big companies the people that work for you kind of have to like you. And the people that you work for kind of have to like you. But your peer relationships, you have to earn. And, you know, over the course of my career and a number of different jobs, I was always one to reach out, to try to help, to be supportive. And I think at the end of the day, that came through. But, you know, that's the only assessment I would give.

DM: You think you earned this reputation through mutual respect. That you would, you know ...

JI: Yeah. And doing things when I didn't need it. I wasn't building these relationships because I wanted something.

DM: Yeah.

JI: I was legitimately building relationships because I wanted to be helpful or I wanted to learn or I wanted to be a good colleague or I wanted to be a good friend. And I think people see that. You know? And when I give advice to CEOs today, or to other leaders, I always say you build relationships out of sequence. You build relationships when you don't need anything. And even when I was CEO, I would reach out to other CEOs, I would reach out to other leaders not to ask favors but to say, "Hey, how's it going?" Or, "I read an article today in the Journal. I know you're in the crosshairs right now. Anything I can do to be helpful?" You know, things like that. And I just don't think that people spend enough time on that.

DM: But Jeff, do you think that that's just part of your nature? That's just inherently part of who you are and that's part of why it made you successful?

JI: I think careers are built on having a good education, what you learn. Having a set of experiences that you can learn from. But also things you learn from your parents. Right? Also just, you know, perseverance or curiosity. You kind of learn at your parent's knee.

DM: Mm-hmm [affirmative].

JI: And, and I do think that you know, in my life, you know, I was a math nerd and a football player. Kind of ...

DM: [laughs]

JI: ... okay? I was a math nerd ...

DM: It's a rare breed.

JI: ... a very rare breed [laughing]. But I loved problem-solving. But I also liked team sports. I liked doing things as a collective. And so I think this, this willingness to connect or be a connector is something you kind of learn innately as you're growing up.

DM: Yeah. And I want to talk to you more about that, Jeff. Because, you talk in the book about all that your parents instilled in you as a child. All these maxims, right? Teaching you to deal with a problem when it's small. That fair is fair. Unless you're early, you're late. But how do you think your upbringing shaped the way that you managed and led?

JI: Yeah, look, I mean, I think it's a combination of things, right? One is just the lessons your parents teach you. Right? Like treat people with respect. Fair is fair. You can fix it. You know, my parents were always like, you know, complaining is for losers. You can fix it. You know? So all of those things.

It was a classic middle-class background. You know, my summer jobs were working in factories, not like office internships. So, in later years, you know, like working with the union leader at GE, I had a strange affinity with him because I actually had done work in my life. So kind of the nature of the people you grew up with. And, I think when you're in a classic middle-class background, nobody really cares, like, where you went to school [laughing]. Like, you know, if it's ...

DM: [laughs]

JI: ... it's all about, like, who you are and can you bring heat ? So I think the combination of all those things kind of drove an ambition but always kept me in touch with the kind of person I wanted to be. The way I wanted to act and live my life and things like that.

DM: Jeff, I want to talk about one of the prominent initiatives that you get into in the book and that's Ecomagination. 'Cause it was really interesting to read about the sort of genesis and history of that 'cause it felt like it was so ahead of its time.

Ecomagination was an internal program dedicated to sustainability and reducing the company's environmental impact. Now it launched in 2005 and it has been, as you note, one of the most successful commercial efforts in GE's history. But again, it was radical. Or it felt radical at the time. Now 16 years later, this kind of commitment to sustainability feels kind of like table stakes for most corporations. And the question is, what do you think pushed this change across the business world? What has made it the rule rather than the exception these days?

JI: Yeah, you know, Dan, so one of the advantages of being in a conglomerate is you can see trends earlier, right? So if you go back to 2004 and 2005, I could see, like, energy efficiency in our appliance business. I could see fuel efficiency in our jet engine business. I could see green awareness in our media business. And so, we could connect the dots maybe in ways that other people couldn't. So that's number one.

Number two is, from the get go, our notion was green is green. Right? So this is not a feel good marketing campaign. This is really because this is the wave of business productivity, business money making things like that. And we decided to put both our, let's say, our technology behind it, our financial resources behind it, but also our reputation. And that was risky, because we also owned the biggest Superfund site in the US, which was the Hudson River and so, like, lots of people inside the company were against it. Outside the company were cynical. So you had to fight through all that stuff. And so any initiative like that requires, you know, private innovation and public, let's say public policy support, right? And so we were early and had to kind of slug it out as time went on.

Now, the reflection I would give Dan, is that, you know, change happens slowly and then all at once. Right? So in some way, shape, or form, you know, cleantech investing has happened over decades. Not just, not just now. But I think what you see today are probably two or three things coming together. Like one is the innovation in technology is not just able to solve climate problems, but it can do so economically. Right? So, you know, it used to be, okay, what do you want? Do you want to pay a low price or do you want green? Now those two are converging. So that's number one. Number two, I think you have a clearer set of political guidelines today—certainly with Biden as president—than you've had in the past. And three, I think the younger generation just demands it. So you have a generation of people who don't see it as a trade-off. They see it as an imperative. And those three things come together.

Now, what does that mean for people that are listening to the podcast or to the business leaders? Look, in order to drive change you need stamina, right? Investing in batteries in the 2000s, it was a graveyard. Investing in batteries in 2012, you were an idiot if you did it now. Now, everybody's doing it, right? So, it was always the same idea. It wasn't like somebody had a new idea. You just—you had to stay on the dance floor until change came your way. So I think people frequently give up before their day comes, because change happens slowly. And I think one of the things for your [laughing] business school students today, you got to teach a course on stamina because ...

DM: [laughs]

JI: ... because change, you know, now it looks obvious, right? You say, duh. You know? Global warming's existential. But unless you put yourself in a time machine and went back 15 or 20 years, you're not going to be ready for it today. And so I think, lots of things came together now to make it so obvious when it wasn't obvious before.

DM: Well let's stay on that topic of change because there was this great section in the book where you talk about reticence to change within the organization and the context was GE Digital.

JI: Yup.

DM: You were building GE Digital in 2011 and 2012. And there's this great phrase, and I forget who to attribute it to, but someone called them GE Antibodies—that came and tried to kill this potential for change. And I love that term. And I wondered what your experience with GE Digital, and coming up against some of those barriers, can teach large organizations about overcoming barriers to innovation.

JI: You know, it's a great question because, again, I'd say with GE Digital, we were early, right? So we started in 2009. You know, we kind of invented the phrase industrial internet. And there was nobody really to work with when we started. So you know, we invested money and things like that. So again, I go back to the point on stamina, where, in the case of GE Digital—sure there was pushback, but there was pushback for Ecomagination as well. It just requires year after year of kind of pushing through the system. And I think in the case of GE Digital, I just didn't have enough migrants. You know, I didn't have enough people that were migrating to the point that I had with Ecomagination and globalization and others.

Now, when you're driving change, particularly in a big organization, you can't listen all the time. So, in other words, one of the things I learned from Jack was the power of being irrational. And that sometimes in big companies, you know, you always have to listen, but sometimes you, you can't let people slow you down because they're not really trying to help. What they're really saying is, "I don't want to do this." And in big companies, you need, occasionally, to be accused of not listening [laughing].

DM: [laughs]

JI: You know, and run the risk of people pushing back because change is hard, right? And, and, and maybe 10 percent of the organization is saying, "Hey, I know a way to make this better." But 90 percent is saying, [laughs] "I don't want to. Sorry." And I think what happened, unfortunately, with GE Digital, is we paid too much attention to people who said, "I don't want to." And not enough to, "Here's how we make it better."

Now, let's look at 2021, right? So we started at the same time as a company called C3 AI. They just went public with a 10 or 15 billion dollar market cap. So the world's happening, right? You know, change happens slowly and then all at once. [laughing] So you got to stay on the dance floor for long enough. In the case of GE Digital we didn't. We just didn't. Look, let's make it modern day. Let's say you're a CEO and you want … you think it's best for your company to have everybody to go back physically to the workplace.

DM: Right.

JI: Let me tell you. In order to do that, you're going to have to put your foot down. And you're going to have to be willing to have half of the organization say, "You know what? She's just not listening to me. She's just not—she doesn't understand. She's not listening." And, and that's what good leaders do. Right? They listen to people all the time. But they know when they have to enforce their will on the organization. And there's lots of antibodies that want to push back.

Skydeck is produced by the External Relations department at Harvard Business School and edited by Craig McDonald. It is available at iTunes and wherever you get your favorite podcasts. For more information or to find archived episodes, visit alumni.hbs.edu/skydeck.

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