Former GE CEO Jeff Immelt speaks to Yahoo Finance

In a new interview with Yahoo Finance's Julie Hyman, former GE CEO Jeff Immelt comments on the evolving role of CEOs, climate change, and why he wanted to tell the story of his tenure at GE in a new book.

Video transcript

JULIE HYMAN: Jeff Immelt is the former head of General Electric. He went from salesman to CEO and ran the company for 16 years, leading GE through the toughest times during its long and storied history. Immelt is currently a partner at the VC firm new enterprise associates and author of the memoir "Hot Seat, What I Learned Leading A Great American Company."

I'm Julie Hyman and I am joined now by Jeff Immelt. We mentioned there the book you released earlier this year called "Hot Seat," which effectively tells the story of your time at General Electric and its many different business lines. There's been a lot of discussion, Jeff, especially in the wake of that book about your tenure there, about the decline in market value there.

I'm not really interested for our purposes today in going sort of blow by blow of what happened at GE but help us understand how people should view your commentary and what you have to bring now to current topics and the current zeitgeistard. How do you think folks should view your credibility in the wake of your time at GE and the wake of your book?

JEFF IMMELT: Yeah, Julie. So, it's great to be with you, first of all. I think I wrote the book really for two reasons, one is that the GE story is a complicated story. And I think when you have a complicated story, you have to tell it fully and completely and I didn't feel like that was happening in the context of GE.

We won in our markets, we experienced globalization and digitization but the market cap didn't grow and all of us carry that as a burden as we go forward. But I wanted to tell the story, a complicated story more completely.

I also think in this generation, all leadership is crisis leadership and from 9-11 through the financial crisis and COVID and Fukushima, my team and I experienced a lots of volatility and I thought some of the storytelling and some of the lessons would be valuable to other leaders. So, those are really the two reasons why I wrote the book.

JULIE HYMAN: So, let's bring in to present day then, Jeff, and talk about the crisis that has unfolded over the last 18 months. The pandemic crisis, of course, that has challenged so many companies. And I wonder, given your experience, have you looked across the landscape and seen particular leaders that you think have navigated this period of time especially well? And what do you think have been the hallmarks of strong leadership during this time?

JEFF IMMELT: Yeah. Look, I think Julie, good leaders have to absorb and they have to absorb fear. And the important thing when I look at some of the old colleagues that I knew in the airline industry or oil and gas industry, they took a punch right in the nose but the best leaders kind of kept focus on the future, they communicate with their team, and then been able to navigate from one side to the other fairly well.

I also think that in a crisis, you have to hold two truths. You have to know that things can always get worse and at the same time, you have to have a vision that there is going to be a future that you need to invest in. And I would say to a certain extent, as we face COVID, people might have pulled back too much in the context of capacity and investment and as a result, some industries weren't ready for the economy as it turned back on.

So I think those are the two things, absorbing fear and holding two truths that I have to think that leaders have to navigate over this crisis. In terms of look, again, it's an out of favor sector but some of my old business colleagues from the oil and gas sector, oil was negative $30 a barrel a year ago and now it's at highs again and having gone through that kind of volatility, I think some of them have done a really good job.

JULIE HYMAN: Yeah. We've got new highs I think just today for a lot of this oil prices. Also we have seen the role of leaders change, the role of CEOs change, that was sort of starting to happen during your tenure at GE but I think it's happened even more over the past year and a half with a lot of CEOs taking new measures to take care of their employees, for example.

And also as we have seen COVID sort of become politicized, we've seen more CEOs sort of step out in front of that. What do you make of that change? What do you think the role of the CEO is in this day and age?

JEFF IMMELT: Yeah. Look, when I first became CEO, let's say in 2001, CEOs were private citizens and not much was asked or demanded of them. By the time I retired in 2017, it was a more public job and I think in many ways between 2017 and 2021, it's become an even more challenge job.

You have to-- for the first time in a generation, the leaders have to navigate inflation, there's tremendous volatility in the global markets, they're expected to take a stand on social issues, there's an incredible need for improvement in diversity and equity, there's big problems to be solved in climate.

Globalization used to be a good thing, now if you use the phrase globalization, you're considered to be an enemy of your country. So these are all the complexities that CEOs have to understand and have to navigate.

Look, at the end of the day, nothing matters if you don't run your company and run it well but at the same time, you have to have a sixth sense for what's going on around you and pick your spots in terms of when to engage.

Policy now equals politics. It used to be that you could advocate for a policy, you can't do that today without really taking on a political stand. So, I think it's important for CEOs to pick their spots when you think about all the things that are going on today.

JULIE HYMAN: So, do you think on balance that it is a positive change? Is that the job has seemingly become more complex than ever? And what then, not just what do CEOs need to do, but what kind of people need to be chosen as CEOs?

JEFF IMMELT: I think-- I'm not judgmental about what's positive and what's negative, I think caring about what's going on in the world is always a good thing. I think being associated with solving problems is something companies can do and that's a good thing.

If you think about things like climate change, sure, there's a big public policy aspect that's essential but at the same time, it's not going to be solved, it's not going to be resolved unless the private sector gets dramatically involved and is a positive force for change. So, I think those are things that are important for companies.

I think truth equals facts plus context, it used to be you didn't have to worry about context, you didn't have to worry about how you or your company fit with the world, now if you don't really understand the world, you can't lead. If you don't understand kind of the overall fit and what's going on around you, you can't lead. So, I think that's a real change in terms of the types of people that can do the job.

And is it good or bad? I think that depends on whether or not we actually solve the problems. If we get ahead in the environment, if we make health care more affordable, if we can recruit good teams, then it's tremendously positive. But if we still have the same problems five or 10 years from now, then different models will continue to evolve.

JULIE HYMAN: Well, on that front and on the climate change front, the UN was just out with a report today saying we're looking at 2.7 degrees Celsius in temperature increase by 2100 if things don't change on the country policy front. And climate change is something that you definitely focused on GE, focusing on things like the wind turbine business, also on the water business.

But at the same time, you made some big deals toward the end of your tenure that were focused on the more traditional fossil fuel driven business. I'm talking, of course, about Alstom which had sort of aspects of both, I guess you could say, and the Baker Hughe's deal.

Things have changed a lot since then but even then things were beginning to change. So, did you see the signs at that point and just thought that it would be slower or what were you thinking as you made those kinds of deals?

JEFF IMMELT: I think I believed in the beginning and I believed at the end that the energy transition would always be about a transition. So, I've always believed that climate change was real, I've always believed that this is a pivot that has to take place. We built a big wind turbine business, we built a big grid business that was very positive and we did finance lots of projects in the clean tech space.

I guess truly, we believed the natural gas that natural gas would be a key pivot for the world as it pertains to how we get to a cleaner world, how we actually achieve the standards that we need to achieve. I believe that legacy industries had to be cleaned up in order for us to make progress. To a certain extent I still personally believe in those things today, even though there's lots of people that will disagree with me.

In other words, I believe in renewables but I believe without nuclear power and natural gas and some of the other things in the mix, that this transition is not going to be as successful as we all want it to be. So, I understand the question, I think we had a very strong belief that there would be a transition, and I still hold many of those beliefs today.

JULIE HYMAN: Gotcha. You also mentioned globalization, I do want to ask you about China as well because you have extensive experience in terms of business interests in China. The Biden administration has continued to take somewhat of a hard line toward China, so how should business leaders be thinking about their relationships there, both with corporations that are based there as well as the Chinese regulators and authorities?

JEFF IMMELT: Yeah. Look, to a certain extent we always have to follow the lead of the government and the relationship of China is more complicated and negative today than at any time, certainly in my business career. But it's going to be the biggest market or the second biggest market and almost everything that's important. If you want to solve some of the biggest problems like climate change, China has to be our partner.

Can you imagine the two biggest economies in the world not having some kind of economic relationship? So, look, I advise business leaders not to pull back right now. In fact, if anything, if I were back in the seat of running a big public company or a multinational company, I'd be investing more in China now, not less, just because electric vehicles, clean tech, AI, I could go down the list, many of the futures of the industries we care a lot about are going to be determined both in the US but also in China.

And the Chinese influence in Europe and Africa and Latin America is not going to go away. So, my belief is for engagement. I think it's important, I know it's really hard right now and very controversial but I wouldn't pull back, I'd keep focused on building the right kind of Chinese context inside your company.

JULIE HYMAN: And Jeff, speaking of the future of various industries, that was a passion of yours at GE and now you're looking at that sort of more full time, right? You are out of venture capital firm and when we spoke in advance of this conversation you said you could talk about how much of Silicon Valley is magical and how much is BS, and I can't really put it better than that. I mean, talk to us about your experience. You're coming from a big traditional company, yeah.

JEFF IMMELT: Yeah Julie, I wanted to work with innovation and I wanted to work with entrepreneurs, I convinced my wife to move to California so that we could kind of see it up close. I love what I'm doing with respect to the venture from our work with now. I'd say to all my colleagues from Legacy businesses, there's an infinite amount of money, the talent is flocking to the startup world and the innovation is real, whether it's artificial intelligence, automation, I could go down the list.

So, to a certain extent all of us need to be as paranoid as possible. I think what's yet to be determined, Julie, is what does the culture of the future really look like? I mean, so much of it still in Silicon Valley is economic, it's stock options, it's every company being worth a lot. But I think the staying power of Legacy Companies, the ability to do hard things like jet engines and things like that, it's kind of what we bring.

And I think the future is going to be some mash up of the talent and innovation and technology with cultures that can recruit and train and build teams over the long term and through cycles. One of the things that makes Microsoft such a great company today, one of the things that makes Satya such a great leader, is their stock price was flat for 12 years.

So from 2001 to let's say 2015, everybody who was at Microsoft had to be there because they loved the company. And I still believe there's some element of that, it's critical for building competitiveness in the future. That isn't always captured in Silicon Valley, isn't always captured with all the startup craze.

JULIE HYMAN: Jeff, seems like you're having fun. Jeff Immelt, former CEO of General Electric. Thanks for being with us today.

JEFF IMMELT: Good to be with you. Good luck in everything, thanks for the time.