Customer Reviews

Jeff Immelt and the New GE Way: Innovation, Transformation and Winning in the 21st Century

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"Not once, Immelt says, did he question whether he was prepared and able to lead GE."

"Jeff Immelt and the New GE Way: Innovation, Transformation, and Winning in the 21st Century" by David Magee is the latest GE book on the seven to eight years since Jeff Immelt took over from Jack Welch as the CEO of one of the most admired companies in the world. Days after he was in position, there came 9/11; and his job has never been easy from the beginning. David Magee put the life of Jeff Immelt into this book.

Contents:

[Contents of the book will be very brief because in the 233 pages book (excluding appendices and references); each chapter has, on average, only 14-16 pages.]

Chapter 1: Following a Leader

The first chapter is about Jeff Immelt's life in college and how he began his career life at GE. David Magee also wrote on Jeff Immelt's character since he was a child.

Chapter 2: Confidently Seize Opportunity

This chapter is on his career progress in GE from Plastics to Appliance onto becoming a candidate of CEO and finally took it.

Chapter 3: Strength in Crisis

After Jeff Immelt took the role as a CEO, 9/11 came and he faced tremendous task of leading GE through tough time. Moreover, the Enron case did not help GE in the stock market.

Chapter 4: Appearances can be Deceiving

This chapter focuses on how GE took over an, then, unattractive wind power business and made it thrive.

Chapter 5: Understand Context

GE experienced a bad times in the stock market in the early 2000s and David Magee told us how Immelt dealt with it. Immelt's personal strategy for overcoming tough times includes:

- Commit to learn every day

- Work hard with passion

- Give people a reason to trust

- Have confidence

- Be an optimist

Chapter 6: Cultivate Big Ideas

This chapter is on how Jeff Immelt focuses on innovation. Unlike his predecessor, Jack Welch, Jeff Immelt emphasises more on science and technology for the new businesses.

Chapter 7: Invest in Innovation

Jeff Immelt has created new tools to foster innovation in GE through enhanced laboratories, among other things.

Chapter 8: Use Your Ecomagination

Jeff Immelt has geared GE towards environmentally friendly businesses. Wind and solar energy are obvious examples. There are also new innovation in pipeline such as Organic LEDs and Smart Electric Grid.

Chapter 9: Maintain Core Values

GE's core values have not changed; Integrity, Performance, and Change. David Magee wrote on how Jeff Immelt has zero tolerance towards integrity violation, how he and GE are still committed to performance as ever, and how change is always encouraged.

Chapter 10: Make Growth a Process

Like his predecessors, Jeff Immelt always focuses on growth and develops growth leaders to develop the company around six key elements; technology, commercial excellence, customer focus, globalisation, innovation, and developing growth leaders.

Chapter 11: Create a Learning Environment

"It's all about learning." The key to GE continuous progress is how leaders foster the learning environment in the organisation. The chapter shows how Jeff Immelt develops more learning sessions in GE.

Chapter 12: Find the Future

This chapter is about emerging markets around the world such as China, India, Russia, Brazil. GE's three keys to effective globalisation are; 1 Use size as an advantage. 2. Create customer optimization, and 3. Leverage capabilities.

Chapter 13: Plant Many Seeds

GE is still expanding their businesses in various fields. Moreover, Jeff Immelt reorganised GE into four divisions; Technology Infrastructure, Energy Infrastructure, GE Capital, and NBC Universal.

Chapter 14: Find Opportunity in Adversity

This chapter is about the ongoing economic crisis and the stock market and how Jeff Immelt is coping with them.

Chapter 15: Leadership for the New Century

(This chapter is just a brief conclusion, albeit a grand name)

...

I'll compare this book to an ideal business book; a book that is easy to understand, distinct, practical, credible, insightful, and provides great reading experience.

Ease of Understanding: 7/10: This book is written in plain language. Most of the contents are from articles in the business magazines. It is an easy and fast read without deep analysis. The drawback is the flow of the book which lacks solid structure. Titles of the chapters, sometimes, are not really relevant to contents.

Distinction: 8/10: This is the only book on Jeff Immelt available.

Practicality: 2/10: There is no guideline on how to do anything in this book; it might be the purpose of the author. This book is a great compilation of what Jeff Immelt said. There are some lists of what GE and Jeff Immelt have done (see Chapter 5 above); and that is as far as the content goes.

Credibility: 5/10: The credibility of the sources is excellent because they are in quotations. However, there are some interpretations and journalism by the author that make this book a bit unconvincing. Everything Jeff Immelt did seems to be the right way and is taken for granted. David Magee unavoidably compared Jeff Immelt to Jack Welch and he praised Jeff Immelt for lots of things that he did but Welch did not do such as innovation sessions. There are countless features that the two are similar and the author seems to praise Immelt because he followed it nicely. I am not in the position to judge which CEO is better but the overall tone of the book is 100% pro Jeff Immelt (in everything he did) which is over the top.

Insightful: 3/10: Although this book has the most quotes from Jeff Immelt and other GE executives, it is extremely shallow. Analysis is non-existent in the book. Everything in this book is as deep as what Jeff Immelt and others said without any further and deep investigation. As I mentioned earlier, things, in this book, are taken for granted.

Reading Experience: 5/10: The good point is that this is an easy read and it can be fun if you don't think about it too much. However, the tone of the book makes everything Jeff Immelt did a stroke of genius and it even seems that David Magee was occasionally having a go at Jack Welch which is ridiculous.

Overall: 5.0/10: The title "the New GE Way" is a massively misleading title because it is basically the same GE we have known. Under Jeff Immelt, GE has the same GE way with the new leadership, updated and refined business models, and enhanced management tools. Unlike other "GE" books (especially by Jack Welch), this book provides you with little insight and no guideline. But if you really admire GE (like me), I think that you will buy the book anyway. All in all, the book will make you know Jeff Immelt much more. Instead of "Jeff Immelt: the New GE Way", the title should have read "Jeff Immelt: 7 years as a GE CEO mini biography" and I would have been disappointed slightly less than I am. By the way, I will be patiently waiting for a book by Jeff Immelt himself if he writes one. Skip this one if you can.

(I have done this kind of review for some months; if any of you have a comment or suggestion, please do tell)

At General Electric, the chairman and CEO selects his successor, subject to confirmation by the board of directors. Almost 30 years ago, Reginald Jones selected Jack Welch and urged him to "blow up GE." Both he and Welch realized that the "Welch way" had to replace the "Jones way." During the next 12-18 months, Welch became known as "Neutron Jack" as he made numerous and significant changes throughout GE, systematically and summarily eliminating both unprofitable businesses and underproductive people.

What we have in David Magee's book is, to the best of my knowledge, the first comprehensive examination of Jeff Immelt's leadership as GE's current chairman and CEO. Prior to being selected by Welch and then confirmed by GE's board of directors as the company's chairman and CEO in 2001, he held a succession of increasingly more important executive positions in various GE divisions (e.g. Plastics, Appliances, Plastics Americas, and Medical Systems) after earning an M.B.A. degree from Harvard University's Graduate School of Business in 1982. He soon caught Welch's eye and was generally viewed as a fast tracker among the company's younger executives. He was promoted to be vice president and general manager of GE Plastics, overseeing 5,000 employees and $3 billion in business. But after a promising first year, Immelt was slow to inflationary forces in the global plastics market. His division took a heavy toll in both sales and profits. Immelt was required to attend the annual meeting of GE's top executives in 1995 and successfully avoided Welch and his wrath for three days. Finally, Welch caught up to him. "Jeff, I'm your biggest fan, but you just had the worst year in the company. Just the worst year. I love you, and I know you can do better. But I'm going to take you out if you can't get it fixed." Everyone knew that Immelt was in an especially difficult situation. However, Immelt accepted the harsh criticism ("I took a couple pf real ass chewings from Jack") and, under severe pressure, showed exceptional toughness and problem-solving abilities as well as composure and self-confidence. He and the division emerged from this "trial by fire."

Although Magee includes a great deal of information about GE, most of it has already been discussed in dozens of other books, notably those written by Welch himself as well as by Stephen Baum and Dave Conti, Jeffrey Krames, Bill Lane, William Rothschild, Robert Slater, Noel Tichy, and Dave Ulrich. The focus of this book is not on GE, however, but on Immelt. Here are some of Magee's observations and insights that caught my eye:

"Age might have been a tilting factor in Immelt's favor as well [as being `comfortable in his own skin]. Seven years younger than [one contender, Jim] McNerney and eight years younger than [another, Bob] Nardelli, Immelt could make a 20-year run as GE's leader just as Welch did while McNerney and Nardelli reasonably could not have lasted more than a decade and a half." (Page 33)

"After Welch retired, Immelt continued the legacy of leadership training at Crotonville. By his seventh year on the job, he was pouring more than $1billion into corporate training and professional development, a figure believed unequaled by any corporation in the world. Think about it. Most CEOs would love to have a billion bucks to spend after expenses, but GE puts that amount as an expense into employee training education." (Pages 77 & 78)

The reason organic light emitting diodes "cost too much for the average consumer and the reason none of the other companies investing in OLEDs has raced into the marketplace has been manufacturing difficulty. The lighting technology existed, but the ability to make large quantities of its outside of a laboratory did not. That's where Immelt investment and commitment to the cross-fertilization benefits of the GE Global Research Center paid big dividends for the company in 2008." (Pages 124 & 125)

"When discussing GE's growth process, Immelt typically starts with innovation, even though the diagram runs in a circle and all aspects work together... `I knew if I could design a process and set the right metrics, this company could go 100 miles an hour in the right direction. It took time, though, to understand growth as a process.'" (Page 166)

"Whether it's in emerging markets or the developed world, there will be about $5 trillion invested in the next six or seven or eight years in infrastructure," said Immelt. "And one of the things I learned in business school is that if you want to grow, hang around people that are spending money. It's one of those things that always works, and so we hang around people that are spending money, and right now they're investing in infrastructure." (Page 194)

"Transformation almost always comes at a price in business, no matter how necessary it may be for the good of a company. That's why some leaders do not dare try it. Maintaining more of the same, with a new twist here or there, is considerably easier. That, however, is not GE. And that is not Jeff Immelt. He planned on retooling the company for the twenty-first century from the moment Jack Welch called him that day after Thanksgiving in 2000 to tell him that he would be the company's next chairman and CEO." (Page 229) And indeed there would be numerous and extensive changes but some of the reasons for them could not have been anticipated prior to events on September 11, 2001, only four days after Immelt assumed the leadership of GE.

David Magee met with him again last September, seven years later, "while the global economic meltdown was gathering significant momentum. Rather than back away from his determination to build leaders at GE, Immelt insisted that, no matter how tough the fight became, his and his company's commitment to training its people would not only continue, but would also be enhanced." Whatever the economic circumstances may be in months and years to come, GE will continue to allocate however many resources may be needed to teach its people how to perform, problem-solve, and drive change. That will always be the GE way, no matter who its chairman and CEO may be.

Magee's book has some useful material, but readers have to search for it - the book lacks structure or any sort of focus on actionable material. It begins with Immelt's college and early career at GE - including early major challenges such as handling a faulty compressor design for refrigerators at GE's Louisville facility. (How Immelt handled this could be useful material, but Magee provides no detail.)

Welch wanted to get big fast, so he initiated the strategy of GE growing through acquisitions. Immelt has focused more on product development and set the tone via expanded and refurbished R&D facilities and requiring three idea proposals each year able to generate $100 million in revenue growth. (Organization level involved is not made clear.) GE has a $6 billion R&D budget, with 60% coming from GE businesses (they get to decide how the dollars are used), 27% from GE corporate, and 13% from outside partnerships. GE emphasizes cross-business benefits from R&D - eg. use of jet engine blade developments used in wind turbine blades.

Sometimes Immelt accepts a majority rule for advice from leading managers, but typically only when he doesn't have strong feelings one way or the other. Immelt says he does this about five times/year - if more, they'd leave, if less, there would be anarchy.

Immelt has strongly committed GE to ecomagination - $25 billion in revenues by 2010, R&D at that point of $1.5 billion.

Immelt Thinking: There's no second chance on integrity at GE, its important to like people and want the best for them, leaders should be clear thinkers who can simplify strategy into specific actions, develop expertise in an area and use it as a source of confidence to drive change. Units are partly evaluated by Reicheld's (Harvard) net-promoter score - the number of firms that would recommend GE less those that would not. GE asks industries, "If you had $200-400 million to spend on R&D at GE, how would you prioritize it?" Immelt encourages GE managers to learn from outside the company - go out on visits, ask them how they do things.

GE's Leadership Center has 16 levels of courses, including three for executives. The fist is a manager development course focused on basics of a good business. Attendees compete against each other solving simulated problems on a computer; 80 students, 8X/year. After about four years, those progressing attend the second level working on real problems facing GE or the world that GE might solve. Findings are presented to Immelt, who hand-selected the problem. The third level focuses on company culture and is intended for the top 300.

I love reading books about great leaders. They inspire me. Like what Immelt said "We are never as good as we can be". So I study.

Immelt had a tough and very public act to follow in Jack Welch. From reading the book, I prefer Immelt's style more than Welch's. The book is polite and makes few comparisons but it is easy to glean from reading.

The book is meant to give insights into lessons a leader can learn from Immelt. And there is much that can be learned. Much is simple (one of the goals of GE is to make things simple). EG ask questions and listen to the answers.

Every book I have read about GE stresses the need for details and processes. Part of any companies success is digging in. Doing the work and knowing the details. Details and processes win.

Immelt's personal strategy for overcoming tough times:

"Commit to learn everyday (you need an incredible thirst for knowledge)

work hard with passion (competence and energy solve most problems)

Give people a reason to trust (the world is more selective today - trust is a differentiator)

Have confidence (Understand that you can make a difference)

Be an optimist (cynicism is corrosive)"

I was impressed that GE never backed off training, even in tough times. I believe tough times is a good time to invest in training. Partly because change is required and training helps foster positive change and partly because usually there is some surplus capacity so staff have the time.

I resonate with Immelt "I'm a learner, and most good leaders that I like are the same way".

GE's core values according to Immelt are:

Integrity

Performance

Change

These look simple. I would have added more definition. EG change for the sake of change is not good. It is "appropriate change" that needs to be sought. Immelt says "constant reinvention is a central necessity".

I liked what Immelt teaches young leaders:

1 - take personal responsibility

2 - Simplify constantly

3 - Understand depth, breadth and context

4 - Focus on alignment and Time Management. (and no I did not make that one up)

5 - Learn constantly and learn how to teach. (and I would add learn how to learn faster and better)

6 - Stay true to your own personal style.

7 - Mange by setting boundaries, but allow freedom in the middle.

8 - be disciplined and detailed.

9 - Leave a few things unsaid

10 - Put people first (interesting since this has not been a GE trait - I agree - see my review of Primal Management)

As a small shareholder in GE, it is tough to be objective since my investment returns have been less than the index. But when I look at the true facts, GE has actually performed well (not the stock - the company). In the 6 years from 2001 to 2007, sales and earnings both increased by 60% while the stock price dropped 7%. And since then, the stock has dropped by 66%! So poor investment.

Maturity is being able to learn from people regardless of circumstance so I hope I have learned despite losses in the stock market.

The book is well written. Macgee is a good writer with impressive credentials. I will read his other books. It is an easy and quick read.

I recommend it.

David Magee's "Jeff Immelt and the New GE Way" is a fine companion to Robert Slater's "Jack Welch" series of books in the '90's. As a GE employee in the late '90's - early '00's, Mr. Slater's books were encouraged reading.

As difficult as it is to succeed a legendary CEO like Mr. Welch, Mr. Magee restrains himnself from drawing too many comparisons to Mr. Immelt's tenure, but not completely. Mr. Immelt is a different leader for a different time, but certainly benefits from the innovative leadership and results-oriented culture that defined Mr. Welch's tenure. As a leader, Mr. Immelt stands on his own two feet, and has defined his tenure with two (but not only two) very important initiatives that not only differentiates him from Mr. Welch, but well positions GE for the times we live in, and for the future.

First, and most critical, is Mr. Immelt's investments in research & development as part of his strategy for organic growth, rather than short term results fueled by acquisitions. This builds upon a traditional strength of GE - their ability to innovate and bring unique products and services to market that also leverages GE's boundaryless culture to benefit all of their business units, from Energy to NBC. Mr. Immelt's vision is for R&D not only to benefit GE in the present, but demands and rewards his executives for proposing "ideas" that will benefit the company 10, 15, or 20 years into the future. His "ecomagination" initiative is part of this vision.

The second important initiaitve is Mr. Immelt's focus on two important growth areas: medical technologies and infrastructure. While many know GE from their washers, dryers, water coolers, and light bulbs, and these businesses are profitable, they are slow growth and low margin businesses. The future is in harnessing medical technologies and energy and technical infrastructure on a global scale. This is where the growth will come from for the next 25 years.

Mr. Magee also correctly points out that GE's stock is trading below its value, a point that Mr. Immelt is making, quite correctly, to anyone that will listen. GE seems to be oversimplified by analysts or by the popular business media - they lump it in with other companies that are only marginally related. If the banking sector is getting pummeled, GE is pummeled because of it's GE Capital unit; if advertising is in the tank, GE stock goes down because of their NBC unit; if AIG, GM, Lehman Brothers, and Enron can fail..... and so it goes. What everyone is ignoring is that GE is a diversified, global, profitable, growing, and healthy company! Their ability to not only turn profits, but grow, in this economic environment, in addition to Mr. Immelt's investments for the future of the company, make GE a no-brainer investment. Recent stories in the media calling for Mr. Immelt to shed underperforming businesses, or even more laughable, quit (!), demonstrates a limited knowedge of the company, it's business model, and it's undeniable culture of performance and growth. Are they omnipotent? Of course not, they exist in the world just like the rest of us, but if you take even a little closer look, you will find that GE is as stable and focused as ever.

Mr. Magee's style is very simple, and very easy to read, but the book can at times can read like a series of newspaper articles rather than a well researched book. This is its value as well as its drawback. He had access to Mr. Immelt and other top GE executives, but his interviews are more informative rather than in depth or detailed. He is trying to tell a story, and to his credit, does not shy away from and addresses criticisms of the company. Like Mr. Slater did with Mr. Welch, he does not restrain himself to making glowing comments about Mr. Immelt, or annoyingly keeps telling the reader that John Rice is head of GE's infrasturcutre division instead of treating him as a continuous presence in the book.

Style aside, the book is a valuable contribution to what is going on in one of the world's most important companies, and a good companion to current events coverage of GE and the economy at large.

Few things are more challenging for a new chief executive than following in the footsteps of a corporate legend, but that is what Jeffrey R. Immelt had to do when he succeeded Jack Welch as chairman and CEO of General Electric (GE). In this comprehensive portrait of a talented young CEO who has overcome tough challenges, David Magee, the author of respected books on Toyota, Nissan, Ford and John Deere, traces Immelt's rise to the top of GE's competitive management ladder. Magee provides Immelt's complete background and limns his GE career with an emphasis on the problems he addressed and the values that support his strategic decisions. getAbstract recommends this saga as a well-reported inside look at global strategy in the making.

GE CEO Jeff Immelt has been accused of poor judgment by investors and this laudatory tome is proof of it. Why, with such a poor performance record, would any CEO participate in a book that pretends to offer advice to others?

Under his reign, GE shares have underperformed the S&P 500 index, dropping from around $50 a share to around $10. The company has lost its AAA credit rating and slashed dividends for the first time since the Great Depression. Immelt's GE has lost the confidence of investors with a series of missed earning estimates and mollifying statements about business performance, the credit rating and dividend that weren't true.

As for transformation, he has tried to dump GE's lighting and appliance business after detailing their poor prospects to analysts. As a man with a marketing background, he should not have been surprised when no eager buyers came forward.

This book is slickly written and offers many interesting management techniques. Unfortunately, however, for investors the GE Way under Immelt has been to the poorhouse.

Jeff Immelt is responsible for losing billions of dollars of shareholder equity and nearly destroying GE. Great job, Jeff - how about writing a book so you can share your genius.

Tell us how you took a once proud NBC network and morphed it into the NBC/CNBC/MSNBC propaganda service that Pravda would be so proud of.

All I can say is 'why bother?'