The Fast Company Interview: Jeff Immelt

A candid conversation with the CEO of General Electric about leadership, creativity, fear -- and what it's really like to run the world's most influential company The year Jeff Immelt's career almost blew up was 1994. He was vice president and general manager of GE Plastics Americas, and his division was caught in a classic profit squeeze -- the crunch that comes when raw-material costs rise and a company is locked into fixed-price contracts with customers. Instead of making his 20% profit-growth goal, he delivered earnings growth of just 7%. The upshot: Immelt missed his net-income number by $50 million.

At General Electric's annual leadership meeting in Boca Raton, Florida, in January of 1995, Immelt arrived late for dinner each evening and went to bed early -- hoping to avoid a tough talk with his legendary boss, Jack Welch, about his poor performance. But on the last night of the meeting, he felt a hand on his shoulder just as he was rushing off to the elevator and his room. It was Welch.

"Jeff, I'm your biggest fan, but you just had the worst year in the company," Welch said sternly. "Just the worst year. I love you, and I know you can do better. But I'm going to take you out if you can't get it fixed."

"Look," Immelt answered, "if the results aren't where they should be, you won't have to fire me because I'm going to leave on my own."

The story, of course, has a fairy-tale ending. And that's probably why Immelt often tells it. "It was definitely the most painful period of my career," he says. "Even though I came close to being fired, I never considered quitting. I knew the issues were my fault, and I didn't want to let my people down." Besides, he adds, "surviving a failure gives you more self-confidence. Failures are great learning tools -- but they must be kept to a minimum."

Immelt clearly redeemed himself, gaining a crucial promotion in 1997 to president and CEO of GE Medical Systems and winning the race to succeed Welch three years later, at age 45. Welch would have been a tough act to follow under any circumstances, but the timing of Immelt's ascension was particularly bad: He became CEO four days before September 11, 2001. The terrorist attacks, the bursting of the stock-market bubble, and a recession depressed some of GE's key markets. Both revenue and earnings growth slowed, and the stock slumped.

Now, four years into the job, with the company showing much stronger performance, Immelt is stepping out of Welch's shadow and developing a leadership vocabulary of his own. He speaks about creating "growth leaders," holding "dreaming sessions" with customers, developing "imagination breakthrough" teams and projects, and the importance of "simplification" in a big-company environment. And Immelt has won favorable reviews for a new and bold environmental initiative that will double the company's research on clean technologies.

Immelt recently sat down for a talk with Fast Company editor-in-chief John A. Byrne in the CEO's conference room at GE headquarters in Fairfield, Connecticut.

What have you learned so far in the job?

One of the things Jack said early on that I think is totally right is: It's a marathon. It's not a sprint. All these books about the first 90 days are kind of rubbish in many ways. You have to have a plan. You have to stick with it. You have to modify it at times, but every day you've got to get up and play hard. Jack used to see me running around, even after he left, and he'd say to me, "Remember, it's a marathon. Ten years. Fifteen years. You've got to get up every day with a new idea, a new spin, and you've got to bring it in here every day." I always kind of knew that, but until you're right in the middle of it, you never get it. His advice was right. It's the sustained ability to change that really counts.

Have you ever been scared?

Yes. Right after September 11, and during periods of 2002, the world around us was exploding. I never had a fear about the company, but I would say to myself, "My God, what else can happen next?" Because when you run a company the size of GE, sometimes there's collateral damage from an Enron or a WorldCom. There were times when the credit markets were going crazy, and then WorldCom happens, and you wonder, "Holy shit, are people going to lose their confidence in the broad market?"

Do you ever wake up and say, "What am I doing here?"

Never. I'm an optimist. I've always believed the future is going to be better than the past. And I also believe I have a role in that. The great thing about human beings, myself in particular, is that I can change. I can do better. If you can get up every day, stay optimistic, and believe the future is better than the past, those few things get you through a lot of tough times.