Jeffrey R. Immelt glided into his new job as chairman of General Electric Co. (GE) on Sept. 10. A day later, terrorists destroyed the World Trade Center -- striking a blow to several of his businesses with it. Since then, the man who succeeded Jack Welch in one of the best orchestrated successions in history has faced one crisis after another. He recently spoke with BusinessWeek Associate Editor Diane Brady about the challenges ahead (for a January, 2002, video interview of Immelt by BW Editor-in-Chief Steve Shepard, see this BW Online "Captains of Industry" segment). Here are edited excerptsof their conversation:
Q: What do you think you've actually learned in the past seven months?
A: When you take a job like this, there's almost an infinite amount to do. One of the things you have to learn is how you want to spend your time, where you want to spend your time. No matter how long you practice for that, that's something you don't get into until you're in the seat. I've become better at time allocation, and I've learned much more about the people-by testing the leaders and getting to know them in more depth. Once Jack walks out the door, they're all my team. I knew the businesses before. I needed to know more of the people.
Q: Tell me about time allocation. How do you spend your days?
A: I've traveled a lot more than I'd anticipated. I'm out of the office 60% or 70% of the time. I'm spending an incredible amount of time on communications sessions. Your own people matter. Any time you're in a recession, you spend more time communicating. That's what good people do.
You add recession, plus 9/11, plus financial market swirl. That's like having three recessions at once. Then add the fact that you have a new leadership team, and you've got a new message. So you have to spend a lot of time out communicating -- with investors, your own people, and with the outside world. Crotonville, Webcasts, lots of touch time with investors.
Q: What has been sacrificed because of that?
A: When you take over a company like GE, you think you're going to visit 100 businesses. You're going to go see the factories you haven't seen before. You're going to see a site in Texas and one in Canada and stuff like that. That has fallen by the wayside. What I've kept is the global travel, and I've kept the customer visits, and probably doubled the amount of investor/analyst communication.
Q: Jack once said something like, "The higher the monkey climbs, the more people look at its ass." Do you find the degree of public scrutiny disconcerting?
A: If you had said, when I took the job, what's the furthest thing from your mind? It would be September 11. What's the furthest thing from your mind after that? That the eighth-biggest company in the world [Enron] is going to go bankrupt. So I've had plenty of surprises environmentally. The job itself is great. I love the job. It's fun. It's challenging. It's all the things I thought it would be.
Q: What's the biggest perk of the job?
A: Probably talking to you. No. The biggest perk is probably how fun it is. You get to touch so many different things. You get to work with so many great people. That's a blast.
"When I get knocked, I don't go home and suck my thumb"
Q: It might sound odd to characterize the past seven months as a blast, given everything that has been thrown at you.
A: It has been even better. It's just a challenge. When I get knocked by one of these guys, I don't go home and suck my thumb. This is not just a job. It's not just a company. This is a passion. It's my life. I don't suck my thumb. I say, look, we're going to be better. We're going to show them that they're wrong.
Q: Did you personally try to contact Bill Gross, the bond-fund manager who accused GE of being an old-style conglomerate that can only buy its way to growth?
A: No, because it wouldn't serve any purpose. He didn't write his article to talk to me. Something written like that isn't an attack on me. 300,000 people in this company read that article. Those 300,000 people know he's wrong. The one thing that people don't get about GE is that, to the people who work here, it's not a company. It's not just a job. You feel like you're part of a 120-year-old ever-growing, ever-improving family.
Q: It must hurt to have people criticize your family.
A: I hate it. But it's not a personal thing. I get up the next day and say, "These guys don't get it. I know what we are."
Q: Has that had any impact on employee morale?
A: Morale is not being impacted. Are people concerned about the economy? Sure they are. Were they concerned after 9/11? Of course. When our people read about Enron, do they worry about GE? No. They know how their 401(k) works. They know about our finances. They know about the integrity of the economy.
You watch business TV today, and it's tough. The news is bad. You've got a constant stream of pieces about integrity and bookkeeping and stuff. It's not an environment that makes you feel good. My job is to let all our people know that we're different, that this is the best company in the world, that we have the financial resources to look at the future, and that this company is going to grow.
Q: Have there been any moments of extreme stress?
A: I'd be lying if I didn't say I felt stress. But it's never about this company. It's about wanting the world to see and to touch and to feel how different we are. It's the need to find ways to tell how different we are.
"I'm a complete and utter zealot for this company"
Q: Have you had to become more oblivous to the criticism?
A: You didn't work for Jack if you didn't have a thick skin. Having worked for him, I'm used to dealing with the way things are. I know you've got to have a thick skin. You've got to be determined. What makes me tick is the fact that I'm a complete and utter zealot for this company. I am a total believer in the culture, the people. That gives you a lot of confidence.
Q: How do people tell when you're angry? Do you ever blow your top?
A: Totally. People get removed. People know when there's consequence. The voice and the action is different. You go through business reviews in a recession. We've made a lot of tough calls.
Q: On the day the Twin Towers fell, you were stranded in Seattle. How did you manage the crisis from there?
A: You go through a hierarchy of issues. You want to know what you can do to help and whether your employees are safe. Once you've acted on that, I looked at what effect this would have on the company. A lot of the things that would be hit were in the airline industry and finance industry. Then we did what we could do to help. We got as many portable generators to Ground Zero as possible. We donated money.
Q: Did you feel you'd had a fair bit of experience in crisis management before this?
A: Sure. September 11 was horrific, but I've been through enough crises before that I had my own pattern as to how to collect facts, what a leader should do, how to communicate with people, how to set up operating mechanisms to work our way through it. It was an unthinkable tragedy but you can respond to it with some of the same strategies you've always had as a leader.
Q: What's rule No. 1 to you?
A: Be visible.
Q: Which is hard to do from a Seattle hotel room.
A: The first day was just the beginning. We sent out the first all-employee e-mail that day. We sent out the second one on Friday. I had an office where I could work. The leader has to be the one who decides the facts so you're in a mode where you're getting smarter every 24 hours. We still have monthly airline calls that I participate in to see how the airlines are doing. You think of everything in the context of a 120-year-old company. How do we give people confidence? What role should we play? Things like that.
Q: Did you have any soul-searching over whether to have an analysts' meeting 10 days after September 11?
A: Sure. We had pretty good data internally, so we knew how our businesses would be affected. We had good financial controllership, so we knew where we stood. I felt it was important for us to get out and make our statement. We already had one scheduled for the Wednesday afterwards, so it was natural to try to keep with that meeting. We delayed it by two days.
"I viewed [Enron] as being the biggest issue by far"
Q: Enron. Your first thought was probably your financial exposure, which was minimal.
A: When did it occur to you that there might be a ripple effect on GE?
I said at our kickoff meeting in January that, of all the events that happened in 2000 and 2001, I thought Enron would have the biggest impact. You just had to look at the depths of it -- what it stood for, what it meant, what people would be thinking. We were preparing our company to be open.
I'm not worried about disclosure. I'm not worried about us being like them. There's no chance of that in this place. But any of us could see it would have a fairly big impact on the whole economy and the way companies are run. I viewed it as being the biggest issue by far, and it has only grown in proportion in the past four months.
Q: When did it prompt discussions about the idea that you should be putting more information out there.
A: I legitimately have to say that we've always felt we've done it. The week of Gross' article, we won six investor awards. Investors are customers, so you listen to what's on their minds. We have nothing fundamentally in the company to hide. If I think doing more is going to help our customers feel better, then we ought to do it. As we did analyst meetings last year, we started giving out charts. As we were putting together the annual report, we decided to put in more information. We've had more communication with our investors than ever before. It's just a growing emphasis.
Q: Where did most of the debate take place?
A: I think it was me and a couple of key people. But this was not a debate. This is a set of people who say, "This is not us. This is what we have. This is what we are. This is what we've always done." It's not like we're wringing our hands saying, "Someone is going to catch us." It's a discussion that we have [Chief Financial Officer] Keith Sherin and I, and the vice-chairmen. The board and the audit committee are very useful. But when the board and the management trust each other, these are discussions about what how best to say it, not whether to say it.
Q: You told some customers that Jack's schtick wouldn't work in this environment. What did you mean by that?
A: The times are such that you have to talk about your company in a different way. If Jack were here at the same time, he would be talking about doing different things. I think the environment inspires a lot. We have different styles, and we communicate different ways. But he was about doing what worked best in the times he was at. That's what I'm about.
Q: Tell me about the Gross situation. Did people just get to the office, roll their eyes and say, "Damn, another one?"
A: You know none of it is fundamental or new. The awful, negative stuff -- like the comparisons with Gulf & Western -- you don't respond to. We've got our company. We've got our plan. We don't want there to be any inkling of doubt about GE. We had a meeting in Crotonville, and it came online.
On criticism of GE: "It just makes us more determined to show people how great this company is"
Q: Were you angry?
A: Absolutely. Indignant! Indignant! I think that anybody has the right to say what they want to say. But that's not this company. That's not our performance, our values. The fact is, we had 120 [analysts and investors] in Crotonville that Monday, talking about what we were doing. We talked about controllership. We talked about acquisitions-how many we do and how we do them-the capital structure. PIMCO was invited. You were invited. It doesn't change where we're going, or how we get there. It just makes us more determined to show people how great this company is. Anytime somebody writes something extremely negative, we read it. But it doesn't change where we're going.
Q: You don't think it was irresponsible of him?
A: I'm just not going to go there.
Q: You know better than most that even an aside from you can move the markets.
A: Here's what I say: The day before the article was written, the stock was trading two bucks higher than it is today. People who buy the stock today are getting a great bargain.
Q: Your stock is now at a discount to the S&P. How do you feel about that?
A: Hate it. Hate it. But what do you do about it? You perform. That's who we are.
Q: Do you find that you measure your words more carefully since you came to the top job?
A: Not really. You think every day in this job. Whether you think about it when you're driving home at night or you do it subconsciously, you think about new and better ways to communicate. It's a constant evolution. It's a constant circumspection. I've never once wanted to be any different than who I am. I make the message better. I refine it.
But I'm not more namby-pamby, thinking, "Oh I better not say that." I think, "How do I make it more effective?" I'm a good enough public speaker that I can say, this works with this audience, and it didn't work with that audience. I was better at Stanford than I was at Wharton. Each time, you see what works, and you get better at it.
Q: Where does your self-confidence come from?
A: I think it comes from doing your best.
Q: Have you always had it?
A: I've had great parents who basically said, you can do anything you set your mind to. They always gave me positive reinforcement. Every day at GE, I had bosses -- including Jack -- who were always there to help me find the right answers. You see companies where everybody has a bad boss or two. A bad boss is there to trip you up, or find the wrong answer. Jack created at GE the spirit of finding the right answer, finding the right way. Not everybody could.
Q: Would he not chew up the people who couldn't deliver?
A: This is very much a stereotype. The very best people in GE leave because they get bored. They don't leave because it's too hard. I never had one day here where I thought it was too hard. The best people are attracted by the work-the spin, the fun, the buzz. They're not turned off by the thought that "Jeff might beat me up today" or "Jack might beat me up today." They hate it when it gets boring.
Q: Have there been any moments recently that have shaken your confidence?
A: No. Look, every day, I'm grading myself. I'm grading myself every minute.
Q: It sounds like you're always getting an A.
A: I'd be lying if I didn't say there were days when I went back and said, "I wish I'd done this. I should have done that. I handled this the wrong way." But it's always in the motivation of getting better. I've never once looked in the mirror and said, "Oh boy, can't do this one."
Q: Are most of your regrets focused on how you've managed people?
A: Managing people. Managing situations. It's not a job that's about perfection. It's a job that's about getting better.
Q: How has the board been helpful to you?
A: They're good at probing the businesses. They have been extremely helpful for advice. I've spoken to a lot of them, asking "What do you think about this? What's your reaction to that?" You've got a series of people who like the company and want to help. And they've been great at, every minute of every day, infusing me with confidence -- just infusing me with the idea, "You can do it. Go. Go. Go. Go with your gut. You can do it. You're the best." That's what you want a board to be. You value their judgment, and you value their support.
Q: You had one board meeting at the Olympics that went all day. It sounds like a grueling exercise.
A: I wanted it to be that long. You're in a world today where the board and the management team have to be committed 150%. The management team has to make sure the board knows everything. And the board has to want to know everything. They have to dig. If you get that, you get harmony. They don't want to run the company. They want management to do that. But they want to know everything that's going on.
Q: Have they been critical of you?
A: Not so far.
Q: Your highest praise for some colleagues is that they have GE in their soul. What do you mean by that?
A: It means they burn with the desire to see this company succeed and are selfless in making it happen. They don't do the job for free. These are guys who have a lot invested in it. People say, "Oh God, Jack is gone. What now?" You've got 10, 15, 20, 30 people throughout this company who think it's about us now. We think we can grow it. We think we can make it successful. These guys at the top run big companies, but they do it in a collaborative way. They keep their egos in check. And they're totally about GE.
"The toughest person in the world to fire is a secretary"
Q: Have you ever had to take your friends out?
A: Friendship is friendship. I say, "Look, I'm always going to be your friend." When it's about the numbers, when it's about business, it's not personal. It's much easier to take people out at the high levels than the low levels. It's 10 times easier. The toughest person in the world to fire is a secretary. Then it's a sales rep, and then it's a plant manager.
When you get up to the high levels of a company like this, they know what the stakes are. They know what's involved. You don't have to say, "You do that one more time, and I'm really going to be angry." You say, "Look, this is life in the big city." It doesn't mean they like it. Everybody hurts. Everybody hurts the same. I don't ever want to treat people disrespectfully. But when the stakes are this high, when so many people count on you getting it right, it's not that difficult.
Q: Is your team any different from what Jack's team would have been?
A: Everyone has to perform. No one can sit at the table unless they're able to perform. But ultimately the team will be customer-oriented. They'll be technology-savvy. They're all going to share the traits of where I want to take the company. Will the people in the future be different ones that Jack would have picked? Absolutely.
Q: You said you're a new generation. What are the hallmarks of that?
A: I think if you look at what's going to move the world, it's going to be more global, more technology, more outside-in thinking vs. inside-out thinking. I think that's what companies have to do.
Q: You're a modern guy. Does that mean you help with the chores at home?
A: I'm never at home.
Q: Has it been years since you did any housework?
A: Probably. The same thing is true of my wife. It has been years since she has done the housework as well.
Q: Who does the house hunting when you move?
A: Always my wife.
Q: Do you not swoop in at the last minute to at approve where you're going to live?
A: No. I have a great wife who's very able, very independent, determined, smart, and very capable of making those decisions better than I can.
"In Connecticut, you know, everybody's important. I'm just a regular schmo"
Q: She came from the GE environment as well. Does she share the passion for the company that you have?
A: Yeah! She has always known what it has meant to me. When you have a nice family and they know how important it is to you, then everybody gets involved. My daughter has grown up in GE, and she's always known where I've worked. She likes watching Friends more than seeing an aircraft engine being made -- certain parts they like better than others -- but she knows the company.
Q: How do you keep in touch with her?
A: I call her every night. What I like to do with her is go to sporting events -- do things like Knicks games or Saturday Night Live.
Q: How do they like having you in the spotlight?
A: I think it's all new to us. Everybody makes sacrifices when you do something like this. But I think we all together know what a great ride it is.
Q: So they enjoy seeing your face in the press all the time?
A: Not really. My daughter reads these articles. She'll read the New York Times or the Wall Street Journal, articles that compare GE to other companies. And she hates it. But she thinks it's bull too. She thinks it's nuts.
Q: Do you get recognized on the street now?
A: Not really. When you live in Connecticut, you know, everybody's important. I'm just a regular schmo.
Q: Jack Welch called you the night before a news story appeared on his affair. What was your reaction?
A: He's my friend. I think about him as a friend. His personal life is his personal life. I was surprised to get the phone call. His angle was primarily about the company. He said, "I want to give you a heads up because the company is going to be mentioned." We're friends. I don't want anything bad to happen to him.
Q: How do you measure your success on the job?
A: It's a very public job, but I've always thought that success on the job is based on how fast you learn and not what you know. I think each experience that goes by, you recognize it when you see it again. You grow from it. You learn from it. Something that I respect...the best CEOs I see are introspective. They learn every day. That's what I try to do.
Q: Do you consider yourself introspective?
A: Very much. Constantly. I'll think as I drive out of here tonight. I'll think about this interview. The whole universe. Every tree grew to the sky in the fourth quarter of 1999. It was cosmically as good as it could be. I think in some ways taking over the company then would have been tougher then than it is now.
Q: Given what you've faced recently, one could argue that replacing Jack was the easy part.
A: Inside the company, Jack is Jack. His legend will always be there. Because of what we've gone through, nobody is talking about what Jack would have done. Everybody is focused on the moment. It's us now. It's this team. Taking over as things are environmentally shifting in some ways makes it easier to go through a big public transition like this. You're going to have to change anyways. This just gives everything more momentum.
It's not something I would have wished for. Who would ever want September 11 to happen? Who would want an Enron? Who would want people to lose their pensions? Or nutty heroes to be made without the press probing them at all? But inside the company, we're focused on the future. The swirl will pass, and we'll still be here.