It is the first time I’ve listened to Jeff Immelt (Immelt is the 9th chairman/CEO of GE, a job he has held since 2001) speaking live. He was talking 10ft away from me and I have a closed up view of how the confident CEO of this big and one of the most prestige firm talked about strategy and leadership in times of global crisis. He said candidly that he had only taken 5 days off (including weekends) the last 3 years.
He was speaking at the London Business School's sixth annual Global Leadership Summit this morning, a private event featuring the most prestigious group of business leaders to debate and reflect on the global downturn and how to emerge stronger once the recession is over, which there are plenty of signs that are already happening.
It is not easy taking over a job from Jack Welch, one of the most celebrated CEOs. Those were big shoes and he is filling them nicely. Talking how things could be difficult, he shared a story when he just graduated from B-School, interest rate was at almost 20% and at the end all things worked out ok. His advice to other CEOs, here are four most important things to do in order to lead a company out of a crisis likes this:
- How to manage business cycles?
- What is a point of view (about the reset)?
- How do you think about renewal?
- What does it mean for business leadership in the 21st century?
The first one is how to manage in a crisis. His answer was simple, first one is preserving cash and making sure absolute balance sheet strength. Second is moving with speed and quickly taking advantage of the opportunities that exist – where does the opportunities exist and how do we access that. GE took more orders in the latest air show that the past by selling to new customers. Third, keep executing on a long term strategy. And fourth, communicate constantly inside and outside the company. This is the best way to get through the crisis.
The second thing is having a point of view. What does that mean? According to Immelt,” It is more than managing your way through. Every few years, you need a reset.” This is an interesting one. Most company lacks perspectives, or different perspectives of how different future might unfold before they develop a point of view. Without that, the company lacks direction. It is truly important fro every board to have a point of view of the future, not just senior managers. His example was US Consumer the last 25 years consumed 6% of what they earned. Now we’re moving from debtors to savers.
He used the word “ big sized themes” to refer to what form a point of view. It is more than just managing your way through. Every few years, you need a “reset.” GE faces the cycle, they’ve made the choices, 2008 earnings was the third highest in the history of GE. In his words< “Look for the simple truths in these point of views, use them to help your organization to lead in a reset world.” For GE, the two big themes are 1/ clean energy and 2/affordable healthcare.
The last one is on business leadership in the 21st century. I have some thoughts to add so that will be another post. Will catch up with him during coffee as I have a few questions for him.