GE’s Immelt: “The richest people made the most mistakes with the least accountability”
In a remarkable speech, Jeffrey Immelt, the CEO of General Electric, gave the opposite of a Gordon Gekko speech yesterday at West Point, saying that the era of “greed and meanness” has come to an end in America.
“We are at the end of a difficult generation of business leadership, and maybe leadership in general. Tough-mindedness, a good trait, was replaced by meanness and greed, both terrible traits,” the head of the largest U.S. conglomerate said in prepared remarks to be delivered at the U.S. Military Academy.
“Rewards became perverted. The richest people made the most mistakes with the least accountability,” Immelt said. “In too many situations, leaders divided us instead of bringing us together.”
The financial crisis of the past 18 months, which hammered the Fairfield, Connecticut-based company’s results and last March briefly pushed its shares to 18-year lows, has changed Immelt’s approach to running the world’s biggest maker of jet engines and electricity-producing turbines, he said.
“I decided that I needed to be a better listener coming out of the crisis,” Immelt said. “I felt like I should have done more to anticipate the radical changes that occurred.”
This is the most wide-ranging apologia I’ve heard from anyone in the corporate world, so much so that I’m almost wondering if this is a Yes Men sketch. But no, it was reported in The Financial Times as well, with some additional quotes:
“The bottom 25 per cent of the American population is poorer than they were 25 years ago. That is just wrong,” he said. “Ethically, leaders do share a common responsibility to narrow the gap between the weak and the strong.” […]
Mr Immelt said business should welcome government as “a catalyst for leadership and change”.
These are all fine words, and all true. What’s less clear is what Immelt is prepared to do about it, and whether he’s prepared to engage the rest of his colleagues in the CEO community on these issues. GE has been taking the lead in renewable energy projects and promoting green tech, even returning to finance wind power. He wants to use the money from GE’s recent divestiture of NBC Universal to acquire more infrastructure firms. He seems to be emphasizing manufacturing over financial services, technology over service, exports over consumption.
If there were a culture of responsible corporate leadership in America, I think everyone would obviously welcome it. Of course, the corporate boards and the drive for stock profits and perpetual growth often out-shines whatever positive impulses come from the top executives. Still, it’s genuinely striking to hear a CEO say this kind of stuff out loud.