September 25, 2002
Contact: Jay Chrepta
Harvard Business School
(617) 495-6155
After One Year At GE's Helm, 1982 Alumnus Tells MBA Students To Think Globally, Reach High, Play By The Rules
BOSTON -- "If you like people, and you like business, this is the best gig in the world," said Jeff Immelt (MBA 1982), GE’s ninth chairman and CEO, to more than 1,000 MBA students during a visit to his alma mater September 25th.
During an hour-long "town hall" get-together, Immelt fielded 20 questions on subjects ranging from globalization to corporate ethics, and even a few about his celebrated predecessor, Jack Welch. Although Immelt, 51, has been GE’s CEO for just a little more than a year, he made it clear that the company’s vision and culture would reflect his management style, and not Welch’s. "I’m replacing a guy who was voted the best CEO of the last century," he remarked.
Of the company’s diverse holdings, Immelt said that "about 70 percent" fit into GE’s 20-year business model. Specifically, he said GE was looking toward a "fast growth" strategy where it would invest in companies and strategies that deliver a minimum of seven percent growth annually. This would be accomplished primarily by extending the company into Chinese and European markets, but also by acquiring companies in health care services, which he predicted would account for 20 percent of the U.S. GDP by 2010.
Ranked sixth on the Fortune 500, GE reported nearly $126 billion in revenue in 2001 and employs more than 300,000 in divisions ranging from financial services to plastics. Its recent acquisitions include the Spanish-language television network, Telemundo, and Zond Systems, a German-based windmill company since renamed GE Wind Energy.
"Our goal is never size," he said in answering a student’s question on maintaining growth targets greater than seven percent a year. "You always want fast growth, but you have to make growth an advantage." Citing GE Medical System’s foray into information technology, Immelt credited the company’s creation of “economies of scale” to build a $2 billion-a-year business.
Yet, not all risk-taking is golden. Citing NBC’s partnership with the World Wrestling Federation to produce a hybrid of professional football and big-time wrestling called the XFL, Immelt pointed out that GE lost $50 million on the deal.
Corporate accountability figured prominently into Immelt’s remarks. In an attempt to make the company more "transparent," Immelt said GE has begun to report the price of stock options as an expense instead of burying the data as a footnote in its annual financial statements. Furthermore, the company is in the process of appointing more outside directors to its board.
In making GE a truly global presence, Immelt predicted a time when half of the company’s senior managers will be non-U.S. citizens. "We want GE China to be led by people from China," he said, adding that the process of effecting change in the political and human rights spheres "is the role of a big leader."
Speaking firmly and directly to GE’s role as a catalyst for social and economic change within China, Immelt said, "The U.S. government wants us to do business there, we want to do business there, and you have to ask if (the Chinese) are better off inside the global economy, or on the outside."
Immelt urged students to seek out the wisdom of mentors, "people you trust," to provide feedback and advice. "Take the right assignments, and trust yourself," he added. Immelt, who has worked for General Electric since graduating from HBS in 1982, said he had relocated his family nine times during the past 21 years. "You don’t do a job like this unless you love it," he commented, acknowledging his wife and daughter’s support. "The company is a big priority," he said, "but my family knows that when I’m not with them, I’m at work and when I’m not at work, I’m with them."
In closing, Immelt gave a pep talk to an audience full of students some 25 years his junior. The one-time Dartmouth College defensive tackle provided the hope of a better tomorrow through hard work, sacrifice, and the pursuit of excellence.
"You can build the career of your dreams if you want to go for it. Take risks, be a giver not a taker. Give back. Have fun. Make a difference, and be the best on earth."