I Read It So You Don’t Have To is a new series that gives you the TL;DR on a new business book you want to read — but don’t have time to.
What did I read?
Jeff Immelt’s new memoir, Hot Seat: What I Learned Leading a Great American Company, published last month.
So who’s Jeff Immelt?
Immelt, once considered a human embodiment of corporate innovation, was the ninth CEO and chairman of General Electric, the American conglomerate better known as GE, from 2001 to 2017. Having served as a manager in GE’s plastics, appliances, and health care divisions through the ’80s and ’90s, he eventually won a succession battle to take over the reins from Jack Welch, GE’s legendary CEO for two decades. Immelt describes himself in the book as “not a genius and not lucky.”
Give me the 30-second sell.
After being subject to endless criticism in the wake of stepping down in 2017, Immelt tries to set the record straight. While his predecessor, Welch, acquired a larger-than-life reputation for turning GE into a titan of American industry (though some have challenged whether that reputation is deserved), Immelt’s tenure has been viewed by most as a disaster, turning GE from a behemoth into a shell of its former self (GE’s share price has plunged from nearly $60 in 2001 to around $12 today).
Immelt doesn’t challenge anyone’s perception of that reality but asks readers to consider the extraordinarily challenging circumstances he led the company through, beginning with 9/11, which occurred just a week into his tenure and hit GE’s aviation business. After that came the Enron scandal, prompting skepticism by investors and the business press of large company financials, then, of course, the 2008 financial crisis to which GE was heavily exposed. The suffering doesn’t end there, explains Immelt — there was the 2011 Fukushima nuclear disaster that involved GE reactors and, finally, his premature exit from the company marred by political infighting and pressure from activist investors.
The embattled executive strives to portray how hard he tried to make GE a more innovative, sustainable, and diverse company and adopt a leadership style that contrasted with Welch’s bombastic cult of personality. He also lays a fair share of blame for GE’s fate on Welch’s shoulders for saddling the conglomerate with problems he was left to sort out and his successor, John Flannery, who (in Immelt’s eyes) spent his short-lived tenure being indecisive and undoing much of the work Immelt had done to put GE on a path to becoming a more competitive and forward-thinking company.
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What will I learn, in a nutshell?
While there was a time when a giant conglomerate like GE was favored by investors, perhaps it’s a good thing that they’ve fallen out of favor. Immelt argues that GE’s sprawl across industries as varied as energy, aviation, and health care helped the company survive when one of those industries was facing a downturn, but the actual trajectory of the company seems to argue the opposite.
GE Capital, in particular, was simultaneously one of the conglomerate’s most lucrative businesses as well as the biggest drag on its overall health. According to Immelt, his 16-year tenure was a constant struggle to shrink down GE Capital, known internally as “The Blob” for being unwieldy and impenetrable, while bulking up other parts of the business so its industrial arm wouldn’t be overshadowed by the financial one.
Despite GE’s already sprawling size, making acquisitions seemed to be one of the main ways the company knew how to grow. It was a strategy that could be calamitous when it went poorly, as it did with GE’s misguided $10 billion acquisition of French energy company Alstom, which happened under Immelt’s watch but which he blames on a subordinate who was angling for the CEO job. For emerging Big Tech conglomerates like Amazon and Alphabet, it’s a cautionary tale about the dangers of size.
The book is also a lesson in how hard it can be to drag a long-established leviathan like GE into the future. Immelt’s efforts to create a GE Digital division with a cross-functional IoT software platform met with a lot of internal resistance and was ultimately unwound by his successor. At one point, software entrepreneur Tom Siebel told Immelt, “You will never be able to do this inside a big company. Your company won’t let you.” Immelt admits to the reader: “I couldn’t yet see how right he was.”
Any particularly juicy bits?
A fun nugget of trivia: Before GE, Immelt worked at Procter & Gamble, where he was cubicle mates with future Microsoft CEO Steve Ballmer.
On the more damning end of the spectrum, remember that NBCUniversal was part of the GE family for a portion of Immelt’s tenure. Immelt was involved with recruiting a certain Donald J. Trump to host The Apprentice, which involved a round of golf during which Trump hit a hole-in-one (an anecdote Immelt says Trump has asked him to repeat in public multiple times). NBC Universal CEO Jeff Zucker had been the one to approach Trump, but Trump wanted attention from the top dog at GE. “I’m not going to fuck around with Zucker,” he told Immelt. “Only you.”
When it comes to his predecessor, Immelt seems pretty ambivalent about Welch, acknowledging that while he’d done great things, the company he left for Immelt was “a bag of shit.” Okay, maybe not that ambivalent.
After Immelt’s retirement, GE faced an SEC probe for questionable accounting practices during his tenure, which the company finally settled for $200 million without admitting fault. Immelt doesn’t directly address these allegations in the book but deflects blame for any improprieties. He says that while his critics like the Wall Street Journal allege that “I created an atmosphere of so-called success theater and turned a deaf ear to anything negative[,] this is simply untrue. I’d intentionally surrounded myself with top executives who insisted I hear when we were off course or when we couldn’t achieve certain goals.” You be the judge.
If I ran into you at a cocktail party, which parts of the book would you entertain me with?
Saturday Night Live’s Lorne Michaels had to convince Immelt to keep the faith with a new NBC comedy about a sketch comedy TV show. It was called 30 Rock, and in its early days had dismal ratings. Immelt let it run, and the show proceeded to relentlessly mock its parent company — with one of its main characters, Alec Baldwin’s Jack Donaghy, being a walking parody of a GE executive and an entire greenwashing mascot plotline not so subtly poking fun of GE’s “Ecomagination” sustainability initiative. Immelt took it all in good humor but remains proud of his efforts to make GE more environmentally friendly.
Immelt drew a lot of flak after his retirement when it came to light that during his CEO tenure, he would have a second, empty plane follow him on all his trips overseas. He explains that “the reason for the practice was to ensure I never got stranded in a remote location or missed an important meeting. In retrospect, I see that the chase planes made GE look terrible and made me look not just self-indulgent but imperial.” The true gift of hindsight.
Should I take the plunge and read the whole thing?
There’s a long tradition of self-mythologizing memoirs by entrepreneurs and CEOs trumpeting their own success and unique leadership insights — a genre perfected by none other than GE’s own Welch. So it’s intriguing to read an addition to the shelf from someone like Immelt, whose tenure is viewed as a failure and who admits as much. Still, Immelt can’t seem to resist the tropes of the genre, offering leadership platitudes on a frequent basis. (His chapters are titled “Leaders Show Up,” “Leaders Learn Every Day,” “Leaders Persevere in a Crisis,” and so on.)
If you’re really interested in an account of how GE lost its stature from the perspective of the person who oversaw its fall from grace, you may find Hot Seat to be worth your time. However, I’d suggest reading it alongside Wall Street Journal reporters Thomas Gryta and Ted Mann’s 2020 book Lights Out, parts of which bolster Immelt’s claims about Welch and Flannery’s roles in GE’s downfall but also treats Immelt less charitably than he does himself.
Next up: I’ll read Honor Thy Label by Gero Leson, a VP of special operations at Dr. Bronner’s, about how the cult soap brand works to build sustainability into its supply chain.