FORMER GE CEO JEFF IMMELT RELEASES 'HOT SEAT: WHAT I LEARNED LEADING A GREAT AMERICAN COMPANY'
The Memoir Offers an Inside Look at General Electric in the 21st Century and Shares Immelt's Hard-Won Lessons.
Highlighting a Tenure Marked by Global Crises and Rapid Globalization, HOT SEAT is an Important Read for CEOs Leading in Unprecedented Times.
In his new book, HOT SEAT: What I Learned Leading a Great American Company (HOT SEAT), Jeff Immelt, the former CEO of General Electric ("GE") shares the hard-won lessons he learned during his sixteen years at the helm of one of America's most iconic companies. Beginning with Immelt's first Monday on the job—the day before September 11th, 2001--HOT SEAT offers a rigorous and candid self-interrogation of Immelt's tenure, detailing for the first time, his proudest moments, missteps, and the lessons he learned battling one crisis after another as he led GE into the 21st century.
Marked by straight talk and humility, HOT SEAT is not a typical business book. As Immelt writes in the prologue:
"In October 2017, as I stepped down after thirty-five years at General Electric, I wasn't sure I could write this book. My sixteen years as CEO had given me a front-row seat to history, and I'd learned some tough lessons I believed others could benefit from. But my tenure ended badly. 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.
My legacy was, at best, controversial. GE won in the marketplace but not in the stock market. I made thousands of decisions impacting millions of people, often in the midst of blinding uncertainty and second-guessed by countless critics. I was proud of my team and what we'd accomplished, but as CEO, I'd been about as brilliant as I was lucky, by which I mean: too often I was neither."
As the business world continues to be rocked by stunning economic upheaval and a global pandemic, the likes of which have not been seen in 100 years, HOT SEAT is an urgently needed, and unusually candid, guide for decisive leadership.
Lessons for Leaders
HOT SEAT is a gripping story of American and global business over the past 20 years. It provides leaders with lessons and perspectives on how to handle crises and is a must-read playbook on how to lead with integrity in the face of uncertainty.
"No one hands CEOs a playbook on your first day, you simply must figure it out," Immelt said. "That takes a lot of love and respect for your people as well as perseverance in the face of second-guessing and withering criticism. I wanted HOT SEAT to capture the peaks and valleys of what it is like to be CEO, with the hope that my story can help readers—and leaders—in one of the most turbulent times in recent history."
He further explains in the book:
"When trouble erupts on a global scale and disruption is constant, leaders often lack control. In situations like this, all you have is your willingness to make decisions and to persevere. The goal is survival, by which I mean progress, not perfection. Here's the bottom line: leaders' biggest decisions are always scrutinized, and mine were no exception. I only wish you could stand in my shoes and see what I saw in crucial moments—there were probably ten thousand of them—when my team had to act. I'd be curious to see what you'd do."
Immelt adds that good leaders absorb fear in the face of uncertainty and hold "two truths" in a crisis, preparing for the worst while making investments for growth. They also remain steadfast in their desire to drive change, while fixing their own mistakes when they get it wrong. And, in good times and bad, leaders must be transparent, accountable, and supportive of their team.
Taking over at GE from the legendary Jack Welch, Immelt was arguably one of the first American CEOs to deal with the effects of rapid technical innovation. To capture the era, Immelt's co-author (Amy Wallace) interviewed more than 70 colleagues and members of the GE ecosystem. As such, HOT SEAT is a review of events from those who lived it.
"We all worked hard to help GE win in turbulent times," Immelt said. "Some initiatives worked—and some didn't—but, importantly, leaders can learn from both. In business, as in life, truth equals facts plus context. By sharing the good and the bad, HOT SEAT adds to the context of the era."
HOT SEAT is a refreshing alternative to leadership books that provide checklists or management dictums. It delivers raw and honest reflections from the leader of one of the world's largest and most important enterprises during unprecedented times.
Please visit https://www.simonandschuster.com/books/Hot-Seat/Jeff-Immelt/9781982114718 for more information on HOT SEAT.
Jeff Immelt was the ninth Chairman of GE and served as CEO for sixteen years. He has been named one of the "World's Best CEOs" three times by Barron's. During his tenure as CEO, GE was named "America's Most Admired Company" by Fortune and one of "The World's Most Respected Companies" in polls by Barron's and the Financial Times. Immelt has received fifteen honorary degrees and numerous awards for business leadership and chaired the President's Council on Jobs and Competitiveness under the Obama administration. He is a member of The American Academy of Arts & Sciences, and a lecturer at Stanford University. Immelt earned a BA in applied mathematics from Dartmouth College and an MBA from Harvard University. He and his wife have one daughter.
Excerpts from Jeff Immelt'sHOT SEAT
"Tuesday morning, September 11, I awakened just after 5 a.m. so I could hit the gym before paying a visit to one of GE's best customers, Boeing. When I turned on the TV above my stair-climber machine, however, every channel was broadcasting images of a fire burning on the 110-story north tower of the World Trade Center. The first reports I heard speculated that a small private aircraft had mistakenly veered off course. But as I kept stepping—right, left, right, left—a second plane hit the south tower, and this one was anything but small. Thanks in part to my dad's tutelage at Lunken Field, I knew how to recognize a Boeing 767. Something was horribly wrong.
I left the gym and hurried to my room. I knew my wife, Andy, and my fourteen-year-old daughter, Sarah, were in New Canaan, Connecticut, where we'd just moved from Milwaukee. Assured my family was safe, I flipped on the TV and made my first call, to GE's chief financial officer, Keith Sherin. He was watching the news too, and at first we didn't say much as the unfathomable images sunk in. Would anyone above the damaged floors escape, Sherin and I wondered, and if so, how? Meanwhile, both of us knew that GE held all the reinsurance on 7 World Trade Center, a forty-one-story building right next to the twin towers. We had insured the insurance company that held that policy.
At 6:59 a.m. Seattle time, the south tower collapsed. I couldn't believe what I was seeing. Twenty-nine minutes later, the north tower fell, and 7 World Trade Center would soon crumble as well, leveled by the incredible force with which the twin towers had crashed down. Soot and an eerie white ash engulfed all of Lower Manhattan.
Sometime during this period I called up G.G. Michelson, the pioneering R. H. Macy executive who was then on GE's board of directors, for a reality check. Michelson was a rock. She'd broken through many a glass ceiling, attending Columbia Law School when few women did, negotiating with Teamsters and other union leaders on behalf of the Macy's department store chain, often serving as the only woman on corporate boards that clamored for her time. She'd had a rough upbringing—she spent some time in orphanages while her mother, who would die when she was eleven, battled tuberculosis. I sensed that, as somebody who'd weathered the worst storms, she'd give solid advice. When I told her how I was analyzing GE's priorities, she was encouraging. 'You're doing great,' she said. 'Trust your instincts.' I was so grateful I admitted something I hadn't planned to reveal: 'Look,' I told her. 'I feel like I want to vomit all the time.'"
On "The Arrogance of False Piety"
"The best leaders absorb fear. 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. In the wake of 9/11, GE's people needed to hear, and to believe, that we had a plan and that, working together, they could help us execute it…
True leaders are frank, but they don't traffic in panic. The best leaders acknowledge mistakes, but they don't tear their colleagues down just to ease their own discomfort. Transparency is an admirable goal. But the real goal is to solve problems. When leaders merely unload their burdens without offering a plan of action, that's selfishness masquerading as candor—the arrogance of false piety."
On "Owning Your Decisions"
"It may sound weird to say it, but I am certain that I would never have become GE's CEO if I hadn't first learned to fix refrigerators. In 1989, however, when GE moved me, Andy, and our daughter to Louisville, Kentucky, so I could become head of customer service for GE Appliances, I wasn't so sure it was a promotion.
GE's refrigerators had begun failing at an alarming rate. The problem, we soon figured out, was faulty compressors. Compressors, which push refrigerant vapor into a unit's outer coils, have to work harder when the weather gets hot. So the hotter it got, the more our compressors failed. First, we heard from customers in Puerto Rico. Then Florida. After a little investigation, we determined that every single compressor inside 3.3 million refrigerators was going to fail, one by one, in a wave that would roll across the country from the warmest spots to the coolest. We figured refrigerators in Maine would be the last to give out, but their time would come. Each repair would cost us $210—more than half what customers had paid in the first place. It was a disaster.
In all, I oversaw seven thousand employees in multiple disciplines. To do that well, I couldn't just rely on my sales skills. My office was in what was called Building 6—a cavernous, empty factory in Appliance Park where we'd made air conditioners until Jack moved that division to Asia. I used this shelled-out space to host town hall meetings, where I leveled with people about the direness of the situation. But I learned to stay focused on the parts of the problem that my workers could control, such as the time it took to make a repair. The standard was 106 minutes. We launched sessions where we shared best practices, so people could learn from one another. Then we had contests, with prizes for those who fixed units faster. This way people could win, even as we were fixing a mess.
It was the largest product recall in the history of GE, and I was right in the middle of it. But I will always be grateful I did that job, because it was so unrelentingly impossible. Once you've pushed through a problem that at first seemed unfixable, the obstacles that come afterward don't hit you quite as hard.
In big companies, hundreds of people can be involved in decisions. When the decision works, thousands take credit. When decisions fail or face challenges, most grumble, 'I told them not to do that.' This idea is as true in the boardroom as it is on the assembly line. What was impressive—and instructive—about the compressor crisis was that Jack owned his decisions. He was solid in the face of second-guessers, and he was willing to sacrifice short-term profits to protect consumers. I learned an important lesson that I would later try to model for my people."
On Crisis Management
"On the morning of September 25, (GE Chief Financial Officer Keith) Sherin and I did an investor update. 'Are you going to do an equity raise?' someone asked. I believed that we were in good shape. We had a lot of cash. Our commercial paper was trading. So I answered: 'We don't think so. We feel very secure.' But our institutional investors weren't reassured. That night, Cassidy forwarded me an email from one of them at 8:51 p.m. 'What you guys announced has not put out the fire,' it said. 'Our bondholders are freaking out.'
The next day—Friday, September 26—Washington Mutual, which had been placed into receivership the previous day, filed for bankruptcy, and Morgan Stanley looked like it might have to do the same. To me, this was the most catastrophic day—the one that made clear how huge a crisis we were in. After WaMu's bankruptcy filing, there was a $5 billion run on Wachovia Bank, whose shares dropped 27 percent. This was terrible news for us. Entities that owned GE's debt tended to buy insurance in the form of credit default swaps. Now our credit default swaps were blowing out—when the owners of our CP tried to buy insurance, it was either unavailable or very expensive.
That's when Goldman Sachs called Sherin. They wanted to meet that night, they said, to urge us to consider doing something that, less than twenty-four hours earlier, I'd said we wouldn't do: a public offering.
I'll never forget the look on Sherin's face when he came into my office around 5 p.m. to tell me what the folks at Goldman had just said: that we needed to raise equity. I pushed back, but Sherin was insistent, and I had to listen to him. Sherin had a 'true voice,' by which I mean he always put the company first, without regard to his own ego. If he was concerned, I knew I needed to be, too. A few hours later, we met with the Goldman team and sketched out a plan.
On Saturday morning, I headed to the office and got the members of the GE board on a conference call. As best I could, I summarized how treacherous and unknowable the environment had suddenly become for GE. We needed to raise at least $15 billion, I told the board, and we needed to start right away. There was dead silence on the other end of the phone that felt like it would never end. Finally, Roger Penske—the auto racing magnate who was always one of my favorite GE board members—spoke. 'Let's go get the money,' he said and the rest of the board quickly agreed. How audacious was the task we were about to undertake? Here's some context: Just a few months before, in March 2008, Visa had staged the largest stock offering in history, raising $18 billion But they'd spent months preparing for that equity raise. We didn't have months. We had days."
On Globalization and China
"Globalizing a U.S.-based company is hard. It is easier to let leaders back at headquarters make excuses for why deals in emerging markets can't get done. True globalization requires a transfer of power from headquarters to the field. It requires placing trust in people you can't see up close, in person. In the age of COVID, when going into work at headquarters is unsafe, companies realize the need to empower those closest to the action. Doing so requires cultural change, and today it is an ongoing trend. But back when we were tackling globalization at GE, headquarters still ruled.
I always kept focused on the power of the Chinese market and the reach of the Chinese government. Let's face it: in some markets, China has replaced the United States on the economic development front. In the Middle East, Africa and Latin America, Chinese construction companies built power projects with GE products and Chinese financing. That is the nature of globalization. But when you are 'In China for China,' as GE was during my tenure, you can succeed and work around trade wars.
The COVID-19 crisis has shone a harsh light on China. Even those of us who have long touted the potential of the China market and local partnerships are disappointed by the country's initial coverup of the virus. Add to that the growing trade pressures and it is easy to envision a period of geopolitical volatility marked by anti-China sentiment.
I understand this sentiment, which exists at the grassroots level in America. And the voices of business leaders who could encourage a more constructive dialogue has gone silent. But does anyone think that a trade war between the world's two biggest economies is a good idea? Beyond that, I fear the next generation of American business leaders will be afraid of China, or that they won't believe that it's their job to learn how to compete there. That is a mistake. Particularly when the United States and China are the only two countries that matter when it comes to solving the world's toughest problems.
China has transitioned from merely being a manufacturing powerhouse to commanding respect as an important intellectual hub. Today, 'Made in China' no longer means cheaply produced goods. Instead, in industry after industry, it means: China has decided to stake out a position, and the world will likely follow. The only reason there is a solar industry, for example, is because the Chinese decided it would be so and set about making the solar panels and selling them below cost. I suspect they will outpace the United States in electric-vehicle deployment as well.
In a world of growing competition, we will never be protected from China. Every year for the past twenty-five years, China has graduated more engineers than the US and Europe combined. Moreover, on an increasing number of issues, China is 'the decider.' If climate change is your focus, look to China: they are leading not only in solar but in the next generation of batteries, nuclear power plants, and electric vehicles as well. China will be on par with the United States on next-generation AI and digital tools. Recently, when Boeing faltered, China was the first country to ground the 737 MAX narrow-body jet. Where China goes, increasingly goes the world."
On GE Capital
"GE Capital had survived the financial crisis, and for that we were grateful. While I'd hoped we could continue to shrink GE Capital gradually, now it was clear we needed to do it quickly. Instead of throwing off cash, GE Capital now required infusions of it. That not only drove our stock price down; it would change the company forever.
If you'd asked me in 2013, I would have said GE's regulators were overly worried about rainy days. What the regulators wanted was for us to run GE Capital like pessimists. The Fed always believed that GE people were too optimistic. I remember one of our earliest meetings with Caroline Frawley, the Fed regulator who'd been assigned to GE. She gave a withering presentation to the board, listing GE's flaws one after another, and I wigged out, ticking off all the pressures GE was facing. 'You're just trashing us for no reason,' I huffed at her. But moments after she exited the room, GE board member Geoff Beattie gave me what for. 'You are out of line because GE Capital is out of line,' he said. 'This is not going to work the way you seem to think it will. We need to work with Frawley, not against her.'
I was chastened, and I shaped up. Because while GE Capital's people knew their businesses well, there was no denying that we were not so good at assessing all the other kinds of risks that existed outside GE—those that were tied to being big and complicated. We weren't organized in a way that asked macro questions. When you have $400 billion in assets, you need to think about more than whether or not your debtors are going to pay you back. You need to assess what the Fed calls 'enterprise risk'—to ask what-if questions about how your company's complexity might leave it open to harm. Now, with regulators involved, and with our cost of funds shooting dramatically up, I knew we had to pivot.
If you'd had asked me then, I would have told you that I felt all too mortal. We'd been lauded for our 'bold decision' to exit financial services, but I never felt good about it. While we got out of GE Capital whole, I feared we'd left money on the table that we could have captured had we had the option of waiting. But we didn't. Restructuring was the right decision for GE. But I saw it for what it was: capitulation. The hardest decisions are the ones that don't maximize upside, but merely avoid a greater loss. I accept that learning how to retreat is a leadership skill. I just wish I hadn't been required to learn it.
In April 2015, we'd said we were going to complete the sell-off within three years. We essentially finished it in two years—more than one hundred transactions in sixty-two countries—and we came in, as predicted, at 1.1 book value, maybe a little bit higher. On June 29, 2016, just fourteen months after we'd announced the unwinding of GE Capital, GE became the first big financial institution to shed the SIFI label. We had accomplished what many said was impossible. We could focus again on running the company."
On How It Ended
"When I got (GE Board of Trustees Lead Director) Jack Brennan on the phone, he said the board wanted to choose my successor as soon as possible, at their next meeting, just two weeks away.
I was the only passenger on my flight home from Houston to Boston, alone but for the crew. Usually I would have embraced such solitude as a chance to get more work done, but not on this night, I felt listless, angry, and hurt. Some have asked me whether I was simply burned-out. There's no question that I was, but at the same time, I just wasn't done being CEO. It wasn't that I felt I was owed more time. I hated the idea of being the guy who hung on too long. But I hadn't gotten the company where I wanted it to be."
"For anyone who's endured failure or heartbreak in their professional life—and that means everyone—Jeff's tale, full of insight, wisdom, perseverance and heart, is an invaluable resource and a blueprint for dealing with the wonderful chaos of leadership."
Jennifer Aaker, Stanford Graduate School of Business, General Atlantic Professor and Coulter Family Fellow
"Jeff Immelt's HOT SEAT is the ultimate and intimate insider's account of sixteen epic years as CEO of GE. With remarkable candor and self-awareness, Jeff tells hundreds of riveting stories—sharing hard-learned lessons in leadership. HOT SEAT is the brilliant, fast-paced, tough love story of Jeff's personal devotion to his family and GE's people. He literally bleeds for GE (spoiler alert: tattoos revealed). If you work in tech, finance, energy, or health care, this book is required reading. If you care about world affairs, global progress, or public service, it is inspiring. HOT SEAT is a great gift from Jeff, a personal hero and patriotic, magnificent servant leader."
John Doerr, Chairman, Kleiner Perkins and author of Measure What Matters
"An extraordinary combination of insights and candor, Jeff Immelt's HOT SEAT takes you into the office, head and heart of the man who became CEO of GE on the eve of 9/11, and then led the behemoth for sixteen fascinating, and often turbulent, years. A handbook on leadership—and life."
Stan McChrystal, General, US Army (Retired); CEO & Founder of McChrystal Group
"Jeff pulls back the curtain on his many battle scars, talks about lessons learned and gives us insight into the importance of optimism, growth and, most important, humility."
Ruth Porat, SVP and Chief Financial Officer, Alphabet and Google
"Jeff Immelt has always been one of my leadership role models. He leads with head and heart. He is an 'all-in' leader who is completely committed to his team and his customers, and he cares deeply about both. This book shows how leadership is a full contact sport and Jeff leaves everything on the field."
John Donahoe, CEO, Nike
"Jeff Immelt's disarmingly candid retrospective of his tenure as the CEO of GE dissects his successes and failures, providing insider perspective on the rationale for his most controversial decisions. He explores the emotional and intellectual challenges of the loneliest, most challenging position in any organization. There are many lessons to be gleaned from this narrative. HOT SEAT is an insightful perspective for aspiring, current and future leaders."
Toby Cosgrove, executive advisor and former CEO, Cleveland Clinic
"The metric that matters in a business leadership book is how many pages you underline things on because you know you want to remember and refer back to them. Hot Seat scored 192 for me. If you're looking for a 'How great was I?' memoir, move to the next book. If you want the real lessons of leading one of the world's most complex companies through sixteen of the world's most challenging and least predictable years, take a seat and turn to page one."
Andrew Robertson, President and CEO, BBDO Worldwide