By John A. Bryne
A candid conversation with the CEO of General Electric about leadership, creativity, fear — and what it’s really like to run the world’s most influential company.
The year Jeff Immelt’s career almost blew up was 1994. He was vice president and general manager of GE Plastics Americas, and his division was caught in a classic profit squeeze — the crunch that comes when raw-material costs rise and a company is locked into fixed-price contracts with customers. Instead of making his 20% profit-growth goal, he delivered earnings growth of just 7%. The upshot: Immelt missed his net-income number by $50 million.
At General Electric’s annual leadership meeting in Boca Raton, Florida, in January of 1995, Immelt arrived late for dinner each evening and went to bed early — hoping to avoid a tough talk with his legendary boss, Jack Welch, about his poor performance. But on the last night of the meeting, he felt a hand on his shoulder just as he was rushing off to the elevator and his room. It was Welch.
“Jeff, I’m your biggest fan, but you just had the worst year in the company,” Welch said sternly.
“Just the worst year. I love you, and I know you can do better. But I’m going to take you out if you can’t get it fixed.”
“Look,” Immelt answered, “if the results aren’t where they should be, you won’t have to fire me because I’m going to leave on my own.”
The story, of course, has a fairy-tale ending. And that’s probably why Immelt often tells it. “It was definitely the most painful period of my career,” he says. “Even though I came close to being fired, I never considered quitting. I knew the issues were my fault, and I didn’t want to let my people down.” Besides, he adds, “surviving a failure gives you more self-confidence. Failures are great learning tools — but they must be kept to a minimum.”
Read the rest of the interview …