Leaders understand the Role of Luck...By Jeff Immelt, NEA...

Leaders understand the Role of Luck...By Jeff Immelt, NEA...

The COVID crisis has been very difficult and seems to be going on forever. It is giving everyone a chance to develop their own “crisis philosophy.” Some say that crisis reveals character; others say that crisis reveals business model. These are both true. But few want to admit that crisis really reveals luck, both good and bad.

Fortune matters in business. It is easy to talk about controlling your destiny when you have the benefit of the tailwind. But control is hard to come by when the tide is against you. 

Think about the impact COVID has on the way business is conducted. Because of the need to avoid physical contact, digital video tools are booming while commercial aviation is getting crushed. The market cap of Zoom is $140B, up five-fold in the last year. Meanwhile, the aviation sector stocks (airlines and equipment manufacturers) are down 60% +. In fact, Zoom is worth more than all the airlines combined.

Is Zoom five-times better managed than Delta? It is a great idea and company… but I don’t think so. In fact, the U.S. aviation industry has been a superior performer for the last 20 years. The airlines had record profits and were well run. The aviation supply chain has dominated the world. The sector has produced major advancements in manufacturing technology, material science and digitization; this has benefited every part of the economy. And aviation creates lots of valuable jobs.

This terrible pandemic – in addition to the toll on human life, employment, and economics – exposes the role that fortune plays on companies, economies, and careers. It is unfair; an average employee in tech can get rich, while a star player in aviation has to consider finding a new job. As leaders, it is good to remember our responsibilities during good and bad cycles.

For government leaders, your job is to preserve competitive industries for the long term. The government’s Paycheck Protection Program (PPP) was a perfect way to help small businesses weather this crisis. Beyond that, the government should help sectors that are competitive and essential, but “unlucky.” Take aviation again. These companies were very competitive before the crisis and will be a part of an economic rebound. If politicians want a manufacturing renaissance, it starts here. 

For the fortunate, take advantage of the crisis to reinforce your purpose. The ability of big pharma to create a vaccine in record time reminds us of their incredible innovative power. Many have criticized this industry for high drug pricing and low availability. Now, it is the solution to a global problem. Similarly, Walmart has reinforced its massive strength to keep supply chains open for basic needs. It has often been criticized for competing with local merchants, but it has been a source of strength in the pandemic.

For leaders who are blessed with good luck, stay humble and empathetic. I recently ran into a leader from GE’s former appliances business. This business is booming as more people are staying at home. But they were very clear-eyed. “We know what it feels like when the world turns.” And then they told me how badly they felt for the people in Aviation. Careers are built on good and bad days. On the bad days, you tap into the optimism that was stored in the good days. And bad days make the good days feel better. Most tech companies have yet to see a “gut-wrenching” cycle, but they will. This is when culture is really tested. Do you hang together or break apart? You are never as smart as they say you are on the best day; or as bad as you feel on the worst. The pandemic has given an unexpected boost to digital platforms. This is a gift; use it wisely.

If you are in a moment of bad fortune, don’t lose your nerve. A decade ago, the banks were our enemy. Now they are a source of strength. These are the same companies, most under the same leaders. But they kept improving in the bad days, improving their financial strength, technology, and control. Most played for the long term. We have had to worry about a lot during the pandemic, but our financial system is strong. However, we need to face facts. Digital platforms are winning. If you are a legacy company that has been fighting transformation, it is time to change.

Know the difference between good management and tailwind. You really don’t know anything about people when times are good. Growth hides so many sins. But when you see someone lend during a bad cycle, you know that you have a “gem.”

I partnered with a generation of leaders who grew up in India. Everything in their local economy was tough, so they took nothing for granted. As a result, they flourished in stable markets around the world. Resiliency and perseverance are built in the toughest days. When you are building a team, give your “best players” the toughest jobs early in their careers. That develops the grit that is required to lead.

In all days, maintain your friendships. I had a lot of terrific colleagues when I was a CEO; many became great friends. When you are on top, it is easy to belong on friends. When you hit bottom, there are a select few who reach out. For me, those standouts included American Express’ Ken Chenault, BNSF’s Matt Rose, Delta Airlines’ Richard Anderson, and especially Cisco’s John Chambers. Everybody should be lucky enough to have Chambers as a friend. He is brilliant and empathetic, an unbeatable combination. You have no idea how a well-timed phone call means when people are low. John was always the first to call. He embedded in Cisco a culture of empathy. As a result, they were a trusted partner. You develop trust by being there when it is inconvenient or when your friend is unpopular. 

COVID reminds us once again about volatility, risk, cycles…and luck. You can’t control it. You can control yourself. Stay empathetic when you are on top; be optimistic when you are on the bottom. Know those good leaders are made in the worst days. Be the best friend to those who are struggling. It may take a few years to get out of this terrible pandemic. But we will. Make sure you come out a better person, a better leader.