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#116 Jeff Immelt: Leadership In A Crisis

Jul 27, 2021 52m 14s 30 insights
Former General Electric CEO Jeff Immelt looks back on his two decades with the company and the strategies he used to lead during three separate crises. In this episode, Immelt discusses what happened during those events and why, what it was like to take over for GM icon Jack Welch, getting the information you need to make decisions, activist investors, fighting complexity, the mismatched timelines between CEOs and shareholders, unions, and so much more. Immelt is currently a venture partner at New Enterprise Associates and a lecturer in management at the Stanford University Graduate School of Business. He served as the Chairman and CEO of GE from 2001-17, and is the author of the 2021 memoir Hot Seat: What I Learned Leading a Great American Company.   -- Go Premium: Members get early access, ad-free episodes, hand-edited transcripts, searchable transcripts, member-only episodes, and more. Sign up at: https://fs.blog/membership/   Every Sunday our newsletter shares timeless insights and ideas that you can use at work and home. Add it to your inbox: https://fs.blog/newsletter/   Follow Shane on Twitter at: https://twitter.com/ShaneAParrish
Actionable Insights

1. Cultivate Strong Friendships

Prioritize learning how to be a good friend, as having a supportive network helps you navigate life’s inevitable ups and downs more effectively than facing them alone.

2. Prioritize Progress Over Perfection

Focus on making progress by taking action and making decisions, understanding that inaction is often a greater failure than making an imperfect choice. This approach ensures forward momentum, especially in dynamic or crisis situations.

3. Balance Short-Term and Long-Term

Consciously fuse short-term demands, such as share price, with long-term strategic goals and social responsibilities. This mindful balance ensures sustainable growth and prevents reactive decision-making.

4. Build Relationships Proactively

Cultivate strong relationships and networks by engaging with people when you don’t immediately need anything. These connections build trust and can prove invaluable during critical moments or for continuous learning.

5. Absorb Fear, Avoid Blame

In a crisis, good leaders absorb all the fear and information without pointing fingers or blame. This allows them to maintain focus and lead effectively through uncertainty.

6. Maintain Flexible Point of View

Keep your mind open to ’two truths’—that both great and terrible things can happen simultaneously. This flexible perspective is crucial for remaining adaptable and realistic in uncertain times.

7. Empower Decision-Making

Push leaders to make decisions, recognizing that failing to act is often a greater mode of failure than making a wrong decision. Progress requires clear yes or no answers and confidence.

8. Go to Ground for Reality

Regularly leave the office to travel to businesses, customers, and markets, seeing things for yourself and engaging with frontline employees. This bypasses filters and biases to gain accurate, ground-level insights into operational realities.

9. Actively Fight Complexity

Constantly be on the lookout for and eliminate unnecessary organizational complexity, such as excessive management layers or unclear reporting structures. This speeds up decision-making, reduces overhead, and improves efficiency.

10. Cultivate Deep Domain Expertise

Develop deep domain expertise, particularly in technical areas, as it is increasingly critical for success in today’s specialized world. This depth of knowledge is essential for effective leadership and innovation.

11. Observe & Ask Frontline Workers

Engage directly with frontline workers by observing their tasks and asking ‘why’ and ‘how’ they perform their work. This provides profound, unfiltered insights into operational realities beyond formal presentations.

12. Identify Steadfast Team Members

During a crisis, observe who remains steadfast and build your core ‘A-team’ with these trustworthy individuals. They provide reliable information and support when it’s most critical.

13. Foster Transparent Decision-Making

Conduct decision-making meetings in large, transparent settings with diverse viewpoints, ensuring everyone understands the rationale, options considered, and the final decision. This approach builds clarity and buy-in across the organization.

14. Balance Growth and Safety

Continuously strive to find the right balance between pursuing growth and maintaining financial safety, avoiding ‘redlining’ during good times. This ensures long-term stability and resilience against unforeseen challenges.

15. Maintain Team Loyalty

Actively foster team loyalty and ensure direct reports are dedicated to problem-solving, not internal politics. Strong team cohesion is vital for navigating challenges, as a board is less likely to replace a leader whose team remains committed during a crisis.

16. Drive Incremental Change

When taking over from a highly successful leader, implement change step-by-step rather than a complete overhaul. This approach helps bring the team along and manages risk, especially when the company appears ‘perfect’ externally.

17. Develop Self-Reliance

Cultivate a strong sense of self-reliance, understanding that your identity and self-worth are not defined by external validation or the approval of others. This allows you to navigate career ups and downs with resilience.

18. Stick to Your Point of View

Formulate a strong point of view for your vision and stick with it, even when facing external pressures or criticism. This provides consistent direction and guides the organization through transitions.

19. Decide with Sufficient Information

Aim to have about 80% of the necessary information to make a decision, rather than waiting for perfection or complete certainty. This approach avoids paralysis by analysis and ensures timely progress.

20. Focus on Essential Risk Factors

Identify and focus on the top three enterprise-level risk factors, with the CEO personally articulating them to investors. This ensures clarity and accountability, preventing dilution of focus that comes from listing too many risks.

21. Embrace Forward Motion in Crisis

In a crisis, prioritize forward motion by engaging with employees through town halls and avoiding the cancellation of scheduled meetings. This maintains morale, provides reassurance, and prevents widespread anxiety within the organization.

22. Maintain Normal Lifestyle

Prioritize exercise and try to maintain as normal a lifestyle as possible during stressful periods. This helps manage personal energy levels and stay grounded.

23. Ensure Investor Transparency

Be transparent with investors, ensuring they fully understand what they are investing in and the rationale behind it. This builds trust and prevents situations where major shareholders might divest due to a lack of information.

24. Implement Feedback Loops

Establish continuous feedback loops to analyze outcomes, learning from both successes and failures. This facilitates continuous improvement and refines future decision-making processes.

25. Adapt to Global Dynamics

Be adaptable and willing to pivot business strategies, such as manufacturing location, in response to evolving global political and social landscapes. This aligns with changing societal expectations and maintains operational viability.

26. Network with Other Leaders

Actively network with peers and other leaders, sharing insights and discussing common challenges. This provides diverse perspectives, helps learn best practices, and combats the isolation of leadership roles.

27. Seek Diverse Knowledge

Proactively seek out and engage with individuals from diverse fields, such as scientists, startup founders, and political figures, for learning. This broadens your perspective and provides insights into emerging trends and different ways of thinking.

28. Be Well-Read

Prioritize being well-read, as it is extremely important for gaining knowledge and broadening your understanding. This habit provides more impact than people often realize.

29. Learn by Doing

Actively participate in hands-on learning experiences, even if outside your comfort zone, such as building an app to understand software. This provides practical understanding and empathy for the work of others, fostering deeper insights.

30. Persevere Daily

Maintain daily perseverance, especially when facing multiple significant challenges like black swan events and recessions. This consistent effort is essential to navigate difficult periods and achieve long-term goals.