Jack Welch Beats Up General Electric's Jeff Immelt. But Who's The Real Innovator?

Posted by: Bruce Nussbaum on April 16, 2008

It’s rare for an ex-ceo to publicly criticize his successor but Jack Welch leveled a harsh blast against GE’s Jeff Immelt days after the company announced a surprise drop in earnings right after Immelt promised it would meet its rich financial targets.

This is what Welch said: “Here’s the screw-up: you made a promise that you’d deliver this and you miss three weeks later,’’ Mr Welch said on GE-owned CNBC. “Jeff has a credibility issue. He’s getting his ass kicked. He apologised. Things happen fast.’’

What happened was the collapse of Bear Stearns and the meltdown in the credit markets. What happened was the sharp decline in the US economy and the beginnings of a slowdown in India and other overseas

markets that GE plays in.

But I wonder at the image of Welch criticizing Immelt. Under Jack, GE ran the tightest of Six Sigma ships, focussing on cost and efficiency and delivering slightly higher returns every quarter. It was all about control.

Immelt dramatically reshuffled GE's portfolio of operations, going green, going global. He began to build a social system of innovation at GE, using P&G's Lafley and others to help him. GE has a long way to go--it is probably further behind P&G in building an innovation culture and is still mired in a by-the-numbers culture.

But GE is much more innovative today under Jeff than Jack. GE was on our Most Innovative Companies list for 2007. What do you think for 2008?

Reader Comments

Joan borowski

April 16, 2008 9:10 PM

As a stockholder whose stocks have fallen precipitously and are mired in the $30 dollar doldrums, I would not call the company innovative!!Rather,Immelt does nothing but acquire, acquire ad infinitum. My stocks are stagnant, while his pay just keeps growing and growing . Hardly innovative-- strewn out among all areas. Board of Directors, PLEASE get us a new CEO and quit rewarding mediocrity with BONUSES!!!

Bourgogne

April 17, 2008 1:06 AM

I wish BW would just retire Welch all together.

They give him a little corner of their web page to spew his dinosaur musings every now and then and its rather annoying.

This will be a trend to watch. Older guys criticizing new global guys and wanting to return to the ways they ran the ship.

Its a brave new world and guys like Welch will have to get used to viewing the game from the sidelines.

katie

April 23, 2008 12:03 AM

BRING WEELCH BACK - tyrant as he may have been he did bring that company to it's best value of all time. something to be said for that, or no?

Ron Bauer

July 2, 2008 7:54 PM

GE not only has to get rid of this IDIOT Immelt, but it should rescind Welch's OBSCENE retirement package and try to rebuild this once GREAT company.

Bill Kriese

October 1, 2008 1:38 AM

Immelt needs to resign. The stock has done nothing but plummet since he assumed the helm. And what's up with NBC news, it has lost all credibility?

Bart Schaminee

October 25, 2008 3:25 PM

Jack said once: "You should be incapable to destroy a company like GE".

In my opinion GE should remember that customers made this company big. Not shareholders.

So GE, fire the analysts and all the financial non-value adders.

Jeff, I wish you all the success and cooperation of your employees, to work bottoms up what you explain them you want to do topdowns. I think that is what Jack did great... but you liked it or you were gone.

Time for new inventions, change to a time of collobarative operations, with transparancy.

I know it is easier said than done. But what is easier: Explaining your shareholders you will not meet the numbers, or tell your customer he has to swallow the 15% price-increase (because we need to make the numbers).

A former GE employee, that remains respecting the GE Operating Systems.

Adri Romijn

November 25, 2008 10:52 PM

Please give Mr. Immelt a chance to lead the company his way, a more innovative way. What Jack did was looked perfect, but was actually perfectionism, what Jeff does is innovation. That takes courage, independent will and imagination, but mostly time and trust.

buy, and wait to see.

kind regards

adri

Nannini

March 7, 2009 11:50 AM

I agree with Bart Schaminee thanks for pointing out the invention part.
In the last saga, the whole thick fat inventory layer of everything was removed on name of many initiatives, if Peter Drucker was right, once all the fat is over you start cutting the flesh. in my view too much alread done in that part. 1)now GE (any real lean cmpany) should accumulate a fair deal of inventory of everything ( lean is no good for Uncle SAM) . 2)the market should be protected from too much greedy make-the-quick-buck investers, probably with a locking period, only the governmentor some common body should change the rules of the WS game. 3)the innovation at GE will start fetching good results after few years, not only to the company but to all its customers and to the world, but the issue is, will the quick buck makers spare GE?
if you look at history, Edison was successful not just because of his inventions ( Tesla was my favaorite of his time), great deal of business and timing sense. Now what I feel under the current leadership they do very important advancements in various technology fronts ( esp advanced materials, aviation fuel efficiency and in oild and gas)but ....

Marc

April 24, 2009 2:12 AM

I can't believe the writer of this article praises Immelt for being a socially conscious mushhead, while criticizing Welch for being a by-the-numbers guy. Business is about smart management of your resources and dollars so the company makes a profit that benefits its employees and shareholders. It's NOT about social experimentation and creating some kind of bogus utopia. P&G and GE are hardly good examples of successful companies. Economic downturn notwithstanding, the shares of both companies have been stuck in low gear for several years now--not exactly what I would call innovative in any sense. Maybe if Jeff Immelt paid more attention to the numbers and less to being a social innovator, GE would regain its once great status. Short of that, shareholders should insist on his ouster.

Guyfromplace

April 24, 2009 5:37 AM

Seriously? Bruce - can you count? GE's down 75% since Immelt took over. Talk about an undeserved tenure. And as for innovation: this sentence is innovative; Iyf$g^ Hwd%8 hn#h Fdh#4h g*gde. Get it? No? Me neither. I guess BusinessWeek lives up to its double entendre.

Tom Thomas

June 26, 2009 5:57 AM

Immelt is clueless and he gave another example of it on Charlie Rose tonight. He actually said he beleives in the science,(junk science that is)behind Cap&Trade (the big new energy tax proposed by the congressional totalitarians and Dear Leader).
I'm so glad I dumped my GE stock in 2007.

kenneth

June 26, 2009 7:29 PM

i bought ge stock in 1993 and sold out my holdings the day nuetron jack retired. i could not have stolen money as fast as ge was making it for me. had i kept my stock in march of 2009 it would have been less than my original 183,000 investment in 1993. how that for retirment. If Immelt does any better with GE all the shareholders can go to the poor house.

rick

August 18, 2009 5:58 PM

I'm a GE employee for the past 15 years and I think Immelt is horrible. All of us employees believe he is ruining the company. Bring back Jack! He had sound business principles. Jeff is a liberal fool!!

craig

February 22, 2010 9:47 AM

Bring Jack Back!!!!!!!!

Dawn

May 5, 2010 10:47 AM

Have a view on the cluelessness with which GE Capital and the late GE money was run. Figures on the spectacular mismanagement and ruthless and desparate cost cutting - headchopping measures will tell you how spine less, weak kneed and incompetent this great legacy has become.

Am an ex employee, proud of what GE was / great employer / good corporate citizen but it is marred with incompetence , lethargy , knee jerk short term fixes.

Immelt and his bunch of cronies need to go. This place is too good to go down like this.

piya

May 5, 2010 10:50 AM

immelt - incompetent. Totally screwed the careers of the guys at ge money

PAM

January 25, 2011 5:50 PM

GET RID OF THE CHEAT HE IS FOR HIGHER TAXES ON ENERGY.THAT WAY HE WILL SELL HIS WINDMILLS AND SOLAR PANELS TO US SO HE WILL GET RICHER AND US POOR.WHEN GAS,ELECTRIC,AND OIL GOES UP EVERYTHING YOU EAT WEAR DRIVE WILL COST MORE! GET RID OF BUM

Post a comment

 

About

Want to stop talking about innovation and learn how to make it work for you? Bruce Nussbaum takes you deep into the latest thinking about innovation and design with daily scoops, provocative perspectives and case studies. Nussbaum is at the center of a global conversation on the growing discipline of innovation and the deepening field of design thinking. Read him to discover what social networking works—and what doesn’t. Discover where service innovation is going and how experience design is shaping up. Learn which schools are graduating the most creative talent and which consulting firms are the hottest. And get his take on what the smartest companies are doing in the U.S., Asia and Europe, far ahead of the pack.

BW Mall - Sponsored Links

Buy a link now!