GE former chief: What it takes to lead a business
- 30 May, 2019 09:10
Leadership is not a magic act, it’s a grind, and it’s those who find ways to renew themselves, absorb the fear of their teams and digitise that are going to best succeed.
That’s the view of former General Electric chairman and CEO, Jeff Immelt, who spoke at this week’s World Business Forum in Sydney on leadership lessons he’s learnt over his 35-year career with the global giant, as well as the economic, geographic and technological forces he sees reshaping the way organisations compete.
During this presentation, Immelt outlined three key attributes to leadership. The first is to “inspire the change”.
“Good leaders pick a path - more than ever, you need to be decisive in navigating the work,” he said.
The second is being able to execute the work. “You need to be connected with the frontline and see how people do what they do and know what matters,” Immelt said.
The third, and arguably the most important, is the ability to “absorb fear”. “You need to be the one to act when others can’t,” he said. “There’s so much uncertainty in this world, this is very important.”
Achieving this means being willing to change your mind, adapt, listen and learn from others, Immelt continued. One of the ways he readjusted GE’s globalisation mentality to be more locally attuned was by empowering regional leaders and walking in their shoes.
“In order to change others, you have to change your mind,” he told attendees. “It took me number of years of negotiating deals, before I realised the spirit of globalisation had moved away. I had to learn new techniques to be successful.
“I also learnt to see the world from bottoms-up. Far away things often look risky; close up, every problem can be solved.”
Immelt spent 35 years with GE, running the organisation for 16 years. It’s a career he said exposed him to “every tailwind, event, cycle, the rise of China, 9/11, digitisation and massive change”. Today, Immelt is working as a venture partner at New Enterprise Associates.
“I wish I could say it’s calming down, but in the next five, 10 and 15 years, more change is coming,” Immelt said, highlighting technology disruption, the role of the US and China and wealth discrepancy as fuelling transformation.
According to Immelt, these forces also make systems thinking a vital part of the modern leadership approach. This is about “mastering conflicting traits”, he said, such as short as well as long-term thinking, leveraging scale and speed, being both competitive and empathetic, and horizonal and vertical.
“Leaders need to balance two conflicting things more or less at the same time,” he said. “Because none of us can get stuck in business models when the world continues to change.”
Immelt then raised three questions every leader should ask in their career. The first is: How fast can you learn?
“If you can find ways to renew yourself while you’re getting punched in the face, you can lead in this generation,” he said. “I had the opportunity to get smarter every day, some of which I took advantage of. If I had my time over, I’d ask more questions.”
The second question for Immelt is: How much can you take on behalf of others? “There are schools of thought around authenticity and transparency, but sometimes you have to absorb fear on behalf of others,” he said.
Immelt’s third question is: What will you give? “This is about what you will give to the broader business community, world and more, in terms of problems you solve and opportunities you create,” he said.
The impact of digital transformation
During his presentation, Immelt also addressed digital disruption at GE and how digital has become as a foundational layer of organisations today.
“Digital in last 25 years been creating statements of record around IT and operations technology - it has been about creating reports,” he claimed. “With the advent of blockchain, automation and artificial intelligence, it now becomes the product itself. It becomes the decision-making tool you have, and goes from a backroom function to the way you have to run your enterprise.
“In order to drive that change, you have to make it existential – it’s a matter of life or death. You need to make it clear, if we’re not good at analytics or additive manufacturing, we’ll give up our competitive frontier.”
With innovation coming at a faster pace than ever, Immelt recommended organisations choose 2-3 technologies to be really good at.
“You do have to bring in new talent, but those of us running old companies have to transition the legacy talent in organisations to be ready for the future too. At GE, we had to do both at the same time, and it’s hard to pick when you’re going too quickly or slowly,” he continued.
What was also vital in building digital capability at GE was ensuring everybody played. “We didn’t let some people say they’re in accounting, this transition doesn’t impact me and leave me out of it. Nor did we have a separate skunkworks and digital garage down the street,” Immelt explained.
“We tried to intersperse the people and funding and make the whole organisation move quickly. If anything, we moved too quickly and didn’t bring enough of the legacy people on quickly enough. That’s really hard to do.
“But digital is one of the easiest things to explain to a global organisation than almost anything else, as everyone is a user. They can see the outcomes.”
Paired with digitisation is the need for agility, something Immelt admitted is “always painful” to achieve.
“What I would say is being able to manage complexity is a massive strength. Being complicated is a horrible weakness,” Immelt said. “Being simple is strength. But simplistic thinking is a horrible thing. Manage complexity with simple principles, and you have the benefit of size without downsized of bureaucracy.”
What’s more, leaders can’t expect everything to go right all of the time, Immelt said. “Sometimes you’re just picking the option where you don’t die today – it’s not glory after glory,” he said.
“Another thing about decisions is what to do is frequently obvious. When to do it is where the judgment comes in. It’s gaining a nose for timing. And you have to segment your critics.”
A final piece of advice was to instil purpose, Immelt said. This often requires leaders to “demonstrate the will to win”.
“Too often we let the optimisers take over. I think people smell a lack of will,” he concluded. “With young millennial talent, I don’t think it’s big versus small, it’s whether you are in it to win, purposeful and dedicated. If so, they’ll work for you. If not, life is too short.”