The Fast Company Interview: Jeff Immelt

If you had to carve up how much time you spend with customers, on people development, and other things, what would that pie look like?

You can't delegate growth or customer satisfaction. I'm spending four or five days a month with customers. Twice every month, I do town-hall meetings with several hundred customers to share ideas on GE's direction and listen to their thoughts on what we can do better. And we're doing what I call dreaming sessions with key customer groups, trying to think about where our business and their business will be in 5 or 10 years. I'm probably spending 30% of the time on people, teaching and coaching. I'm using 10% of my time on governance, working with the board, meeting with investors. The rest would be time spent on the plumbing of the company, working on operating reviews and strategy sessions.

Describe a dreaming session.

We had the railroad CEOs in with their operating people. We spent half a day, grounding ourselves on where the industry is, where we are, what their trends are, and then said, "Okay, here are some things to think about: higher fuel, more West-East shipments because of imports from China." We would have four or five boundary conditions. And then we'll ask, "If you had $200 million to $400 million to spend on R&D at GE, how would you prioritize it?"

So you're actually asking your customers to help you decide how to spend your R&D money?

Exactly. Because at the end of the day, particularly in the industries that we're in, like health care, rail, and aviation, our interests are aligned with our customers. As we develop a more fuel-efficient locomotive engine, they benefit. It helps us prioritize between rail movement planning, which is basically information technology that helps them get more out of their assets, and fuel efficiency. And if I show up, we'll get six CEOs to show up. So you don't have to cut through anything else if we all do it together. We can make some high-level trade-offs that way.

How do you get customers to not limit their dreams? The general rule on asking customers what they want is they think only in short-term fixes and solutions to problems they're grappling with today.

That's really true. I've spent my lifetime working with customers, and I love customers. I get great insight from them -- but I would never let them set our strategy for us. But by talking to them, I can put it in my own language. Customers always pay our bills. But they will never pick our people or set our strategies.

What's the worst thing you've heard a customer say about GE since you've been CEO?

I've heard a lot of really bad things. We didn't deliver on time, blah, blah, blah. But one of the things that is toughest for us [to hear] is we're just too inflexible. We're too legalistic. One of the things I worry about at a company like GE is that we have to have unbelievable standards of compliance. But we have to find a way to do that without being so legalistic. That is a trick and a real challenge. The thing customers say that makes me most upset with our team is that we are just too inflexible.

Is that also a result of size and the complexity that comes with scale?

It's size. It's arrogance. It's not listening hard enough. There are probably six or seven different things. I'm constantly coming back and saying, "Look, we're going to change our measurements and the way we compensate people." But ultimately, it's attitude. We've got to have different leaders, different people who can say we will find ways to do this. When I talk about inflexibility, I view it as an easy thing to change. It's a lot about attitude.

What's the idea behind imagination breakthroughs?

We had to have some way to pull ideas out of the pile, make sure they were funded, and really try to redefine what it meant to innovate in a big company. We started two years ago. We tested the time-honored tradition of pulling things out of the pile, putting good people on them, and finding ways to share ideas. In the beginning, we said, "Let's start with ideas that could generate more than $100 million of incremental revenue." We had 30 ideas. It was almost nothing for a company of our size. About 20 of them turned out to be good projects, from a dual card for consumer finance to a hybrid locomotive for GE railcars. What's magical about them? We picked who would lead them, and every penny is funded. Our leaders know they have to pony up. So I now have 80 projects inside the company that are fully funded with the best people we can find. The big difference is that the business leaders have no choices here. Nobody is allowed not to play. Nobody can say, "I'm going to sit this one out." That's the way you drive change.