Five Crisis Lessons From GE
In an interview with former GE chairman, Jeffrey Immelt, we discussed the ways a leader must prepare the company to meet the challenges of global volatility.
Talk to your people openly about the crisis
“For anyone who thinks it’s easy, these are hard jobs. But you also have this sense that no matter what happens we can get better.”
- I joined GE four days before 9/11 and the impact on the company was devastating, as it was for everyone.
- Speaking openly about challenges inspired the team to dwell on the future.
- People needed to know what I was going through, too. It helped them to understand why they spend the hours and sacrifice for the job.
- This is no longer the suffering in silence era. Communicate during a crisis, just when people feel like hiding, and they’ll be more open about accepting difficult solutions.
- Relate on a deeply personal level and your team will bring their best thinking.
Customers fade away. Markets are forever
“I had this feeling we were still constructed for an American-centric economy and I realized we had to get more global.”
- When I took over GE the product lines were 80% consumed in the United States. Today that’s down to 20%.
- Changing market focus can be the most challenging of transformations, which is why we faced it head-on by making it the cornerstone of GE’s strategy.
- Markets are no longer static. I learned running GE that business has no shelf life, and what was right ten years ago may now be obsolete.
- You are always planning for the next disruption, and that means looking at new markets all the time.
Don’t ignore competition, let it inspire
“We don’t want to be Microsoft or Google, but we’re inspired to be better because of them.”
- Speed is stealth — just as with a fighter jet — it allows companies to move into a new sector.
- It also means that one day you will look up to find you are facing companies you never heard of before in the market.
- I recognized we had a choice, employees already who the ‘hot’ company is and may even hope to work there. But I can’t afford to lose that kind of talent.
- The proper response is to let them know you are going to move mountains to be as good or better.
Peak performance is unattainable without diversity
“If you can bring it, if you’ve got merit, if you’re winning, you’re going to get promoted.
- As CEO of GE, I ran a meritocracy.
- In all my messaging, I strive to send the signal that talent and performance are the only demographics that interest me.
- Not everyone will make it to the CEO level, but they need to know that anyone can be CEO.
- I firmly believe today’s genius isn’t likely to come from the same gene pool as tomorrow’s.
- When the organization knows you operate from a foundation of total fairness and openness, everyone can win.
Hard problems get solved, good people recover
“There’s no doubt in my mind, when I talk to other leaders, you haven’t led until you’ve been through a ‘flying close to the sun’ tail risk.
- By leading through a downturn, you learn how to survive ‘tail risk’.
- That gives you the confidence to move forward and make bold decisions about the future.
- A secondary benefit is that people act and think like a team because they shared a defining experience.
- When I think about 9/11 and the financial crisis, and both of our businesses took a direct hit from these events, we had no choice but to quickly re-engineer the company for a global and digital transformation.
- The fact is that tough times go away eventually, but the talent stays with you.