HOT SEAT-Hard won Lessons in Challenging Times by Jeff Immelt

Former CEO of General Electric Jeff Immelt penned "Hot Seat: The Startup CEO Guidebook." This book, written in the first person by Immelt, recounts his time at the helm of General Electric, one of the largest and most complicated corporations in the world. He thinks back on his time as CEO and the difficulties he encountered, such as the Great Recession and the growing popularity of alternative energy sources.

His term was marked by turbulence and catastrophe, including 9/11 (which had a major impact on the economy and on GE's aviation and financing industries), the global financial crisis of 2008, and the meltdown of nuclear reactors developed by GE at Fukushima in 2011. It was difficult for Immelt to adapt GE to the digital age, and the company's stock performance did not reflect his efforts. (GE Won in the marketplace but lost in the stock market)

Jeff Immelt writes candidly about his tenure and the lessons he learned in "Hot Seat: Hard-won Lessons in Challenging Times.". Having smaller P&Ls and more independence among business leaders would have enabled the company to be more flexible, independent, and creative. Under his leadership, the India story was an important part of GE's overall strategy, and GE's investment in India had a profound impact on its capabilities.

Immelt wanted to expand GE's global reach and to be closer to customers. Jeff Immelt also wanted to make the company more diverse in terms of gender and ethnicity. In 2016, when he left the company, GE made progress along these fronts but not as much as was planned because of the volatility and crisis that Immelt had to deal with. Jeff acknowledges the era he led in, was very different from the era of Jack Welch, as the world was very calm while Welch led and he led in a world marked by terrorist attacks, financial crisis, and geopolitical volatility.

Despite the challenges, Immelt also led GE to new heights as well. He played a major role to expand GE's portfolio in renewable energy and other technological advances. Under his leadership, GE achieved significant milestones, including the launch of numerous digital and renewable energy projects, and a focus on building the company's industrial internet and advanced manufacturing capabilities.

Leaders are constantly learning and developing themselves. They invest in growth, both for themselves and for the organization. They think in systems, considering the interconnectedness of different aspects of the organization. They have the ability to create a personal touch in large companies and navigate the complexities of international operations. They are skilled at problem-solving by managing complexity and bringing people together. They are transparent and accountable, and approach challenges with a sense of hope and optimism

In conclusion, throughout his time as CEO of GE, Jeff Immelt was under intense scrutiny and criticism owing to weak economic and market conditions and GE stock performance, but he successfully guided the firm through this challenging time and made several constructive reforms.?

Good leaders don’t point fingers or pass on blame and try to figure out a way to make progress; so be comfortable making decisions but don’t make decisions with one person behind closed doors; do it in front of 20 or 30 people so they can see how you think, they know what your purpose is. You may get blamed later for not listening, but it’s worth it in terms of gaining support. You need to have imagination and courage to invest in the future; be a good communicator; always show people the best version of themselves that they can be and lastly, persevere; you will get punched in the face a couple of times, you just have to keep going.

Important points from the Book.

1. It is difficult to drive change when everyone feels that everything is perfect.
2. Every CEO's relationship with a predecessor is complicated. It is like the CEO Relationship with a mother-in-law. We both loved in different ways:
3. GE Won in the marketplace but lost in the stock market.
4. Jack Welch was admired for his ability to connect with people and his informal and accessible leadership style. Jack Welch was more focused on management techniques like Six Sigma to eliminate mistakes, rather than innovation.GE's value rose by 4000% under Welch's leadership, but it was during a period of consistent economic expansion. Financial services, rather than innovation, were the main source of profit growth for GE under Welch.
5. When Jeff Immelt took over as CEO, he wanted to express optimism and pride in the company while signaling changes. He was aware that replacing a famous leader like Welch can be challenging and wanted to avoid a culture of blame and lack of accountability. Jeff Immelt wanted to be a great boss and establish a will to win at the company.
6. Jeff Immelt wanted to revive innovation and make it a core competitive advantage of GE.
7. He also addressed issues such as the Power market being in a bubble, insurance, and pension earnings, and the need to focus on technology and acquisition.-GE capital was a huge enterprise that provided credit services to many industries and GE was the world's largest lessor.
8. If the back-to-back challenges of 9/11 and the Enron debacle had taught me (Jeff)anything, it was that in a crisis, you could bring to bear only the tools you have in your toolbox.
9. Don't complain -Fix It !!! Don't embarrass one of your teammates. Treat people with respect, no matter where they came from or how much money they had. You either make it for yourself, or you don't.no one will do it for you. My father's favorite saying: fair is fair. These fundamentals later color my management style. If you have something to say, speak up even when difficult.
10. Work -Hard-play -complex culture because that approach gave us a competitive advantage.
11. Real leaders make timely decisions and then stand behind them, even when criticized. Being a good manager was not a popularity contest. It demanded bravery and the willingness to be accountable.?
12. Jack Welch Taught me ( how to lead an enterprise at scale. Jack created a culture in which everybody counted, and each voice mattered. He expected GE Managers out of their offices and known to all.?
13. Lean-to takes the heat. Once you have pushed through the problem that initially seemed unfixable, the obstacles that come afterward don't hit you quite hard.
14. In Big companies, hundreds of people can be involved in decisions. When the decision works, thousands take credit. When the decision fails or faces a challenge, most grumble. This idea is as accurate in the boardroom as it is on the assembly line. What was impressive and instructive about the compressor crisis was that Jack owned his decisions. he was solid in the face of second guessers, and he was willing to sacrifice short.
15. To speed up the growth, I(the author) had three options: expand the market for our existing products globally, offer new and different products in the imaging space, or acquire adjacent businesses that would help us push into new areas. I decided to do all three.?
16. You meet only a handful of leaders who have the trifecta of innovating, executing, and developing talent in your career.
17. Jack Welch's Final advice: When you go home at night, you are tired or want to see your family. It is not because your work is done. your briefcase is never empty.
18. Leaders fund technology & engineers make great products, and if you do both right, everybody thrives. Engineers and Salespeople were mutually accountable.
19. Three different types of technology: Horizontal/Vertical/ and exponential. Vertical technologies were in the swim lanes of each of our businesses. Whatever the following product, next improvement, or next problem we needed to solve in aviation or transportation. Horizontal Technologies lifted all boats across the company, informing and improving our products and processes. It behooved the GRC to pay attention to exponential technologies-developments such as artificial intelligence, Virtual Reality, and nanotech. Exponential technologies are called exponential because they expand in capabilities with exceeding. Good leaders can hold two truths simultaneously in a crisis: they prepare for the worst while taking big swings to set the table for needed improvements.
20. Don't Fall in Love with an Idea
21. Pivot to Grow-GE'SAmersham acquisition surprised many people. The company was high-tech, global, and expensive. When the deal was completed in April 2004, we paid $9.8 billion in an unusual equity swap—the largest all-share transaction ever to occur in Britain based on shares not quoted on the UK stock market.
22. When markets mature, the best businesses pivot into new segments. GE had failed to do that in its Plastics division, sitting on the sidelines as its competitors—Dow, DuPont, and Monsanto—responded to stagnating markets by moving into the agriculture business. But in Healthcare, we did it right. Our Amersham acquisition wasn't a shiny new bauble. It enabled us to add complementary capability—what I call moving strength to strength—giving a solid core business a new leg of growth in an important market. Amersham would become more valuable than the business it bolted onto in subsequent years, proving that you have to dare to invest in what's next?
23. Don't Be Afraid to Act While investing to grow is great fun, I also had to do something harder: clean up existing messes. GE's most enormous mess was insurance., it was that we needed to exit insurance. It was the most significant business in GE Capital, accounting for 40 percent of the division's earnings (and probably 20 percent of its earnings overall). But it was an over-levered mess.
24. Good leaders can hold two truths simultaneously in a crisis: they prepare for the worst while taking big swings to set the table for needed improvements.
25. My professors helped me understand that it was OK—necessary, even—not to know how to solve a problem right away. I suppose that training helped me embrace the discipline known as "systems thinking." Systems thinking can sound a little abstract at first, but it's worth the effort it requires. It analyzes your markets' complexity and organization by paying attention to how the parts interrelate.?
26. Together we launched something called Imagination Breakthroughs, or IBs. In just six weeks, each GE business had to develop two or three ideas for new revenue sources—whether they were products, applications, geographic areas, or previously unserved customers. Within five years, each business had to generate substantial growth. Soon, the Imagination Breakthrough proposals started to come in,?
27. I knew that in a large company, ideas were particularly vulnerable when in a nascent stage. I hoped that the IB program would help the best new ideas survive. When people came in to champion their proposals, I told them I didn't want long-winded PowerPoint presentations. I wanted a summary and a willingness to answer my questions. Started with three: What is the most significant internal barrier you face? What is the most significant external barrier you face? What is the revenue flow?
28. My motivations were many. First, I wanted to grow the company. Second, I was always searching for ways to make this 120-plus-year-old company look and act younger, and I knew from talking to my seventeen-year-old daughter and her friends that teens and millennials cared more about the planet than their fuddy-duddy parents ever had.?
29. The Digital Future: We knew that data-driven service was a way to grow our service business. But if we failed to act, it would become an existential threat. If GE didn't do it, someone else would.
30. Like most legacy companies, GE had outsourced our digital capability twenty years before. Enterprise tech companies like Oracle told us what to do, and our BPO, or business process outsourcing, partners in India helped us execute. Our IT leaders weren't technologists; they were program managers. In theory, it was OK to outsource administrative software, but that left us with a talent gap for artificial intelligence and data analytics. These two things would be the guts of our products and services in the future.
31. There were three areas where we knew data could help our customers. First, data would help optimize the performance of each machine—making GE's jet engines, say, burn less fuel during landing. Second, data-crunching software would allow GE to predict when a machine would need repairs, helping minimize costly downtime by identifying early warning signals before a breakdown. And third, GE software could enhance the overall performance of any machine operating system—a railroad like Burlington Northern, say, or an oil field or a wind farm. Building GE Digital took some time,?
32. There are two ways companies can pivot into new markets and remain relevant: by buying existing businesses or building them from scratch.?
33. Tech start-ups define success, especially in the first decade, on how well they acquire customers, build capability, and penetrate their emerging markets. That wasn't how GE had traditionally defined success. We were about increasing revenues and making our numbers. Analyzed by that metric, this tiny start-up within a big parent company was seen by many as a disappointment.?
34. Transforming a big legacy company requires persistence. It is difficult to please everyone.In legacy companies, new leaders can't change everything. Sometimes you have to run your leg of the race, by which I mean taking something you didn't start and making it better. In that vein, I had hoped that the next generation of GE leaders would make GE's digital strategy better, not shut it down. By choosing not to lead, GE has become less relevant in what is inarguably a digital future.?
35. The next decade will be about integrating physical assets with digital technologies to create new pockets of value for industrial companies. The coronavirus pandemic will only accelerate that trend.
36. I believed that GE's success depended on fostering a culture of mutual accountability. It wasn't enough for me to meet one-on-one with senior leaders. I wanted GE people to have a horizontal bond—to connect to (and root for) one another.
37. Retaining the Best- I knew that the higher you rise within the company, the more difficult it is to see what's going on beneath you. People don't like to tell their boss terrible news. They don't like to tell their boss terrible news & don't want to complain or look bad. They don't want to risk seeming stupid by asking what may be perceived to be ignorant questions. Especially at big Companies, CEOs Can easily live in a bubble. The best managers figure out to draw the truth out of those who report to them.
38. Building a solid connection with the people you work with is about two things: time and truth. You have to spend the time, and you have to tell the truth. Dedicating a weekend to each leader's development demonstrated my commitment to them, and I made a point of offering very detailed evaluations and career guidance. I could engage with them with specificity and thoughtfulness. The best coaching sessions are equal parts constructive criticism and advocacy. That is what I strived to deliver.
39. No one can manage three hundred thousand people all by themselves. My goal was to manage the people who managed our people. I often told our top officers: "If you value integrity, performance, and change, your people will, too. If you have ambition, if you're able to create excellence, if you can do four things—Imagine. Solve. Build. Lead. —then this is going to be a great company." My point was unwavering: it starts with you.
40. When you acquire new businesses by the dozen, it is essential to get every employee, new and old, to share a broad vision of where the company is going and how it plans to get there. Similarly, having Crotonville as a constant provides cultural continuity, even across international borders, when you do business worldwide.
41. I've always believed that merit has no gender, race, or sexual orientation. Don't listen to those who say the goals of promoting diversity and valuing merit aren't in sync. They are, in my experience, and the best leaders work hard at both.
42. Today's most successful conglomerates have a digital foundation—Alphabet, Amazon.
43. Private Equity: A Modern Conglomerate?? Private-equity firms, which invest directly in private companies or buy out public companies and take them private, have been around for forty or so years, but in the last twenty, they've become dominant. While public companies have dropped significantly in recent years, private equity has flourished. Today, private equity has nearly $2 trillion under management. Legacy companies must compete with these private funds for capital and talent.
44. That is one of the secrets of private equity. Investors often generate great returns even when their businesses don’t become winners. Private equity was masterful at timing and financial restructuring. private equity gives CEOs of public companies an alternative to continuing to run troubled businesses.
45. The best leaders are able to see new systems and build businesses around them. This is what Amazon does with Amazon Web Services, its on-demand cloud computing platform, and what Google has done with Alphabet. The idea is to take a unit that you’ve created to make your conglomerate run better and then ask the question: “Could you sell it as a service?”
46. As a CEO of a conglomerate, then, you can’t be a micromanager, because it will drive these people away. You have to relax control, empowering each business leader to succeed in his or her market. This requires that you trust them. For me, the key to trusting any executive is believing that they are masters of their domain. But there are only a handful of leaders in any company who are true systems leaders. These are people who see what is next, without losing sight of what is most important today; they see the long-term while still delivering short-term results.
47. We set out to clarify responsibility, empower frontline decision-makers, break down organizational boundaries, and delegate capability throughout the company. For employees, we wanted simplification to mean more engagement; for customers, higher satisfaction.
48. “A good manager of a bad layer is equally problematic to a bad manager at any layer.”
49. What does that mean inside a conglomerate? It means more meetings, more committees, more processes, more task forces, more scorecards, and more oversight and reporting structures. Any time there is a problem or an opportunity, it seems, another layer of bureaucracy is born, and once it exists, it’s difficult to remove. Why should we care? Because all that slows down decision-making, suffocates innovation and creates a discontented workforce.
50. Morieux and his co-writer Peter Tollman layout in their 2014 book, Six Simple Rules, employees of overly complicated organizations feel like they are stuck in a labyrinth. They lose meaning and satisfaction as they become burned out and stressed by the overwhelming requirements of servicing the bureaucracy.Of their six rules, the first three are about making it easier for people to use their judgment and take ownership: (1) understand what your people do; (2) reinforce integrators—the people who get tasks done cross-functionally—and empower them with resources and authority; and (3) increase the total quantity of power available—when creating new roles, empower people without taking power from others. The second three rules were about making sure that this enhanced autonomy was used to face complexity and improve performance: (4) increase reciprocity by setting clear objectives that stimulate mutual interest to cooperate; (5) extend the shadow of the future, by which they meant: expose people to the consequences of their actions, and (6) reward those who cooperate and blame those who don’t.
51. Even good ideas rarely seem to work right the first time. But that’s how you learn: facing failure, absorbing fear, making and owning your decisions, and keeping your cool as the story plays out.
52. Sometimes you must act instead of dithering. If you wait for the perfect moment, when everything is crystal clear, you will often wait forever.
53. When a company is in a tough cycle, leaders need to motivate their people.
54. Truth = Facts + Context. As leaders, we must remember that the world turns. Be humble and empathetic when times are good. And learn to recognize the difference between tailwind and good management. If someone impresses you when they are benefiting from good markets, you still don’t know much. When they thrive in a shit show, you have a gem. Leaders must be willing to make decisions in a crowded room, out in the open,
55. There are four types of people. One type is always switched on and focused in meetings, equally good at making relevant points and listening to others. The second type talks too much, drowning the room in detail and leaving little space for opposing views. The third type prefers to hang back but has lots of valuable insights—they need to be encouraged to contribute. fourth group I call simply silent and smoldering. They believe they are smarter than others, but they don’t want to dirty their hands by debating. They become the “unnamed source.” If you worry about them, you will never get anything done.
56. You need intelligent people to serve as your guardrails, but in the end, it is your job to act. There is no simple rule for when to listen and when to act. But I do know this: in companies large and small, you must get rid of people you don’t trust, even those who are unusually talented.
57. Most leaders will not be perfect or lucky as they make hard decisions without a map to guide them. But especially in a crisis, if they insist on waiting until the skies clear, they will never do anything at all. Inaction is bad leadership, but it can feel safer than action because to act is to open yourself up to criticism.
58. leaders must be able to do contrary things well—to master conflicting principles at the same time. They must make their companies be at once big and fast, global and local, digital and industrial. They must manage in a way that is both competitive and empathetic. They must think short-term and long-term. They must deal with ambiguity.
59. Your Career is going to have bad days and good days, but believe it or not, you need the bad days,” I said. “They make you a better leader.
60. ”When you are on top, it is easy to be long on friends. When you hit bottom, there are a select few who reach out.

Hot Seat is available on Amazon (For the full book read)

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