NY Times, 4 Dec 2010
Good leadership is in part knowing when to pull rank, says General Electric CEO Jeffrey Immelt. About four or five times a year it's important to exert your authority and force everyone back on track, he says. "If you do it 10 times, nobody wants to work for you. If you do it zero times, you have anarchy," Immelt says.
TO train its future leaders, General Electric has rising young stars study and visit an array of different organizations, from Google to West Point.
What can managers at the 132-year-old industrial giant learn from Google? A corporate mind-set that prizes “constant entrepreneurship,” says Jeffrey R. Immelt, G.E.’s chairman and chief executive, during an interview at his corporate headquarters in Fairfield, Conn.
And what wisdom is on tap at the United States Military Academy? “Adaptability” and “resiliency” amid uncertainty, says Mr. Immelt — skills as vital to surviving in business as they are on the battlefield.
Strategies are useful, he says, but only if they can quickly adjust to nasty real-world surprises. “In the words of the great philosopher Mike Tyson,” Mr. Immelt says, smiling, “everybody has a plan till they get punched in the mouth.”
“The underlying DNA of G.E., going back a century, has been to invest for growth in its technology base,” says Noel Tichy, a professor at the University of Michigan business school who once ran G.E.’s management school in Crotonville, N.Y. “So by increasing R.& D. spending and with investments in manufacturing, Jeff Immelt is going ‘back to the future’ at G.E.”
ABOUT 1,000 miles from corporate headquarters, inside a gleaming new plant that is the result of a $100 million, three-year investment, G.E.’s back-to-basics strategy is on display.
For each job at the factory, there are about 30 applicants. The payroll has more than doubled this year, to 220, and is on its way to 450 by 2012. Everyone dresses in blue short-sleeve shirts with a G.E. logo and dark pants. Production is organized around the concept of “high-performance work teams,” typically six to 12 workers.
It’s a bottom-up approach that shuns hierarchy, and places most of the responsibility for continuous improvement on the teams. An egalitarian ethos is reflected in the job titles. The boss, Jeanne Edwards, is the “plant leader.” Line workers are called “production associates.” There are no supervisors here, only “leaders” and “coaches.” There aren’t many of those anyway — all but 29 workers are hourly employees, and production associates start at about $35,000 a year.
The team approach seems to be working. Workers and coaches steadily look for ways to tweak the production process for greater efficiency. Since production began last year, the manufacturing “cycle time” — from cutting carbon-fiber fabric to shipping a finished part — has been reduced by 80 percent, says Antroine Townes, 27, an engineer who guides process-improvement efforts.
Immelt says his broadest responsibility at G.E. is to “drive change and develop people.” Any executive who wants to change things, he says, should be guided by “a point of view about what’s going on in the world, and you invest around that point of view.”
Mr. Immelt also sees himself as the champion of what he calls “large-scale entrepreneurship” at G.E. By that, he means identifying long-term market shifts — “what’s next,” he says — and then marshaling the company’s research, manufacturing and marketing resources to capitalize on the opportunity. He firmly believes that corporate size, when focused, can be a crucial advantage in the high-tech industrial markets where G.E. competes.
“It’s about using the scale of G.E., the majesty of the company, to drive growth and change,” he says.
Mr. Immelt’s leadership style, according to colleagues and advisers, is a blend of analysis, encouragement, cajoling and sometimes orders by decree.
Relaxed and affable, he is routinely described as “comfortable in his own skin.” In his autobiography, Mr. Welch wrote that he selected Mr. Immelt as his successor because “I felt Jeff had the perfect blend of intelligence and edge and epitomized the trait that’s so important to me — he was really comfortable in his own skin.”
To find new ideas, Mr. Immelt spends much of his time traveling and talking to customers, industry partners, government officials and analysts.
Leadership by fiat when done in moderation, Mr. Immelt says, can drive change and set a course. “I think that if you run a big company, you’ve got to four or five times a year, just say, ‘Hey team, look, here’s where we’re going,’ ” he says. “If you do it 10 times, nobody wants to work for you. If you do it zero times, you have anarchy.”
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