WEBVTT - Jeff Immelt on Crisis Management and Leadership (Podcast) 0:00:02.040 --> 0:00:07.160 This is Mesters in Business with very Renaults on Bluebird Radio. 0:00:08.200 --> 0:00:11.400 This week on the podcast, I have an extra special guest. 0:00:12.000 --> 0:00:15.080 His name is Jeff Immelt and he is the former 0:00:15.520 --> 0:00:20.760 chief executive officer of General Electric, one of America's biggest 0:00:20.880 --> 0:00:25.560 and best known companies. I was really impressed not only 0:00:25.560 --> 0:00:29.840 with his book Hot Seat, but with our conversation. He's 0:00:30.000 --> 0:00:36.160 absolutely fourth right. He takes complete ownership of the errors 0:00:36.200 --> 0:00:38.519 that were made at General Electric. I mean, by and 0:00:38.640 --> 0:00:43.080 large they got more right than wrong. And to be blunt, 0:00:43.400 --> 0:00:46.840 I think he inherited a mess from Jack Welsh, who 0:00:46.880 --> 0:00:51.360 I've described as the most overrated CEO in history. There 0:00:51.400 --> 0:00:55.600 was an accounting scandal lurking there. Uh Jack paid himself 0:00:55.680 --> 0:00:58.200 an obscene amount of money, a four hundred and sixty 0:00:58.240 --> 0:01:03.840 million dollar seven paths package and just you know, manipulating earnings, 0:01:03.880 --> 0:01:07.160 pulling a magic penny out of g capital. And I 0:01:07.319 --> 0:01:11.240 gave himilt every opportunity of the throw well show under 0:01:11.280 --> 0:01:15.280 the bus, and he refused to. In fact, he could 0:01:15.319 --> 0:01:19.800 not have been more generous to his predecessor, who um 0:01:19.840 --> 0:01:22.280 not only gave him a company with a ticking time 0:01:22.280 --> 0:01:26.640 bomb in it um, but a big conglomerate industrial company 0:01:26.640 --> 0:01:29.640 with a fifty pe how is it not inevitable that 0:01:29.720 --> 0:01:32.000 ge stock price was going to come back to earth 0:01:32.440 --> 0:01:38.679 a fifteen or is reasonable for a industrial conglomerate, not fifty, 0:01:38.800 --> 0:01:41.960 And so the stock performance was more or less, you know, 0:01:42.040 --> 0:01:46.640 out of his hands. He is super knowledgeable, really just 0:01:46.720 --> 0:01:51.480 a tremendous guy. Under different circumstances. I think his reputation 0:01:51.720 --> 0:01:55.080 as a CEO and a leader would be up there 0:01:55.120 --> 0:01:58.520 amongst the best in the world. But because of the 0:01:58.600 --> 0:02:02.920 situation he stepped into. Literally his first day of work 0:02:03.000 --> 0:02:06.200 was September tenth, two thousand and one, and he tells 0:02:06.240 --> 0:02:08.959 him fascinating stories about it. I found the book to 0:02:09.040 --> 0:02:14.240 be really interesting, totally transparent, very honest, and very educational. 0:02:14.280 --> 0:02:17.600 There's a lot to learn from his experiences and uh, 0:02:18.000 --> 0:02:22.480 just really a fascinating person with an incredible work history 0:02:22.600 --> 0:02:25.079 and and just a lot to share. Uh. He now 0:02:25.160 --> 0:02:28.160 is teaching at Stanford Business School and his adventure partner 0:02:28.480 --> 0:02:31.600 at one of the larger venture capital funds. So, with 0:02:31.720 --> 0:02:36.960 no further ado, my conversation with former g E CEO 0:02:37.680 --> 0:02:43.800 Jeff Emilt, this is Mesters in Business with very renults 0:02:44.280 --> 0:02:49.360 on Bluebird Radio, my extra special guest this week is 0:02:49.440 --> 0:02:55.120 Jeff Emilt. He joined General Electric in n in the plastics, 0:02:55.160 --> 0:03:00.000 appliances and healthcare division. He eventually led Gees Medical system 0:03:00.040 --> 0:03:04.080 Dam's division from nine seven to two thousand, rising to 0:03:04.240 --> 0:03:08.079 the role of CEO, where he led General Electric from 0:03:08.080 --> 0:03:11.000 two thousand and one to two thousand and seventeen. His 0:03:11.080 --> 0:03:14.640 new book is Hot Seat, What I Learned Leading a 0:03:14.639 --> 0:03:20.640 Great American Company. Jeff Emmilt's welcome to Bloomberg. Hey, Barry, Thanks, 0:03:20.680 --> 0:03:22.920 It's great to be here. So tell us a bit 0:03:22.960 --> 0:03:25.920 about your path to becoming the CEO of one of 0:03:26.080 --> 0:03:31.040 America's crown jewels. Your dad was an employee at ge, 0:03:31.080 --> 0:03:34.200 wasn't he, Yeah, Berry, I grew up in Cincinnati, Ohio. 0:03:35.040 --> 0:03:38.640 My dad was a career kind of manufacturing guy in 0:03:38.720 --> 0:03:41.440 our aviation business. So I kind of grew up in 0:03:41.480 --> 0:03:45.280 the shadow of the company, if you will. Um, I 0:03:45.640 --> 0:03:48.280 you know, went away to school and uh and went 0:03:48.360 --> 0:03:52.160 to a business school and I graduated in two And 0:03:52.200 --> 0:03:55.600 it wasn't necessarily that my father had worked there. But 0:03:55.640 --> 0:03:58.760 what I thought I'd do is go someplace where I 0:03:58.800 --> 0:04:01.080 can learn to be a man for you know, kind 0:04:01.080 --> 0:04:04.440 of learned what general management was like. G had a 0:04:04.520 --> 0:04:08.840 great reputation. So I went to work in two in 0:04:08.880 --> 0:04:12.880 the plastics business. I thought i'd stay five years, and 0:04:12.960 --> 0:04:15.920 I ended up staying thirty five years. So you know, 0:04:15.960 --> 0:04:21.320 I would say careers are based on performance and luck, 0:04:22.240 --> 0:04:27.159 and my career had both of those. I started in 0:04:27.279 --> 0:04:32.520 the plastics business really commercially, selling in Detroit and in 0:04:32.560 --> 0:04:35.880 the western half of the US, and that was really 0:04:35.920 --> 0:04:39.560 interesting and fun. I learned so much by selling two 0:04:39.600 --> 0:04:42.840 big companies like General Motors and Ford, which at that 0:04:42.880 --> 0:04:45.640 time we're kind of the giants of American industry, and 0:04:46.080 --> 0:04:49.479 they were really a challenge. And then I had my 0:04:49.560 --> 0:04:52.560 first real break when I was in my early thirties. 0:04:53.760 --> 0:04:57.960 I was moved to our appliance business to run the 0:04:58.000 --> 0:05:02.200 service business during a major act recall, and so I 0:05:02.279 --> 0:05:04.800 was at a very high profile job at a very 0:05:04.839 --> 0:05:08.960 young age. That was extremely difficult. I had lots of 0:05:09.000 --> 0:05:13.880 exposure to Jack Walsh early in his UH CEO tenure, 0:05:14.760 --> 0:05:16.880 and you know, I think getting noticed at an early 0:05:16.920 --> 0:05:19.400 age is actually, you know, one of the things that 0:05:19.480 --> 0:05:23.920 helps people push them along in their career. I later 0:05:23.960 --> 0:05:26.280 went back to the plastics business, and then right before 0:05:26.279 --> 0:05:31.159 I became CEO, went to our healthcare business, and that 0:05:31.279 --> 0:05:35.120 was just a perfect fit. It was relatively small business, 0:05:35.200 --> 0:05:39.360 but it was very technical, very global. It played to 0:05:39.400 --> 0:05:41.640 a lot of my strengths, and that was the platform 0:05:41.680 --> 0:05:44.719 that ultimately I moved from to become CEO of the 0:05:44.760 --> 0:05:47.640 company in two one. So before we moved to your 0:05:47.640 --> 0:05:51.120 tenure as CEO, I have to ask when you started 0:05:51.120 --> 0:05:55.880 the medical systems division was relatively small, but that eventually 0:05:55.920 --> 0:06:00.000 became a pretty substantial growth driver. Tell us a little 0:06:00.000 --> 0:06:04.719 a bit about the general electric medical systems division you ran, Yeah, 0:06:04.760 --> 0:06:07.599 So you know, I went there again. I had been 0:06:07.640 --> 0:06:10.880 really in the appliances and plastics, and I went there 0:06:10.880 --> 0:06:16.440 in I remember I had been there for about two 0:06:16.480 --> 0:06:20.240 months and I was talking to Jack on the phone 0:06:20.720 --> 0:06:24.719 and I said, you know, Jack, this is a huge industry. 0:06:24.800 --> 0:06:28.120 You know, trillions of dollars. Uh. It seems to me 0:06:28.279 --> 0:06:30.200 like we've got a pretty good footprint. A lot of 0:06:30.200 --> 0:06:33.800 people respect us, but our business as a peanut, it's 0:06:33.839 --> 0:06:36.279 three billion dollars. You know. We we need to be 0:06:37.240 --> 0:06:41.400 more adventurous, we need to be uh, taking more risks. 0:06:42.320 --> 0:06:45.279 And I think he it just resonated with him. It 0:06:45.400 --> 0:06:47.360 was kind of the right comment at the right time, 0:06:48.200 --> 0:06:51.039 and he became quite encouraging right right after that to 0:06:51.120 --> 0:06:55.080 both do acquisitions but also to help grow globally and 0:06:55.640 --> 0:07:00.400 invest in organic growth and technology. So, uh, you know, 0:07:01.000 --> 0:07:04.680 to your point, and so that from three billion became 0:07:04.760 --> 0:07:08.120 a one billion dollar business by the time I retired, 0:07:08.480 --> 0:07:11.560 and you know, yep, today it's still you know, there's 0:07:11.680 --> 0:07:16.120 plenty of opportunities in healthcare. So it played to my strength. 0:07:16.400 --> 0:07:19.880 I would say in my career, I was a good 0:07:19.920 --> 0:07:23.440 product manager. I was good at you know, kind of 0:07:23.960 --> 0:07:28.360 marketing and sales. I knew how to strategically think my 0:07:28.440 --> 0:07:32.520 way through a business problem, and all of those things 0:07:32.600 --> 0:07:35.360 kind of came to the forefront when I was in 0:07:35.440 --> 0:07:40.400 gee healthcare business. So you become CEO. Your first day 0:07:40.440 --> 0:07:44.480 on the job is September two thousand and one. Tell 0:07:44.560 --> 0:07:47.360 us about your second day on the job. What was 0:07:47.480 --> 0:07:51.800 that like? Yeah, so, you know what, you have to 0:07:51.960 --> 0:07:54.880 kind of understand the era a little bit. You know, 0:07:54.960 --> 0:08:00.240 the nineties, we're just a moment of tranquility, the U. 0:08:00.320 --> 0:08:04.120 S economy, the economy was growing, the US was the 0:08:04.280 --> 0:08:06.840 dominant player in the world. The world was at peace, 0:08:07.800 --> 0:08:10.560 and so that was kind of the let's say, the 0:08:10.680 --> 0:08:12.760 environment which I grew my career, at least the last 0:08:12.760 --> 0:08:15.840 part of my group before it became CEO. And so 0:08:15.920 --> 0:08:19.200 September eleventh happened, and it was just a horrible tragedy, 0:08:20.040 --> 0:08:21.960 and to a certain extent, even though we didn't know 0:08:22.000 --> 0:08:24.800 it at the time, it really marked a change in 0:08:24.840 --> 0:08:28.640 the world, right it It marked to change in globalization, 0:08:28.800 --> 0:08:33.040 how companies were viewed, what tail risk was. So there's 0:08:33.080 --> 0:08:36.480 a bunch of stuff that actually happened. But from a 0:08:36.640 --> 0:08:39.560 practical standpoint, you know, here I was. I had run 0:08:39.720 --> 0:08:43.800 let's say, seven billion dollar healthcare business, and all of 0:08:43.840 --> 0:08:47.679 a sudden, I'm running a hundred whatever billion dollar conglomerate. 0:08:48.840 --> 0:08:51.800 And a day into my job, I had to start 0:08:51.840 --> 0:08:56.360 making decisions. There was no honeymoon, there was no prep time. 0:08:56.559 --> 0:09:00.400 I had to start making important decisions like do we 0:09:00.480 --> 0:09:03.640 land airlines money? What do we do we restructure our 0:09:03.679 --> 0:09:07.040 aviation business, how should we think about insurance? And I'm 0:09:07.040 --> 0:09:10.040 doing that in real time in the first, second, third, 0:09:10.120 --> 0:09:13.719 fourth week on the job. I had to communicate now 0:09:13.840 --> 0:09:17.200 to several hundred thousand people who kind of looked in 0:09:17.320 --> 0:09:21.280 horror at what was going on in New York City. 0:09:21.400 --> 0:09:24.800 I had to employees that died tragically in the in 0:09:24.840 --> 0:09:27.120 the event, so you know, kind of there was just 0:09:27.200 --> 0:09:30.240 no warm up and no prep to get ready for 0:09:31.040 --> 0:09:34.800 making billion dollar decisions late at night that you had 0:09:34.800 --> 0:09:38.600 to be made under pressure. And you know, I just 0:09:38.640 --> 0:09:42.240 grew up quite quickly, and that and that in that context, 0:09:42.320 --> 0:09:47.200 like like most crises do you know, it's um you 0:09:47.320 --> 0:09:49.360 just don't have a chance. You know, it's kind of 0:09:49.400 --> 0:09:54.200 like life gets lived forward, not backward. And so I 0:09:54.320 --> 0:09:57.520 was experiencing that in real time that I had the 0:09:57.679 --> 0:09:59.040 kind of you know, there was no way to kind 0:09:59.040 --> 0:10:01.640 of say, Okay, I'm gonna sit this one out. You 0:10:01.679 --> 0:10:04.360 were just living life as it as it came at you. 0:10:04.760 --> 0:10:08.679 So I like the way you use the chapter structure, 0:10:08.880 --> 0:10:12.480 the titles of each chapter to go into a deep 0:10:12.600 --> 0:10:18.719 dive about all sorts of broad topics in leadership. And 0:10:18.760 --> 0:10:22.600 one of your chapters is leaders Persevere in a crisis. 0:10:23.200 --> 0:10:27.880 Give us a little details about how you persevered. Let's 0:10:27.880 --> 0:10:30.360 start with September eleven, and then we could go on 0:10:30.520 --> 0:10:35.480 to what you learned about crisis management at Fukushima. Yeah, 0:10:35.520 --> 0:10:38.400 so I think very maybe we'll take three of them. 0:10:38.480 --> 0:10:42.080 Let's take nine eleven um, and then let's take the 0:10:42.120 --> 0:10:45.800 global financial crisis and will take Fukushima because I had 0:10:45.840 --> 0:10:47.920 all of those, let's say between two thousand and one 0:10:47.920 --> 0:10:51.079 and two thousand eleven. I think in the in the 0:10:51.480 --> 0:10:55.600 in nine eleven, you know what you learned is is 0:10:55.640 --> 0:10:59.960 really two things. I would say one was that during 0:11:00.040 --> 0:11:03.360 a crisis, you have to hold two truths. And one 0:11:03.520 --> 0:11:06.760 is that the worst thing that you know can happen. 0:11:07.559 --> 0:11:09.840 And the other thing is that you shouldn't give up 0:11:09.880 --> 0:11:14.480 hope that a better future is out there once you 0:11:14.559 --> 0:11:17.480 make it to the other side. So we had to 0:11:17.480 --> 0:11:21.640 restructure our commercial aviation business because clearly airlines are gonna 0:11:21.640 --> 0:11:26.679 be traveling less. But in two thousand and two, Alan Malally, 0:11:26.760 --> 0:11:29.600 who isn't gooing at the time, he launched the idea 0:11:29.640 --> 0:11:33.760 of the Dreamliner, which was a revolutionary new aircraft that 0:11:33.880 --> 0:11:36.240 was going to take a billion dollars to make the engine, 0:11:36.960 --> 0:11:41.480 and we won that that that order in that commitment, 0:11:41.559 --> 0:11:45.479 So we made a billion dollar decision at the absolute 0:11:45.480 --> 0:11:48.719 worst time in the history of the industry. And so 0:11:48.880 --> 0:11:51.240 you need to hold two truths at the same time. 0:11:51.760 --> 0:11:53.839 I think the other one is just the need for communication. 0:11:54.040 --> 0:11:58.240 I think so much changed around nine eleven, and what 0:11:58.400 --> 0:12:01.800 you really find is that, uh, in a crisis, you 0:12:01.920 --> 0:12:04.679 have to be willing to talk about what you know 0:12:04.760 --> 0:12:07.360 and what you don't know, and people just want to 0:12:07.400 --> 0:12:12.080 hear your voice. So those were the two things I 0:12:12.200 --> 0:12:17.040 learned during the financial crisis. The financial crisis, I think 0:12:17.200 --> 0:12:22.160 just if you're in financial services, probably the three months 0:12:22.240 --> 0:12:27.840 after Layman Brothers went bankrupt, there's just no describing how 0:12:27.880 --> 0:12:32.480 every day brought a new challenge, every day brought fear, 0:12:33.160 --> 0:12:35.720 and it was just you just really had to be 0:12:37.120 --> 0:12:39.960 on your toes, you know, kind of twenty four hours 0:12:39.960 --> 0:12:43.560 a day. And what I learned in that crisis was 0:12:43.720 --> 0:12:46.840 that you needed to have contingencies. You needed to have 0:12:46.960 --> 0:12:49.640 like I'm gonna try this one day, I'm gonna do 0:12:49.760 --> 0:12:52.680 something else the next day doesn't work, and so you 0:12:52.760 --> 0:12:56.240 just had to take wave after wave of contingencies. You 0:12:56.320 --> 0:12:58.360 learned that leaders have to absorb fear. I mean, one 0:12:58.400 --> 0:13:00.559 of the things that unique about g and Times that 0:13:00.679 --> 0:13:04.160 were half our company was in financial services, but the 0:13:04.200 --> 0:13:06.600 other half was doing fine. It was in healthcare and 0:13:06.640 --> 0:13:11.160 aviation and a whole series of different businesses. So you know, 0:13:11.559 --> 0:13:13.840 it wasn't coming on me not to allow anything that 0:13:13.920 --> 0:13:17.520 was going on in financial services to spill over into 0:13:17.640 --> 0:13:21.280 the other parts of of the company. So you really 0:13:21.360 --> 0:13:24.280 learned that you have to stay flexible and you have 0:13:24.400 --> 0:13:28.200 to absorb fear. And then when I moved to Fukushima, 0:13:28.480 --> 0:13:31.239 you know when I learned in Fukushima is the importance 0:13:31.440 --> 0:13:37.360 of risk management. So Fukushima was a It was a 0:13:37.400 --> 0:13:45.200 tsunami in Japan and it impacted seven nuclear reactors forward 0:13:45.280 --> 0:13:49.360 Ge that were installed in the nineteen sixties and early 0:13:49.400 --> 0:13:53.240 nineteen seventies. And I was in Australia when it happened. 0:13:53.240 --> 0:13:57.720 I was traveling, and I had my assistant send me 0:13:57.960 --> 0:14:02.240 the contract that was from the nineteen sixties that we 0:14:02.280 --> 0:14:05.400 had signed with the with TEPCO, who is the big 0:14:05.480 --> 0:14:09.000 Japanese utility, just to kind of read what it said 0:14:09.160 --> 0:14:11.840 and and meet, you know, what our liabilities might be 0:14:11.880 --> 0:14:15.959 and things like that. And I was so impressed by 0:14:16.000 --> 0:14:18.880 the work that our lawyers and engineers had done in 0:14:18.920 --> 0:14:23.800 the nineteen sixties to envision all kinds of natural disasters 0:14:23.840 --> 0:14:27.480 and all kinds of contingencies. And you know, I would say, 0:14:27.560 --> 0:14:29.960 unlike the other terrorist events, in the case of Fukushima, 0:14:30.040 --> 0:14:33.960 that just was a very robust risk manager process and 0:14:34.080 --> 0:14:38.760 even foresaw a horrible natural disaster like the one in Fukushima. 0:14:38.920 --> 0:14:42.200 So every crisis is different. I think a little bit 0:14:42.200 --> 0:14:45.280 about COVID today and what's similar and what's different. But 0:14:46.240 --> 0:14:49.600 I think the things that are always true are the 0:14:50.160 --> 0:14:56.080 leaders necessity to absorb fear, to hold two truths, to 0:14:56.240 --> 0:15:00.160 make timely decisions, and to be a good communicator even 0:15:00.160 --> 0:15:03.640 if what you're communicating is you don't know so And 0:15:03.760 --> 0:15:08.000 as one of your chapters is titled, leaders also have 0:15:08.200 --> 0:15:12.520 to maintain optimism. Yeah, I think again it's there's a 0:15:12.520 --> 0:15:15.760 lot that gets written today about it's better to be 0:15:15.800 --> 0:15:18.560 a pessimist than an optimist. But I think I think 0:15:18.560 --> 0:15:21.240 you always have to understand that what you know, you 0:15:21.280 --> 0:15:23.800 have to lead people through the toughest times, but you 0:15:23.840 --> 0:15:26.480 need to show them what the future could look like 0:15:26.640 --> 0:15:29.440 if you if you really work well together. Yeah. There's 0:15:29.440 --> 0:15:33.640 a wonderful book about quote, The Triumph of the Optimists, 0:15:33.640 --> 0:15:38.560 that just explain why the pessimistic perspective in the twentieth 0:15:38.560 --> 0:15:42.280 century was really the wrong side of the trade. Yeah. 0:15:42.800 --> 0:15:46.320 Before we leave your career and start delving more into 0:15:46.400 --> 0:15:49.080 general electric I have to just ask a couple of 0:15:49.160 --> 0:15:53.040 questions about what you're doing post g E. How do 0:15:53.080 --> 0:15:57.040 you enjoy teaching at Stanford. Yeah, so I teach a 0:15:57.160 --> 0:16:01.320 class at Stanford on what we assistants leadership, but it's 0:16:01.360 --> 0:16:06.320 really leading through disruption. And I'd say I always wanted 0:16:06.680 --> 0:16:10.040 this will be my fourth year. I always wanted to 0:16:10.120 --> 0:16:12.200 kind of try my hand at teaching. By the way, 0:16:12.720 --> 0:16:14.160 it's a lot harder than I ever thought it was 0:16:14.160 --> 0:16:18.600 going to be. But I think students, uh, you know, 0:16:18.600 --> 0:16:22.520 they're so smart today. They keep you young. They're very 0:16:22.640 --> 0:16:27.360 hungry for not just the theoretical but the practical experience. 0:16:28.400 --> 0:16:31.520 And I think one of the things that you know 0:16:31.520 --> 0:16:33.680 when you're when you're a business school student, you think 0:16:33.720 --> 0:16:36.440 you know it all. And one of the things that 0:16:36.880 --> 0:16:39.880 that I always hearkened back to them is, look, every 0:16:39.960 --> 0:16:42.320 job looks easy to you're the one doing it right. 0:16:42.600 --> 0:16:44.160 You may have read a case and you think the 0:16:44.240 --> 0:16:46.920 CEO is a dumpy, but someday you're going to be 0:16:46.960 --> 0:16:49.520 that dummy. Right, Someday you're gonna be in those shoes 0:16:49.880 --> 0:16:51.680 and you're gonna have to make the decisions and you 0:16:51.720 --> 0:16:56.000 can't judge them, and someone working some won't. And so 0:16:56.120 --> 0:17:00.160 your ability to persevere through that kind of criticism is 0:17:00.200 --> 0:17:02.760 really key to who you are and what you'll do. 0:17:03.640 --> 0:17:05.560 And then I also do venture capital. I always wanted 0:17:05.560 --> 0:17:08.639 to work when I retired with small companies, with innovators, 0:17:08.640 --> 0:17:12.040 with founders, mainly in healthcare, but a little bit in 0:17:12.119 --> 0:17:15.440 techt I have to say, between the teaching and my 0:17:15.560 --> 0:17:18.480 venture work, I really like it. I really enjoy it. 0:17:19.200 --> 0:17:22.400 I think it's a way for me to stay fresh, 0:17:22.600 --> 0:17:24.359 but it's also a way for me to get back 0:17:25.160 --> 0:17:27.800 two leaders of the future and hopefully help them through 0:17:27.840 --> 0:17:31.560 their through their journey. So you're a venture partner at 0:17:31.640 --> 0:17:35.439 New Enterprise Associates, which is one of the larger venture 0:17:35.480 --> 0:17:40.439 shops out in California. How different is it thinking about 0:17:40.600 --> 0:17:45.399 companies that are tiny really at the conception with the 0:17:45.480 --> 0:17:53.040 potential of of changing the paradigm, versus running behemoth conglomerate. 0:17:53.560 --> 0:17:55.920 You know, that's a really great question. In some ways, 0:17:55.960 --> 0:18:00.520 it's extremely different, right because you know it, e we 0:18:00.680 --> 0:18:07.200 just had massive scale and massive diversity, and and when 0:18:07.280 --> 0:18:10.680 you're in a startup, you're small and you really focus 0:18:10.760 --> 0:18:15.000 on one thing. I mean, most startups so narrow and deep, 0:18:15.080 --> 0:18:17.800 and that's what makes them successful and then they begin 0:18:17.800 --> 0:18:20.080 to grow. So on one hand that those are very different. 0:18:21.560 --> 0:18:24.000 On the other hand, whether you're going from ten employees 0:18:24.040 --> 0:18:27.479 to a hundred or a hundred to a thousand. Learning 0:18:27.520 --> 0:18:31.480 to scale is an important trade. There's an important skill 0:18:32.320 --> 0:18:35.840 and something that every startup has to do, and that's 0:18:35.880 --> 0:18:38.199 something that I can be very helpful with. You know, 0:18:38.240 --> 0:18:40.679 how do you how do you hire first line managers? 0:18:40.720 --> 0:18:44.320 How do you put in performance systems? What does a 0:18:44.359 --> 0:18:47.360 good human resource leader look like? Those are a lot 0:18:47.400 --> 0:18:49.560 of the questions that many of the founders I work 0:18:49.640 --> 0:18:53.119 with are asking, and I can be extremely helpful in 0:18:53.160 --> 0:18:56.439 that regard. So, you know, what, what you're trying to 0:18:56.520 --> 0:18:59.000 do when you're in a role like mine is find 0:18:59.240 --> 0:19:01.920 what is most useful but the company you're working with 0:19:02.520 --> 0:19:04.879 and play that role. I guarantee there's something I can 0:19:04.920 --> 0:19:07.920 be helped with on every company. But there's some things 0:19:07.960 --> 0:19:10.680 that my skill set doesn't play as much for and 0:19:11.000 --> 0:19:14.040 I don't try to overdo it. I try to just 0:19:14.160 --> 0:19:17.520 find my niche and play it as well as I can. 0:19:18.240 --> 0:19:21.679 Quite interesting, let's talk a little bit about some of 0:19:21.720 --> 0:19:24.919 the challenges of running such a big company. What was 0:19:24.960 --> 0:19:30.680 it like managing three hundred thousand employees? Well, I think 0:19:30.760 --> 0:19:34.359 that you know, you've got to think about several things 0:19:34.440 --> 0:19:37.800 when you manage its size. You know, one is you've 0:19:37.840 --> 0:19:41.760 got to divide the company up into what I would 0:19:41.800 --> 0:19:46.080 call both vertical and horizontal cohorts. Right, So in the 0:19:46.080 --> 0:19:49.720 case of a conglomerate, you've got many different businesses and 0:19:49.960 --> 0:19:52.639 ultimately from most of the people in the company, the 0:19:52.760 --> 0:19:56.080 business is who they identify with. So that's that's what 0:19:56.160 --> 0:19:59.760 I call a vertical group. You have to create a 0:19:59.800 --> 0:20:02.160 hor as on a network. So you basically look at 0:20:02.760 --> 0:20:05.240 you know, kind of officers of the company or senior 0:20:05.320 --> 0:20:08.800 vps or business leaders, and you want them to be 0:20:08.920 --> 0:20:11.960 part of a collective whole. You want them to drive 0:20:12.040 --> 0:20:14.520 common initiatives. You want them to be accountable for each 0:20:14.560 --> 0:20:19.119 other in terms of in terms of mission and metrics 0:20:19.160 --> 0:20:22.960 and things like that. You've got to instrument the company 0:20:22.960 --> 0:20:25.520 in a way that you know whether you're doing well 0:20:25.640 --> 0:20:30.440 or doing poorly. So some metrics are important. And lastly, 0:20:30.760 --> 0:20:33.399 you know very you know, if you if you go 0:20:33.520 --> 0:20:40.119 through change, there's probably two or three or four initiatives 0:20:40.800 --> 0:20:44.440 that you want to embrace across the company because your 0:20:44.560 --> 0:20:50.720 unique scale can really drive substantial change. Right. So so 0:20:50.840 --> 0:20:56.040 it's it's really about communication, It's about creating good cohorts. 0:20:56.320 --> 0:21:00.280 It's about metrics, and it's about one or two were 0:21:00.280 --> 0:21:03.960 three really good initiatives that can leverage your scale. But 0:21:04.080 --> 0:21:06.160 you work it every day because the you know, size 0:21:06.720 --> 0:21:10.560 can be an awesome advantage, it also could be a 0:21:10.640 --> 0:21:14.879 huge disadvantage, and you're always teetering right between making an 0:21:15.000 --> 0:21:20.560 advantage and letting it be a disadvantage. Interesting, So, becoming 0:21:20.800 --> 0:21:24.800 um public is less and less popular these days than 0:21:24.880 --> 0:21:28.280 it used to be. How do you balance the various 0:21:28.320 --> 0:21:34.000 constituencies between your employees, your customers, your shareholders, and your 0:21:34.000 --> 0:21:36.840 board of directors. That seems like a lot of balls 0:21:36.880 --> 0:21:40.520 to keep in the air while at once, Yeah, look 0:21:40.560 --> 0:21:43.280 it's this is you know, I've heard this question asked, 0:21:43.920 --> 0:21:47.119 you know, in many different ways, over many different eras, 0:21:47.200 --> 0:21:52.760 and it's it's still you know, the answers change over time. 0:21:53.080 --> 0:21:57.879 They're never totally satisfying. But that's part of the paradox 0:21:57.920 --> 0:22:02.119 of running a public company. So I would say, you know, 0:22:02.359 --> 0:22:06.600 the answer is that investors own the company and unless 0:22:06.680 --> 0:22:12.520 you're you're doing something that that is aligned with them, um, 0:22:12.600 --> 0:22:15.640 you're gonna get in trouble. Right, So, so there there 0:22:15.800 --> 0:22:18.679 is a sense that if you're a public company investors 0:22:18.680 --> 0:22:24.919 have a huge say increasingly, and particularly when I compare 0:22:26.000 --> 0:22:30.320 with let's say two thousand one, the intersection between companies 0:22:30.359 --> 0:22:34.800 and society has in government has never been greater than 0:22:34.840 --> 0:22:39.159 it is today. Right, Government is a big actor in 0:22:39.320 --> 0:22:43.680 every industry and that's not going to change. So so 0:22:44.240 --> 0:22:50.359 investors are key. Government and society hugely important today versus 0:22:50.359 --> 0:22:53.639 the past. And then you know, having led through a 0:22:53.720 --> 0:22:58.000 couple of three or four crises, in a crisis, the 0:22:58.080 --> 0:23:00.639 people that matter most of your employee, you know, some 0:23:00.760 --> 0:23:04.280 other words like like when you're when you're taking incoming 0:23:04.440 --> 0:23:07.439 every day. The only way to get out of a problem, 0:23:07.480 --> 0:23:09.359 The only way to get out of a mess is 0:23:09.680 --> 0:23:12.520 if your team is aligned and if you can help 0:23:12.520 --> 0:23:16.280 bring them with your help them, you know, have them 0:23:16.320 --> 0:23:21.040 help you solve the problem. So it's complicated. Uh, it's 0:23:21.080 --> 0:23:24.040 more complicated to be honest with you today than it 0:23:24.200 --> 0:23:26.520 was twenty years ago. But there's never going to be 0:23:26.960 --> 0:23:30.800 a nice, simple, easy answer to your question. So in 0:23:30.840 --> 0:23:35.000 the book, I I found your criticism of the under 0:23:35.040 --> 0:23:40.440 investment at GE for the decades that preceded your tenure 0:23:41.200 --> 0:23:45.520 was pretty legitimate, considering this is the company founded by 0:23:45.640 --> 0:23:49.240 Thomas Edison, how much under investment in R and D 0:23:50.080 --> 0:23:53.480 took place at General Electric prior to your tenure, and 0:23:53.520 --> 0:23:56.800 what were the ramifications of that under investment. Yeah, so, 0:23:57.119 --> 0:23:59.840 you know, I I took over for a really good 0:24:00.000 --> 0:24:05.119 CEO who was extremely well known and who was I 0:24:05.119 --> 0:24:07.919 would say in the in the decade of the nineties. 0:24:10.000 --> 0:24:12.840 You know, it was really kind of leveraging that decade 0:24:12.920 --> 0:24:20.640 where I would say financial services and management practices were valued, 0:24:21.040 --> 0:24:24.600 and what most general managers worked on were those two things. 0:24:25.760 --> 0:24:28.480 And so when we got to the end of the 0:24:28.520 --> 0:24:32.600 nine nineties, GE was a company that had let's say, 0:24:32.600 --> 0:24:37.879 a relatively stale industrial portfolio, a very vibrant and fast 0:24:37.960 --> 0:24:43.400 growth financial services set of businesses, and a market multiple 0:24:43.560 --> 0:24:50.000 that exceeded a tech company. So we were just imbalanced. Um, 0:24:51.440 --> 0:24:54.199 you know, it wasn't that our industrial businesses all had 0:24:54.280 --> 0:24:58.399 high market share, but they weren't necessarily technical leaders. And 0:24:58.600 --> 0:25:02.879 we had not been in testing as robustly in in 0:25:03.680 --> 0:25:06.280 R and D and innovation as we should have. And 0:25:06.760 --> 0:25:08.879 you know, if you looked at let's say, you know, 0:25:09.000 --> 0:25:16.480 the top uh D fifty people in the company that 0:25:16.600 --> 0:25:21.280 are called vice presidents or officers, only three were engineering leaders. Right, 0:25:21.400 --> 0:25:24.840 So if you think about the size of GE, and 0:25:25.000 --> 0:25:30.080 that's kind of symbolic of what was valued in terms 0:25:30.160 --> 0:25:33.720 of the organization and the functions. You know, that's kind 0:25:33.720 --> 0:25:37.600 of where we were in two thousands. So we had 0:25:37.600 --> 0:25:39.399 a strong balance sheet, We had many good things. We 0:25:39.520 --> 0:25:43.760