Economic
Times
6 April 2008
"People get a chance like this not because
of what they know but because of how fast
people think they can learn. Maybe Jack and
the GE Board thought that I am a good learner"
The
fifth floor room in the Chairman’s
office of the Aditya Birla Centre in Parel
was crackling with ideas. As Mr.Kumar Mangalam
Birla and his editorial team (read ET)
tried to pick the subject of the interview,
a variety of CEO names were discussed and
tossed around. Mr. Birla had set the bar
pretty high himself, as he’s already
interviewed Bill Gates for ET two
years ago, and the search was on for a similarly
iconic interview subject. But one name kept
cropping up, GE and Jack Welch. It was then
that our guest editor made his first content
call — why not Jeffrey Immelt, he asked.
After all, he had successfully led GE and
has clearly emerged as one of the world’s
most admired CEOs in recent times —
transforming the company into a $165-billion
conglomerate, a no mean feat. And when the
two finally connected, what followed was
a leader-to-leader talk at its best. Excerpts:
KMB: Hello!
JI: Hello! This is Jeff Immelt.
KMB: Hi Jeff, I am Kumar Birla from
India. I am the Chairman of the Aditya Birla
Group.
JI: How are you?
KMB:
Very well. It’s great to speak with you.
Thanks so much for taking the time out.
JI: Well, congratulations for being
the editor for the day.
KMB: Well I agreed to do this only
because I got to interview you.
JI: I hope there is a little bit more
reward for you than just having the opportunity
to interview me.
KMB: No. I think this is much more
than I can expect. It’s really a pleasure
to be speaking with you and thanks for taking
the time out.
JI: Happy to do it.
KMB: Ok. Let me ask you — to start
with, did you expect the top job? What do
you think made Jack select you for the role
of the chairman?
JI: No, I have to say I never really
expected it. It was one of those things where
there is so much luck involved. I’ve
always been asked this question and I’ve
always told people that it’s hard for
me to know exactly what was behind the decision
making process.
KMB: Right!
JI: You know...I always think people
get a chance like this not because of what
they know but more because of how fast people
think they can learn. I’d have to think
that maybe Jack and the board thought that
I was a good learner and that I could adjust
to the world and drive the right changes at
GE.
KMB: Right! That’s interesting,
let me just go on to ask you, how the last
seven years at the helm have been and what
changes you’ve been able to make at GE.
Are you happy with the way the last seven
years have gone by?
JI: Its gone by so quickly...I think
the world has definitely gone through a couple
of changes during that period and that impacts
certainly big companies like GE. You know
when I took the job, I always said that I
wanted the company to be more innovative,
more global and more focused on the customer
and I do believe that in the last six years
we’ve been able to do that, so I see
that progress…a lot of large cap companies
in the US, and GE is no exception, have seen
our PE ratios depress. So, clearly I’d
like to see a better appreciation in the stock
prices. But our earning is strong, our global
position is strong and by and large I am pretty
satisfied that the company is strategically
very well positioned.
KMB: You’ve done a great job and
I think you are being very modest when you
say that the company is well positioned, I
think it’s a lot to do with the strategic
direction and some very dynamic leadership
provided by you.
JI: Thank you!
KMB: Just to go back to the three goals
that you set out for GE when you took over
which you just talked about, give just one
example of each.
JI: In the area of innovation, I would
just pick that we were the early mover in
the area of environmental solutions, what
we call Ecoimagination. You know we started
this before it was very popular, in 2004,
and in a relatively short period of time our
environmental technologies are above $15 billion
of revenue, $16 billion this year. So, I think
that was an innovation we drove across our
platform, that really drives to ensure growth,
some of it technical and some of it from the
stand point of how we did our sales and marketing.
KMB: Right!
JI:
In the case of globalisation, more than 50
per cent of our revenues come from outside
the US today. When I became the CEO, it was
roughly 42 per cent so that’s a fairly
big shift for a company of our size. I see
us moving on all fronts from a global stand
point. In the case of customers, we’ve
embraced what we call Net Promoters’
Score in terms of how our customers view us
and judge us and we believe that this very
strong focus on the customer has helped us
really differentiate ourselves versus the
competition. It’s something that we plan
to continue to drive forward with.
KMB: Just for my learning, Jeff, can
you share one example of how customer centricity
and customer service has improved in the last
couple of years. To start off with GE, it
was already a very customer focused company.
I’ve read about remote maintenance of
aircraft engines, for example.
JI: You know, I would say, I would
take a perspective of, lets say, the locomotive
business, where the cycle time to deliver
a locomotive we’ve taken down from about
100 days to about 10 days.
KMB: Wow, that’s a huge difference.
JI: Net Promoters’ Score for the
people in the business review...it becomes
a rallying cry of how we can get an entire
organisation rallied around one customer.
KMB: That’s fascinating Jeff,
you’re saying delivery time has gone
down from 100 days to 10 days.
JI: Yes, its about 90 per cent reduction.
KMB: That’s truly outstanding,
so six sigma remains a very important initiative
across the company.
JI: I say...six sigma remains important
and we’ve kind of evolved it to embrace
Toyota’s lean manufacturing at the same
time and so what we’ve really tried to
do is embrace really the process of change
inside the company and try continuous improvement
each and every day.
KMB: So, would you say that GE is looking
to provide solutions to its customers rather
that products and services?
JI: I’ve always talked that way,
let us say it’s a continuous journey
in terms of how we look at it. I think we
really want to be embedded with our customers
so that we become their partners. I think
that a lot of people talk about that but to
me unless you can find ways to make your customer
more profitable, you cant live that promise
and I’ve always thought that’s something
GE is good at.
.
KMB: How do you actually get a sense
of how customer focused a business is, or
how they’ve moved in terms of servicing
the customer better, is that something that
is measured in quantitative terms or is that
more of a qualitative feel?
JI: The Net Promoters’ Score from
customers gives me at a high level a feel
of what a customer is saying about GE. Then
I spend about three or four days a month both
in the US and around the world really for
grassroots customer level exposure… the
last two days of this week, I was in Atlanta
on Tuesday, Miami on Wednesday and I spent
the entire days both visiting customers individually.
Then I have a round table with 20 or 30 of
our sales people. I also have a town hall
meeting with 300 customers and so I get a
very fresh perspective during these days in
a very filtered way with none of the managers
or bosses around, about how the company is
doing and what kind of perspectives they have
on the company.
KMB: So that’s a meeting that’s
held without the executives?
JI: Without the executives around,
it’s just one on one.
KMB: So any sort of breakthrough ideas
that have come from there Jeff, that you can
talk about?
JI: I would say from very mundane ideas
to bigger ideas, for example, and how best
to position technology. So it just gives me
a kind of fresh perspective on what’s
going on in the market place.
KMB: How do you allocate your time
across all the priority areas on your agenda?
JI: I probably spend my time 30 per
cent on people, 30 per cent on growth, 30
per cent on operations and 10 per cent on
public things you know… investor meetings,
stakeholder meetings, things like that and
I try to structure my calendar accordingly.
Continued...
|
