When we start a new job or are promoted into a new role, usually we can count on a honeymoon period of a few weeks or months. Jeff Immelt had only one day of grace when he took the helm of Gnereal Electric on Sept. 10, 2001. The next day airliners under terrorist control slammed into buildings and his honeymoon was over.
“We’d soon learn that GE was connected to nearly every part of the tragedy,” he writes in his new book Hot Seat. Planes powered by GE engines had just destroyed real estate insured by GE. The company held all the reinsurance on 7 World Trade Center, which collapsed. Two employees lost their lives – one working at the Trade Center and the other a passenger on one of the aircraft. NBC, the television network he was watching, was also part of the conglomerate and he quickly cancelled commercials so as not to be seen to be profiting from the tragedy. To protect his airline engines business he would authorize loans in the tens of billions of dollars to the struggling carriers.
“The best leaders absorb fear,” he writes. “I’m not talking about soothing people by blowing smoke or giving false assurances. I’m talking about giving people the truth but also giving them a way forward.”
Leaders aren’t made of steel, however. They are human. His people didn’t know he was so agitated that he was struggling to keep food down. Later during the financial crisis of 2008 – GE Capital was the largest nonbank finance company in the world – Mr. Immelt took to regularly showering in the little bathroom next to his office, in order to relax under the pounding water. Attracted to salty snacks under stress, he ate so many cheddar Goldfish crackers that at one point he realized he could only squeeze into one of his many suits. During the near-meltdown at the Fukushima Daiichi nuclear reactor, powered by GE reactors, he went sleepless for several days. He says leaders have to be seen solving problems. But real leaders also have emotions.
He makes an interesting comparison between 9/11 and the financial crisis that helps to illuminate our current pandemic. Most of the key facts in the terrorist attack were known by noon that day. “During the financial crisis, by contrast, it often felt like you knew nothing about anything. And that not knowing lasted for years,” he observes. By the end of it, everyone knew that “tail risk” -- events unlikely to happen but with powerful consequences if they did – was real. We were reminded of that again in March, 2020.
He leaned heavily on the dynamic complexity notion propounded by systems scientist Peter Senge: Increasingly in these tumultuous times, the effects of a leader’s actions or decisions is not immediately obvious but only becomes clear over time. That means conventional methods of forecasting and planning don’t work. Indeed, carving out a detailed plan could be exactly the wrong move.
When he saw an opportunity to divest GE Capital after it came under enhanced regulation and was depressing the stock price, he found himself trapped in a tortuous, twisted process that he might not have launched had it been evident from the outset. “I have to say that it was key during this period that we didn’t know what we didn’t know,” he says. “If you wait for the perfect moment, when everything is crystal clear, you will often wait forever.”
Taking over from the man who was hailed as the greatest CEO of the 20th century was a mug’s game. He felt Mr. Welch was not as good as his press clippings and had changes he wanted to institute. But he was diplomatic as he made those shifts. When Mr. Immelt failed to deliver on first-quarter forecasts in the financial crisis, Mr. Welch, on television, threatened to kill him. In public, Mr. Immelt said nothing. In private, he reamed out his former boss for stabbing him in the back, deciding Mr. Welch was criticizing him to promote his own brand. That essentially ended their relationship but it offers us reminders about how tricky succession can be in our own work life.
Alone at the top, eager for information, Mr. Immelt arranged a unique series of one-on-ones with senior leaders in the different branches of the sprawling conglomerate. Once a month, on a Friday evening, he and his wife would share pappardelle and salmon at a casual Italian restaurant near their New Canaan, Conn., home with the invited leader and their spouse or partner.
The next day the two GE officials would meet for four hours in Mr. Immelt’s office. “Tell me something about GE I don’t know,” he would begin. Other go-to questions: Who is your favourite boss you’ve had at GE? How did you solve a problem you created? Why is your business important to GE? Who are the leaders you are developing?
He says the weekends were like job reviews on steroids. Usually one-on-ones are short. This was leisurely, but deep. “Building a strong connection to the people you work with is about two things: Time and truth. You’ve got to spend the time and you’ve got to tell the truth,” he says.
- Greenwashing has its equivalent in diversity when companies with few people of colour burnish their image with website photos showing meetings jammed with them, university departments seek students from more diverse faculties to populate their promotional packages, and leaders certify that some of their best friends are gay. University of Denver law professor Nancy Leong illuminates this phenomenon in her book Identity Capitalists and offers four watchwords: Honesty, apology, education and authenticity.
- This is a good time to cherry-pick for your organization amazing talent with a customer orientation from the struggling retail and hospital sector, advises recruiting specialist John Sullivan. Their skills invariably include human relations, organizational prowess, empathy, two-way communications, listening, memory, negotiation skills and the ability to operate in a low margin situation.
- The right solution can be expensive but the wrong one can cost a fortune says blogger Shane Parrish.
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