The Exchanges

Q You mentioned something there about domain expertise, which I think is interesting. GE was for most of your, your time there and the time before you, I think under Jack, it was known for generalist sort of management in place. And a lot of the businesses you'd be running plastics one day and aviation the next day. Well, what are your views on that now and how have they changed?

A What I always say is that I learned so much working for Jack, but the world changed very dramatically between the 19 nineties and the 2000 and beyond. And I think that there is a role for generalists, but it's harder to be successful in the world today, unless you're kind of deep domain, particularly technically, uh, the best CEO I had working for me in GE was the guy that ran the aviation business. He was great at the technology, knew the people, uh, he knew all the initiatives that the company was trying to drive, but he was just a really deep domain technical leader. And that was really what I was trying to groom and what I think is important today. If you look at Bezos, you know, Amazon's a conglomerate, but it's a software company. Google's a conglomerate, but it's an AI company, you know. Yeah. Walmart is huge. It's a retailer. You go, the companies that do well today are extremely deep. And I think to a certain extent, you know, not, look, we had a ton of good people, but we were creating perfect managers for private equity. You know, if you look at the basic GE toolkit that I grew up with, it was almost the perfect match for private equity where You took a company, you had five years to turn it around. You didn't have to make big bets on products and technology. And so I, I think to a certain extent, some of the people, uh, who left GE did best in private equity versus …

AI assessment note: “it's harder to be successful in the world today, unless you're kind of deep domain”

Q How did you go about personally learning while you were a CEO?

A I spent a lot of time, uh, networking. So there were five CEOs in the New York City area. It was me and Ken Chenault from American Express, Sam Palmisano, and then Jenny Romney from IBM, Steve Reimann, and then Indra Newey from Pepsi, and Bill Weldon, and then Alex Gorski from J&J. And we had dinner every quarter. We would rotate slots, and it was just kind of a lonely hearts club. And we'd sit around and talk about who's a good board member. How do you run your board meetings? How do you pay your team? Different things like that. That was great. And then I spent a lot of time, um, you know, when you run GE, everybody will see you once. So I would spend a lot of time off the beaten path, getting to know scientists and startup people and political figures kind of out of sequence. Like when I didn't need anything, like Mark Benioff was an early friend, right? When he was just starting Salesforce and I spent, you know, I'd go to California and say, you know, teach me about cloud computing and how do you view CRM and not do it at a big meeting, but doing it one-on-one over dinner. I spent a lot of time just seeking, seeking people out. That's, that's how you really learn. You've got it. You've got to be the initiator. You have to be constantly curious. You have to see people when you don't need anything. I mean, that's really, One of the secrets to life, you know, like everybody, w…

AI assessment note: “I spent a lot of time just seeking, seeking people out. That's, that's how you really learn.”

Q unions and so much more. It's time to listen and learn. Your legacy at GE is at best controversial. You made thousands of decisions impacting millions of people, often under extreme uncertainty and constant media scrutiny and second-guessing. You inherited a pile of shit following a cult-like leader and then steered the company through nine-eleven Enron and the financial crisis. What was the hardest part of your tenure at GE?

A Oh, gosh, the hardest part was really the financial crisis in that It was sheer fright for probably 60 or 90 days. You know, it was such a big company with so many people. There was so much going on. There was so much unknown. And I literally didn't want to go to bed at night because I didn't want to wake up the next morning because you just didn't know what you'd see. So I'd say for an intense period of time, Uh, that was the hardest stretch of 90 days I've ever had to go through. And then I would say following a very successful leader, but tripping into a completely different time. So it wasn't that he was bad or good. He was great in the time that he lived in. But the time that I was leading the company was so dramatically different. It was more global. It was more technical. There was more interest in social concerns. Activist investors. You go down the list and just taking a group of 300,000 people and saying, I know this is the way we did things. Now we have to do things differently. That takes persistence and add to it three black swan events and four recessions. It's just perseverance every day.

AI assessment note: “the hardest part was really the financial crisis in that It was sheer fright”

Q ever done that, especially about such a large company with such a long tenure. It strikes me that there's people that finger point during a crisis and there's people that do things and the overlap between those two groups is really small. I'm curious as to what you learned about leading in a crisis. What can companies take away from this? Today to prepare for future crises and do now.

A You know, good leaders absorb fear in a crisis. So they, they absorb all the things that are going on, but they don't point fingers and they don't point blame. They just kind of soak it all in. Uh, they're able to keep a flexible point of view and what I call two truths, which is great things can happen. Terrible things can happen. And you need to kind of keep your mind open to both those things at the same time. You know, really in a crisis, it's important for leaders to be great communicators. What is too much information? What's just enough? And then you want to be really observant to see who is with you. So, you know, in other words, Shane, I lived through the nine 11 and some people ran for the hills and some people were steadfast. By the time I got to the financial crisis, I pulled the people that were steadfast and said, okay, those of you that are going to run, you know, you, you're, you're not on the A team. The A team is people that were steadfast during nine 11, because I know I can trust them to kind of give me the truth. So that's on one side. I think the other piece of your question, which is a really good question and really important, which is how do you pick up those risks Really tail risks that are really enterprise risks for the company. And so one of the things that I, I get concerned with is, you know, if you pick up a, an annual report for any company or a…

AI assessment note: “good leaders absorb fear in a crisis. So they, they absorb all the things”

Q Can you double click on that a little bit and coaching people to make decisions? What are the patterns that you see repeated over and over again? The mistakes that people make or the, the patterns of success that you see?

A Yeah, I'd say, uh, the, the key points of success and failure are people need the right instrumentation. So they need to know what metrics, what analysis they need to see and what matters. So that's number one. They need to have a team, a core team that gives them expertise and wisdom, right? That's number two. And they need to have their own self-confidence to just pull the trigger. That's, that's three. And I say when I work with companies today, the first two are pretty easy to put in place, but I think it's, it's, it's, you've got to push sometimes leaders to say, just make the decision. I think in a crisis, maybe the time we live in today, maybe it's always been true, but I actually think it's a bigger mode of failure when people don't know, won't make a decision than when they make decisions and some of them are wrong. I weigh those two unevenly because I just think progress is more important than perfection. You don't make progress unless you make decisions. That takes a certain amount of confidence. So you're just going to have to make clear yes and no answers. But instrumentation, team, confidence, those three things. And then there always has to be feedback loops. You know, what, what did we learn? Why did we, why did this work? Why, why did this not work? Some people can only make a decision in private. They only want to make a decision. They'll say, okay, the meetin…

AI assessment note: “the key points of success and failure are people need the right instrumentation”

Q It's one of those things that looks great on the outside, but inside you knew it wasn't quite right. It's hard to drive change when your team and everybody feels like it's pretty perfect. And I'm looking back, I'm curious as to the lessons you learned. It seemed that you inherited a team of, of I don't know, sycophants and idol worshipers. How did you, how did you approach that?

A I tried to be directional, but I almost had to be incremental. So, you know, I think when you take over for somebody that's that famous, if you will, you have to say, look, here's where we're going. We're going to be more technical. We're going to be more global. We're going to be closer to the customer, but we're going to change step by step versus saying, I'm going to blow the place up. And, and we're going to start over. We're going to reset everything. And I think to a certain extent, Shane, you know, it, it kind of worked until the financial crisis, right? So I, you know, I wanted to pivot into being more industrial. I wanted to invest in healthcare and aviation and life sciences and, and, uh, uh, renewable energy and things like that. And that's what we were doing. We're kind of using the financial service cash to help fund some of those things. You know, our investors really all they recognized was kind of like earnings per share growth. So, you know, we were doing it in a language that they understood. The financial crisis really set us back in that context. So what did I learn? Look, I had a strong point of view of what I wanted the company to be. I stuck with that. I, in many ways brought the team with me, right? So the good people stayed and we were able to make that transition. I think we're rebuilding the investor base in a very positive way. But, you know, what I …

AI assessment note: “I tried to be directional, but I almost had to be incremental.”

Q Oh, that's awesome. What would you say is the most important lesson you learned from Jack?

A What Jack did as a masterclass was how to lead at scale. He created an aura. He had a voice for 300,000 people. He had a voice for 500 people. He had a voice for 20 people. He had a voice for one person. He, he could change octaves in how he spoke. He knew how to measure people to, to create success, so he knew how to instrument. He was a great communicator, and he, more than anything else, put human resources on the map. You know, HR was a backwater, kind of stooge-ish function in the 19 seventies and eighties. Everybody that got ahead in HR had been in union relations at a moment in time when, you know, professional workforces were exploding. And he really put, he really cared about people and the human resource side. And so you add all those things up, he could manage big institutions. I think better than anybody I've ever seen before or after.

AI assessment note: “What Jack did as a masterclass was how to lead at scale.”

Q I want to ask a follow-up to that before we do, I just want to ask, are there routines or habits that you had that helped you get through this like exercise or what were the things that grounded you throughout the crisis?

A I've always been an exerciser. So having, you know, trying to, trying to stay as close as you could to kind of a normal lifestyle. I always got energy off of forward motion. So I didn't want to have a thousand meetings and headquarters. I wanted to go out and do a town hall in Cincinnati or Atlanta and hear what's on employees' minds and console them and make them feel better. So I, I was always in a crisis believed in forward motion. And, you know, I never canceled meetings. Like I see people, the second you start canceling meetings, particularly in a big company, you worry 300,000 people. You say to them, man, we aren't, you know, we are really in trouble. And so you try to keep as much of a schedule as you possibly can.

AI assessment note: “I've always been an exerciser. So having, you know, trying to, trying to stay”

Q You couldn't help. I think in some of the research I did for this and work for Jack and not sort of respect him. And then there was a certain sort of, um, sadness, I think to the fact that he went on CNBC multiple times and sort of threw you under the bus. How did that make you feel?

A Yeah, it was a complicated relationship, you know, uh, Shane. So I would say he was a guy I loved and learned from. I ran the company in a different way. He wasn't always as supportive as I thought he could be, including that time on CNBC. But every time we had a very tough decision to make, I would always call him. Even after we'd had bad relations and bad words, when I had something really difficult that I wanted to think my way through, I would pick up the phone and call him and pick his brain. So, you know, like I said, it's a, it was a complicated relationship, but one that was, you know, at the end of the day, I, I had more respect for him, but I, I wish sometimes he had done things differently that would have been more helpful.

AI assessment note: “He wasn't always as supportive as I thought he could be, including that time”

Q Do you think that's intuition or is that something that you can learn? Like what, how do you navigate when?

A I think it's a function of information. So some people need too much information. Some people say, look, I have 80% of what I need and that's enough. So what I find is that different people distill information in different ways. And so you have enough information to make a decision. And then you try to balance other social factors, like if I don't move now, what happens next, and things like that, and you have to balance those two things. I hate to call it intuition because it sounds too squishy, but I think it's some combination of intellect, curiosity, and just comfort in your own skin that there's not one thing you can do and not be criticized, so you're not really in the game of perfection, you're in the game of progress. And particularly in a crisis, I see lots of leaders in a crisis Look for style points. You know, sometimes style points are survival. You're breathing. You made it to tomorrow. That's great, right? Therefore, if you get criticized, it just doesn't matter that much.

AI assessment note: “I hate to call it intuition because it sounds too squishy, but I think”

Q you, and then those filters are not only, um, intelligence filters, like you, you can't rely on somebody who's, um, to distill complexity into something simple, um, because they might make a mistake, but you also have political filters. I'm vying for a job. I want to look good. I'm in competition with this other person. How do you get to the bottom of things? How do you see reality?

A Some of it's culture, right? Some of it is empowering people that you trust. And hopefully if you empower people that you trust, then they empower the people they trust and it goes down, right? And, and, and you set a culture that works because people are empowered to make decisions. That's culture is one big piece of it. The other piece of it is you can't spend time in the office. You have to see things for yourself. So I always made it a point to travel. I would travel to businesses. I would travel to customers. I would travel to markets regions. And you would see from the ground up what was really going on, what was reality to the people that, that did work. And I became a good student of how people did their work. Right. It's not that I knew how to do everybody's job. But I knew how to watch how they did their jobs. And so I could get a pretty good sense, you know, over the arc of my career in terms of what was productive work and what was unproductive work. And so I think how you spend your time is incredibly important. There's some metrics that matter, like management layers, meeting times, you know, things like that, that you can manage an aggregate where it always leads to more bureaucracy than you want. And then I think you have employee scores and things like that. So I think metrics, time allocation, culture, and you've got to make sure that when you're a big company…

AI assessment note: “You have to see things for yourself. So I always made it a point to travel.”

Q How did the Warren Buffett deal come together?

A You know, so if you think about the book, Shane, it's like crisis, change, crisis, change, crisis. So that's kind of the, The arc of the book. So chapter five is about the financial crisis and, you know, Washington Mutual. So most people think about the day Lehman Brothers went bankrupt as the worst day in the financial crisis, but it actually was the day Washington Mutual went bankrupt, which was like two weeks later on a Friday because all the bondholders got wiped out. So that was a really bad day. And my CFO, uh, came in my office at like Friday at six o'clock and said, look, we got to raise. Fifteen billion dollars on Monday. And I just said, I don't know what you're talking about. You know, we just did this one, you know, these three things we should be safe for awhile. He said, look, I don't care what you think. We're going to do a board call tomorrow morning. Goldman Sachs is on its way out here to Fairfield. And so that set off a weekend where, you know, I had a board call on Saturday morning, all telephonically. So nobody was there. And I said to my board, Hey, Hey guys, you know, things are pretty shaky out there and we got to go raise 15 dollars on Monday. And you could just hear silence on the phone. Roger Penske, who was one of my favorite directors, he, he leaps in and says, let's get the money guys. Let's go. Let's go guys. Good job. Let's go get it. So we spent…

AI assessment note: “we spent the next, uh, 24 hours planning, and then Sunday evening”

Q I'm curious, one thing you didn't really go into much detail on in the book is unions. When are, when are unions a good thing? When are they a bad thing? Did they ever prevent you from doing the things you wanted to do? When do they help? When do they hurt?

A My father was a GE employee, so nobody ever had to explain to me. The value of a job, the value of a GE job, and I carried that with me really through my life. I always met the CEO, the union leader was a guy named Bob Santamore. I actually write about him in the acknowledgments of the book. I liked Bob. You know, in other words, you never could say I liked him out loud because it would get him fired and maybe me fired, but we spent a lot of time together, and what I liked about working with Bob was he was pure. He, he was solely about jobs and you could work with him on healthcare, other things, as long as there was some way you could demonstrate to him that we were willing to move jobs to help him out. And we did some, you know, not hugely, but we did the ones that matter. And so I think, look, if you had asked me this question, 15 years ago, or even 20 years ago, I would say, you know, I was trained to say you, you're terrible. And if you're a plant manager, And you get unionized in your plant, you're probably going to get fired. In some ways there hasn't been enough texture, enough context around working men and women and how important they are and how they should be treated. And to a certain extent, we're all paying the price for that right now.

AI assessment note: “what I liked about working with Bob was he was pure. He was solely about jobs”

Q will. You said in the book, you're a trust me company until you're not. And I'm sure that's a powerful lesson when you're dependent on the kindness of strangers. Looking back, how do you feel about balance sheet management and fragility? How do you consider the need to keep up during the good times and balance that, which might mean carrying more debt with playing offense through the entire cycle?

A It's a great question. So part of your question is transparency. There was a time particularly early on when investors invested in our company, but didn't really know what they were investing in. So, so after nine, 11, our biggest shareholders sold half their stake when the markets opened after nine, 11. And the reason they told me is they didn't realize how big we were in the insurance business. You know, you kind of said, well, that's not my fault. That's really your fault, or it is my fault, but it's both of our faults. And You know, that's, that's, that's an element of transparency. So one of the elements is making sure people know, outsiders know what they're investing in and why they're investing. And then, and then to your point, I think, you know, the notion of not redlining in the good times and trying to be as thoughtful as you can pot, you know, striking the right balance between growth and safety is something that is an art. It's something that's important. You know, you, you have to think about that all the time.

AI assessment note: “striking the right balance between growth and safety is something that is an art”