CEO of General ElectricNext
- In-Country Power
- International Power
- Military Strength
- Special Skill: Stock-dropper
- Official Title: CEO
- Government: Well-Established Democracy
- Years Left in Office: Until the stockholders turn on him
- Political Classification:
- Education: BA Math, MBA from Harvard
- Age: 66 (born February 19, 1956)
Jeffrey Immelt Facts and Information
- Jeffrey Immelt is currently the chairman of the board and chief executive officer for General Electric
- Immelt has served on the President’s Economic Recovery Advisory Board in 2009 and was appointed as chairman of Obama’s outside panel of economic advisors in 2011
- Immelt was named to Time magazine’s list of the 100 most influential people in the world in 2009
- Despite the chaos of the economic recession, GE has been continuously named one of the most admired companies in terms of respect, leadership, and innovation thanks to Immelt
It’s hard to believe that a man whose company has a 40 percent decline in shareholder value is still considered one of the best chief executives in the world! That’s right; Jeffrey Immelt, CEO of the well-known corporation General Electric, or GE for short, is recognized worldwide for his global leadership both in and out of his company. To see the value of Immelt’s contributions, we must look beyond the numbers and statistics to see how his contributions have kept GE afloat during the recent economic chaos. But first, let’s take a step back and go through a brief rundown of GE to help clarify how Immelt and his decisions affect the global economy.
So what exactly does General Electric do? They must be a huge electricity company, right? Well, that’s partially right. GE was formed back in 1892 by four guys, one being Thomas Edison, as a manufacturer of electric motors and other electric lighting fixtures. However, the company did not truly thrive until 1981 when Jack Welch took over as CEO. At this point, GE transitioned from a modestly successful corporation with few global connections to the thriving multinational conglomerate corporation that is known and respected by nearly all people of today’s society. GE is now a conglomerate corporation, meaning that it annually purchases dozens of firms to feed its ever expanding business segments: currently Energy, Technology, Infrastructure, Capital Finance, and Consumer & Industrial.
GE has transformed from a modest manufacturing facility into a major global powerhouse, but the road to the top has not been easy. GE took a huge hit in 2011 after the Japan Earthquake when six of its nuclear reactors exploded, causing GE stocks to drop 3% overnight. Furthermore, GE has been accused of being a major contributor to air and water pollution. Add in the recession and lack of jobs and GE doesn’t seem to be doing too well. However, the corporation has managed to continue its pattern of rapid expansion despite the recession. They have connections all over the world (Western Europe and the US account for only a small portion of their business), and have taken the initiative to help ease global concerns related to the environment, technology, and education. GE has been consistently ranked as one of the largest and most innovative companies, earning them a great deal of respect in the eyes of the public. Most of these positive impacts began at the turn of the 21st century, thanks to newly-appointed CEO Jeffrey Immelt.
Back in 1982, a little-known Jeffrey Immelt began his career with GE. He became vice president of the Appliance business in 1989, which coincided with the recall of millions of refrigerators due to failed compressors. This was one of the largest recalls in GE history and became Immelt’s first opportunity to showcase his potential for leadership. During the recall period, Immelt would put on a GE technician uniform and stand on top of a forklift as he delivered motivational speeches to workers on the factory floor in Louisville. This was the first time Immelt was thrown into a terrible situation and told to fix it, though certainly not his last. He describes this time at GE Appliances as the time when he “went from being a boy to a man” (September 10, 2001). Immelt left Appliances and moved on to Plastics in 1992, where he managed to convince manufacturers to increase the number of plastic parts used in automobiles yet still miss the division earnings goals by $50 million. Yes, 50 million dollars! How is that possible? According to Immelt, he was on the right path, but he wasn’t moving fast enough to catch up to the ever-changing economy and rising prices. Is a pattern emerging?
During his time with Plastics, Immelt began attracting attention from the CEO at the time, Jack Welch. During a management meeting shortly after his $50 million messup, Welch told him that while he loved Immelt as a person, he would let him go if he did not learn how to get things right. Immelt claims to take this as a positive experience and later said that the conversation made him more valuable to the company because it increased his self-confidence tenfold. Sure enough, this encounter seemed to turn around Immelt’s luck for a while. Immelt was named president and CEO of GE Medical Systems (GEM) in 1997 and quickly turned GEM into the world’s most successful medical-imaging company. Under Immelt’s tenure, operating profits doubled and sales increased 75 percent. During his time with GEM, Immelt was placed on a list of 24 candidates to replace beloved CEO Jack Welch. Between 1994 and 2000, the list of candidates was narrowed down from 24 to 3, leaving Immelt as the youngest of the three finalists by 10 years. Immelt was named as Welch’s successor in 1999 but did not officially take over until 2001.
Immelt’s first week as CEO coincided with the terrorist attacks of 9/11, which sent the economy and GE into a financial tornado that destroyed earnings and stock prices. GE cut its dividend for the first time since the Great Depression, lost its triple-A credit rating, and quickly arranged for a $3 billion investment to get back on their feet. This was the ultimate test for Immelt; many had cast a negative light on him because of GE’s financial problems, and he had to regain the company’s former glory… immediately. He responded by setting four major goals that addressed innovation, diversity, and customer relations, beginning GE’s slow but steady climb up and out of the economic recession.
For the next two years, Immelt enacted numerous changes to the core structure of GE. One of his first moves was to change the way GE appointed managers. He kept managers in one division for a long period of time instead of rotating them through several divisions. This allowed them to see the consequences of their decisions and to see the results of long-term innovations, turning them into specialists within their fields instead of just having lots of general knowledge. He also added additional divisions to the company, including wind power, security, and water filtration. Though these sectors did not immediately add to GE’s profit, they contributed to Immelt’s long-term innovation strategies. It took some time for GE to see tangible results, but the rest of the world eventually caught on to Immelt’s ingenious long-term solutions. GE has been on the upswing ever since.
So what? Some corporate executive saves his own ass by pulling his company out of the recession and we are all supposed to stand up and applaud him as a world leader? No, not exactly. Immelt’s impact goes far beyond the walls of the main GE office in Connecticut. Immelt was one of the first leaders to truly recognize and tackle the problems of the twenty-first century head-on. Immelt has been praised for addressing issues such as the rise of China and India, low growth and inflation, and geopolitical volatility (London’s Financial Times, 2003). He is more concerned with performance share units than the stock market and is a longtime cheerleader for globalization. Welch had left the company with heavy reliance on financial services, but Immelt changed GE’s trajectory to focus once again on manufacturing and high-growth industries, such as China and its energy grid. Others have begun to catch onto Immelt’s forward/long-term thinking, including President Obama. After serving on Obama’s Economic Recovery Advisory Board for two years, Immelt was appointed the chairman of his outside panel of economic advisors. After all the disasters he has been forced to fix throughout his career, it is clear that the man is the champion of economic recovery.
Ok, so why does Immelt really matter? He takes a very different approach to leadership than most CEO’s. Instead of zeroing in on increasing profit, Immelt focuses on less tangible, but perhaps more important results. Immelt wants to help to correct realistic issues of the 21st century, whether or not the results look good on paper. He is the type of person to call up a customer to ask how their day is going, not just to yank more money out of their pockets. Most importantly, Immelt is the one to look outside himself and outside of his company to see how his services can benefit the world, instead of searching for new and unforeseen ways to pad his wallet. While GE may not seem like the ideal company just from looking at the stock market charts, Immelt has led the company to new ways of thinking that will be much more beneficial in the long term. Immelt’s leadership style has caught on and seems to be spreading across the globe. Meanwhile, Immelt will continue as CEO of GE until he retires or the stockholders turn on him, since his position has been abolished.
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