Why would Jeff Immelt write a book about his troubled tenure as GE’s CEO from 2001 to 2017? “My tenure had ended badly,” he acknowledges on page 1 of Hot Seat. “My legacy was, at best, controversial.”
Less than a week into Immelt’s tenure, replacing the famous Jack Welch, 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. Immelt would lead GE through many more dire moments, from the 2008–09 Global Financial Crisis to the 2011 meltdown of Fukushima’s GE-designed nuclear reactors. He set out to make GE more global, more rooted in technology, and more diverse. But GE struggled. “It became clear right away that my main role would be Person to Blame,” he says.
In Hot Seat, Immelt offers a candid interrogation of his tenure. 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.
Immelt rose through the ranks during a largely “tranquil” time when China was a sleeping giant and the U.S. economy expanded at a reliably impressive rate. The world he inherited as CEO, however, was “raucous, volatile and unpredictable,” full of bursting bubbles (dot-com, housing, power), disruptive rivals and increased scrutiny.
Hot Seat provides interesting OM insights and is worth the read. Here is one quote: “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 to Louisville to 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, which 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.”
Many critics would say Immelt’s entire tenure was a disaster as well.
