By Jeff Immelt with Amy Wallace
A memoir of successful leadership in times of crisis: the former CEO of General Electric, named one of the “World’s Best CEOs” three times by Barron’s, shares the hard-won lessons he learned from his experience leading GE immediately after 9/11, through the economic devastation of the 2008–09 financial crisis, and into an increasingly globalized world.
In September 2001, Jeff Immelt replaced the most famous CEO in history, Jack Welch, at the helm of General Electric. Less than a week into his tenure, the 9/11 terrorist attacks shook the nation, and the company, to its core. GE was connected to nearly every part of the tragedy—GE-financed planes powered by GE-manufactured engines had just destroyed real estate that was insured by GE-issued policies. Facing an unprecedented situation, Immelt knew his response would set the tone for businesses everywhere that looked to GE—one of America’s biggest and most-heralded corporations—for direction. No pressure.
Over the next sixteen years, Immelt would lead GE through many more dire moments, from the 2008–09 Global Financial Crisis to the 2011 meltdown of Fukushima’s nuclear reactors, which were designed by GE. But Immelt’s biggest challenge was inherited: Welch had handed over a company that had great people, but was short on innovation. Immelt set out to change GE’s focus by making it more global, more rooted in technology, and more diverse. But the stock market rarely rewarded his efforts, and GE struggled.
In Hot Seat, Immelt offers a rigorous, candid interrogation of himself and his tenure, detailing for the first time his proudest moments and his biggest mistakes. The most crucial component of leadership, he writes, is the willingness to make decisions. But knowing what to do is a thousand times easier than knowing when to do it. Perseverance, combined with clear communication, can ensure progress, if not perfection, he says. That won’t protect any CEO from second-guessing, but Immelt explains how he’s pushed through even the most withering criticism: by staying focused on his team and the goals they tried to achieve. As the business world continues to be rocked by stunning economic upheaval, Hot Seat is an urgently needed, and unusually raw, source of authoritative guidance for decisive leadership in uncertain times.
“The son of a GE worker, Immelt assumed the top position in 2001 after rising through the ranks as the company was being reshaped by former CEO Jack Welch. He opens his memoir by recounting a discomfiting couple of hours at the Stanford Graduate School of Business, where one student asked point-blank, “How could you let this happen?” The “this” in question was a long decline as Immelt tried to shift the culture and direction of a company “where perception didn’t equal reality.” As the author writes ruefully, ideas were scarce and inertia reigned. His leadership lessons are both hortatory (“Leaders show up”) and critical. He writes, for instance, that Welch had surrounded himself with yes men and gotten bogged down in faddish management tools such as Six Sigma even as the company was overrun by finance types at the expense of engineers. By the time he took over, the largest share of GE’s business came from its insurance sector rather than from anything it made. “Transforming a big legacy company requires persistence,” writes the author. It also requires the right aides and key staff, and in this, Immelt was ill-served by ambitious managers—one in particular he thinks he should have fired despite that person’s being protected by the board of directors. He also opines that his successor as CEO, whose tenure was brief, was the wrong person for the job: “It seemed to me,” he writes, “that [John] Flannery couldn’t make decisions.” In the end, Immelt writes in an unforgivingly self-critical spirit, he took on too many projects. “I did not develop a deep enough bench of rising leaders” to help with these initiatives, he writes, adding, “I wish I had said ‘I don’t know’ more frequently.”
A valuable book full of lessons for business students and would-be leaders.”
Why would Jeff Immelt write a book about his troubled tenure as General Electric’s CEO from 2001 to 2017? He confronts that question on page one. “My tenure had ended badly,” he acknowledges in the first paragraph of Hot Seat: What I Learned Leading a Great American Company. “My legacy was, at best, controversial … Maybe it would be better not to write a book at all.”
He changed his mind in 2018; an article I wrote played an indirect role. He decided to tell the story of why he did what he did, to own up to mistakes, distill what he had learned, and defend himself against criticism he considers unmerited. He does it engagingly and candidly, emphasizing his successes while admitting to errors of judgment and action.
After years of refusing to criticize his celebrated predecessor, Jack Welch, Immelt blames him for leaving behind messes that had to be cleaned up. Yet he writes that he called Welch for advice in the financial crisis—a period so traumatic for Immelt that, he reveals, he briefly planned to resign after being forced to cut GE’s dividend for the first time since 1938. He confirms that he was pushed out of his job suddenly, after a disastrous performance before a group of Wall Street analysts. He also explains why GE’s famous round logo is tattooed on his left hip.
Immelt’s story is not ultimately a happy one. The hard fact remains that GE today is a mere remnant of what it was when he became CEO. This book is his telling of what the hell happened.
– Geoff Colvin
It is a given that we learn more from our mistakes than our successes. Many chief executives, however, operate on a default setting of can-do optimism. Asked to revisit their failures, they naturally hesitate, unless they can depict them as way-stations on the road to inevitable glory. Hot Seat is a valuable addition, then, to a tiny sub-genre.
As Jeff Immelt, former chief executive of General Electric, puts it: “Many business books begin with a tacit promise: ‘Let me tell you how to be like me, an unmitigated success!’ Clearly, I couldn’t say that.” His 16-year tenure at the top of the storied industrial group was followed by a chaotic decline in the stock price and reputation of GE. Many accounts, including last year’s Lights Out, by two Wall Street Journal reporters, lay the blame largely at Immelt’s door.
This book tries to set the record straight. Steve Bolze, former head of GE Power, a locus for GE’s later problems, Nelson Peltz, the activist investor, and predecessor Jack Welch, who sniped publicly at Immelt’s leadership, all come in for criticism. Working with writer Amy Wallace, who also rode shotgun on Ed Catmull’s candid account of the evolution of Pixar, Creativity, Inc., Immelt also offers some frank admissions of error.
GE employees, ex-employees and investors will inevitably pick the history that best suits their narrative. But for the uncommitted, despite the excess of corporate detail and Immelt’s understandable defensiveness, Hot Seat offers much that is useful to other executives: about succession (interestingly Immelt admits that the fabled GE leadership machine did not generate a wide enough pool of internal candidates); about coping with crises; and about how to leave.
Immelt’s strong attachment to GE gives the story an affecting personal touch. His father worked there and he has a GE roundel tattooed on his left hip. In particular, his account of the final months when he was losing the confidence of the board he headed gives an illuminating insight into the twilight of a longstanding leader’s reign, when he felt, in his own words, “listless, angry, and hurt”. Plenty of chief executives who have been shown the exit before they thought their work was done will sympathise with that.