GE's CEO Jeff Immelt says ideas are key to success in slow-growth world

By Linda Myers

Early in his Hatfield Lecture April 15, Jeffrey Immelt explained how he answers the question he is asked most often: the difference between himself and his predecessor at General Electric Co., long-reigning CEO Jack Welch. "I tell people I'm 20 years younger and it's a different day," said Immelt.

Jeffrey Immelt, chairman and CEO of General Electric Co., delivers the Hatfield Address, April 15. Robert Barker/University Photography

Just how different, and what those changes will mean, was the subject of his talk to a standing-room-only audience in Call Auditorium. But while his message as the 2004 Robert S. Hatfield Fellow in Economic Education was hard-driven, his communication style was anything but. Speaking entirely without notes or slides, Immelt, who is 48, was relaxed, warm, friendly and, at times, self-effacing -- joking, for example, that if the audience knew his college grade in economics, they wouldn't listen to him.

He started his talk with the good news: an improved economy, strong consumer spending, low interest rates, a stable credit market. Then he noted that none of it was relevant to how to run a company in the global "slow-growth times" ahead that will produce clear winners and losers among countries, companies and universities.

"No country in the world has enough jobs," Immelt observed. "There's too much global capacity and not enough great ideas." In such an environment, where the world is less stable and resources are getting more scarce, "the tide isn't going to raise all boats in the next 10 years, so every company has to make growth their primary charter," he said.

Companies that seek to compete and grow will need to rely more and more on technology and ideas to innovate, Immelt said. "Without innovation, you can't survive. Without it, GE won't see the next 100 years and Cornell won't be the great university that it is today."

In one of GE's strategies, which Immelt termed focusing on "people and processes," the company is tearing down its much-imitated model of the "professional manager" and replacing it with a "culture of productivity" that can generate dollars to be reinvested, he said.

It also is making some bets. "Businesses I want to invest in," he said, "have a base in technology, direct interface with the customer, a global foundation, multiple revenue streams so we can grow through the cycles and great capital efficiency so we can reinvest through the cycles."

Innovative ideas that will drive continuous growth will come from such areas as molecular medicine and nanotechnology, where, Immelt noted, Cornell already is a leader. Advances in those and other areas will make affordable, effective health care and health care-related products a growing area, he predicted.

Immelt plans to leverage his company's size and ability to invest in small but promising ideas and, he hopes, take them to big places. In addition to leading a team he has chosen that values innovation, Immelt personally tracks about 40 projects that he calls "imaginative breakthroughs."

Immelt praised the university as a resource for the kind of people GE likes to hire. "We've gotten good value out of Cornell people," he said. He characterized Cornell graduates as self-confident, passionate about learning and competing and skilled at working in teams. In the new business environment, he said, GE will seek people who know how to live in any part of the world, engage suppliers and partners, keep their antennae up for trends, take risks and try new things. They also will need to have imagination. "In some ways, we've beaten imagination out of ourselves," he said.

In the question-and-answer session that followed his talk, Immelt confessed that the subject he hated most in business school was organizational behavior, because he thought it was too "touchy-feely." He added: "Now, that's most of what I do."

Immelt was introduced by Cornell President Emeritus Frank H.T. Rhodes, who noted Cornell's long association with GE, with 54 Cornell graduates joining the company this year. He also mentioned that Immelt's last visit to campus was in 1976 when, as an offensive tackle on Dartmouth's football team, he helped rout Cornell's team 35-0.