Monday, December 06, 2010

Jeff Immelt on Leadership

The Sunday NY Times ran a very good piece on GE. The article centered on GE's strategy to focus future growth and profits on manufacturing vs. financial services. GE Capital used to deliver 50% of GE's profits, however, the recent financial crises led GE to return to its roots.

The barrier to entry - scale and capital - highlight the strategic value; "heavyweight products that take patience and piles of cash to develop, weigh tons and last for years — next-generation jet engines, power turbines, locomotives, nuclear plants, water-treatment systems, medical-imaging equipment, solar panels and windmills. Mr. Immelt notes, for example, that the cost of a good-sized solar-panel plant, about $70 million, is more than twice the total investment in Google in the six years before it went public in 2004."

The article also touched on his leadership style. I loved this quote. "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.”

We hear all the time about Steve Jobs, perhaps the ultimate rule by fiat leader.  However, I personally believe that strong teams, decentralized decision making, and not top-down central planning lead to better companies and stronger results.

The genius CEO, Steve Jobs, is sui generis. Not a scaleable model to mirror one's company or leadership style after. There is only one Steve Jobs. However, all leaders can hire well, empower their teams, and set strategic direction, while avoiding the micro-management and rule by dictate.


  1. The dilemma is in setting the strategy. Everything else can be delegated down to decentralized teams. The problem is that most entrepreneurial CEOS cannot tell the difference between strategic decisions and exercising authority. If CEOs would focus on customers, revenue growth and capital management and leave everything else to the team more companies would be successful.

  2. Thanks, Robert. I appreciate the comment and agree 100% with your thinking on leadership.