Fortune’s unnamed judgment of Jeff Immelt
I am writing this to push back on an unfair article. So I want to state my bias up front: I believe strongly in GE and GE people, both in the past and in the future. That includes Jeff Immelt.
This week Fortune published an under-reported and unbalanced article on “what the hell happened” at GE in Immelt’s 16-year tenure as CEO.
The piece is filled with finger-pointing from people not confident nor courageous enough to have their names associated with their claims. Ten people are quoted negatively about Immelt and GE. Only two are named (Wall Street analysts); seven are unnamed former GE executives and one is an unnamed GE vendor.
This near-total reliance on unnamed sources prevents Fortune’s readers from understanding the relationships of these sources with Immelt. For example, were any of the unnamed executives dismissed from GE by Immelt? Did they work for GE recently or years ago? Plus, if they were members of Immelt’s senior leadership team, aren’t they, in effect, criticizing themselves?
Before the article was published, I questioned the fairness of using anonymous sources to disparage someone. More specifically, I asked Fortune why these sources needed the protection of anonymity. After all, Immelt no longer has any influence over them. The author of the piece, Geoff Colvin, responded that the quoted nameless sources corroborated things he heard from other nameless sources.
Fortune also mentions unnamed former GE directors in a list of sources it spoke with. By contrast, a recently retired GE director provided Fortune with an on-the-record statement, but Fortune did not use it. Marijn Dekkers, chairman of Novalis LifeSciences and former CEO of Bayer and Thermo Fisher Scientific, wrote:
“For the past six years as a GE director, I was impressed by Jeff Immelt’s ability to pick the right strategies for a company in transition — globalizing, exiting finance, leading the industrial world into the digital age, and more focused initiatives such as expanding into life sciences. GE must improve its performance in its biggest business, Power, but no one can doubt its leadership in essential industries with strong market share, advanced technology, and excellent customer relationships. This is the result of a long-term growth strategy that has placed GE ahead of its competitors and positioned it well for the future.”
In addition to veiled sourcing, Fortune does not quote any current GE executives (other than past public statements from CEO John Flannery), nor examine any issues that impacted GE during one of the most volatile economic periods in recent history. This includes the role of activist investors, two recessions, and the revaluing of financial businesses after the global financial crisis.
Most remarkably, Fortune lays the enduring problems caused by GE Capital solely at Immelt’s feet. In doing so, it points to the growing percentage of GE profits from financial businesses (vs. industrial) in his first six years as CEO (peaking, by the way, in 2007 when GE was Fortune’s Most Admired Company). This simplistic argument fails to account for the strong industrial economy of the 1990s and the worldwide industrial slowdown that erupted early in Immelt’s time as CEO.
Also, Fortune fails to note that none of the GE Capital insurance and reinsurance acquisitions that continue to plague GE today were made during Immelt’s tenure. In fact, Immelt’s sale of Genworth early in his tenure likely saved the company during the global financial crisis.
Fortune ignored many other facts (see below) provided to it in three areas where it claims “things went wrong:” capital allocation, culture, and execution. Two examples:
· Fortune rips Immelt’s acquisition record but does not mention his best deals that built GE’s Healthcare and Aviation businesses into undisputed market leaders.
· Fortune says GE’s leadership culture “deteriorated.” It fails to note that Immelt rebuilt and modernized GE’s famous “Crotonville” leadership development capabilities, that involuntary turnover during his tenure was less than five percent and that GE has been consistently named as a best place for leaders.
Colvin is a respected journalist. He was well-known to GE in the 1990s, but he has not met with Immelt in more than a decade. In that time, GE was transformed from an amorphous financial-industrial conglomerate into a focused industrial-digital leader. It became a global enterprise, building record market share in Power, Aviation, Healthcare, Oil and Gas, Renewables, and Transportation. It became the leader in the internet of things and additive manufacturing and continues to be recognized as one of the best companies for leaders and one of the world’s most ethical companies.
GE has problems, no doubt, but Fortune has not done a fair assessment of the company today nor how it got here.
Gary Sheffer is a communications consultant and the former head of communications at GE. He is a spokesman for Jeff Immelt.
