Deming Cup 2017: Jeff Immelt

Wow, Ken, thanks. I'm frequently asked who I admire in the business world, I always start with Ken. He's been a great CEO, a great friend, and just somebody that I love and respect. Shelly, same to you. A better partner, a better friend no one could ever ask for. And I just love you, and it's great to be with you. Thanks to Columbia and the Deming Cup selection committee. I'm honored to be here. I'd also like to congratulate Arnie. In 2011, I was a part of a delegation of CEOs who were kinda sent over to the Middle East to really decide how we could help rebuild after the Arab Spring. And Marriott was part of the delegation. I could see first hand the great respect people had for Arnie and for Marriott in terms of the role they play in spreading commerce around the world. So I am truly honored to be here with Arnie tonight. It's wonderful to be with all of you. As Ken said, it wasn't hard to make the time. I retired from GE a couple of months ago and you can't see behind the podium, but I am actually sweatpants tonight along with my suit. But I'm totally honored to accept the award. A lot of people, many of them my friends, people like Steve and Ken and Indra, Dave Cody, have received the award, so it's really a privilege to join them in this endeavor. I was thinking about Edward Deming, I was thinking about the award and what it stands for and what it means to receive it. And a lot of wonderful memories came to mind over my 35 year career with GE. But the one I share with you tonight isn't from my time as CEO. It's really from the time when I was just starting out with the company as a 32 year old kid. In the late 1980s, GE introduced refrigerators that turned out to have faulty compressors. They would all fail after a certain amount of time. And that's how I was actually in the plastics business. I had nothing to do with appliances. But my predecessor, Jack Welch, decided he wanted a fresh set of eyes, so he brought me in. And we quickly discovered that the compressors were made of the wrong material. And that meant they all needed to be replaced, all three million of them. And I'll never forget going to headquarters as a 32-year-old to report to Welch and some of the others about what we'd found. And eventually I broke the news to him, that the write-off was gonna be in the neighborhood of $500 million. Now I expected some tough questions. What I didn't expect was for Jack to let out a blood-curdling scream at the top of his lungs. And I went home that night and said to my wife, honey, I think I need to get together a resume. And also some clean underwear. Well, I didn't get fired, but a bunch of other people did. And then it became my job to fix the problem, which meant finding a way to repair more than three million compressors. It was my first real taste of what operational excellence demands. Now, one element of what we had to deal with was purely arithmetic. How quickly could we repair a compressor? How many repairs could a technician make in a day? But answering those questions required all of us to get our hands dirty. We needed to understand everything about the repair process if we're gonna figure out how to do it three million times. So I learned how to fix compressors myself. And I would go into people's homes and work alongside the techs. And I learned what was required up close and personal, but at the same time, we were sending a message to the technicians that we're all in this together, because we really were. And in the end, we fixed all of them, all three million. It was probably the best job I could ever have to get me ready for the kinds of crisis I would deal with later in my career. It was the first time I had truly internalized what operational excellence really looks like. So this is a long way of saying that this prestigious award you've honored with me tonight reminds me of broken refrigerator. But it's often the details of execution that matters the most. GE turns a 125 years old this year, we remain the only original Dow Jones Industrial company still in existence. What makes a company endure for so long? We've weathered cycles, we haven't always been perfect, but we've never lost the determination to create our own future. We live in a time of awesome change. Relevancy of a company depends on leadership. And in many ways, the teachings of Deming really helped to shape GE. A few Deming quotes. Deming said, profit and business comes from repeat customers, customers that boast about your product or a service and that bring friends with them. He's right. One of the things I'm most proud about in GE is our relationship with our customers. We have a $325 billion backlog which has grown $200 billion in the last decade. We have record high market share. Our customers trust GE in good times and bad and we deliver for them. And this is true around the world. We're a global company today and will be in the future. When I became CEO, 70% of our revenue was inside the United States. Now, we have almost 70% of our revenue outside the US. We're proud American company that's winning around the world. Deming said, the climate of an organization influences an individual's contribution more than the individuals themselves. He's right. Good companies are all about culture and collective strength. We reward our leaders not just for how they performed for the company, but also for how they perform for each other. And we know that this company works only if each business, each function, each person is committed to the same cause, and takes care of each other when times are tough. That's how we build trust. We demand accountability, transparency, and self-evaluation, and view it as a moral commitment. And performance has to be matched by purpose. We're working to cure cancer, to clean the environment, we're growing in China and Africa. Our products build, power, move, and cure the world. And Deming said, if you don't describe what you're doing as a process, you don't know what you're doing. He's kind of right about that. But rapid technical innovation today and artificial intelligence, analytics, robotics, are transforming really our industries and our lives. In the future, productivity is gonna be driven as much by technology as is by process. So it's important for companies like GE to invest to build out leadership, and analytics, and AI, additive manufacturing and learning. These are our big bets for the future, and here we wanna lead. So we're committed to go on this journey wherever it will take us. I think process, I think what Deming would recognize that process in this era, is not enough. You have to add innovation, technology and risk taking to one in the future. So today leaders need the foundation of Deming and they have to adopt them to this high tech world. And I think people what I would call fusion leaders, they're competitive and empathetic. They know how to be big and fast. They know how to be digital and industrial. They know how to be US based and global. And these are the people that will ultimately succeed. So with that in mind, I'd like to close with mentioning something in this rotunda that you might not have noticed. I've had the chance to speak here several times, and if you look above, there's these four amazing statues who are philosophers. One of them is Demosthenes, he's the good looking one up there. And he once said small opportunities are often the beginning of great enterprises. Among other things, I think that makes him the godfather of business books. But there's a corollary I'd like to add. Once you build a great enterprise, it's the small details that keep it great. It's precision, it's efficiency, it's best practice-sharing, it's knowing that one person at a time helps drive operational excellence. And ultimately, it's these people, these wonderful people like we have at GE that determine our ability to compete, especially in this volatile era. I hope this is something that we're instilling in our future leaders like the ones here at Columbia because the volatility is not gonna go away. And for the record, neither is my optimism about the future of our company, or the country, and its ability to compete and thrive in the future. Thanks again for this great honor. I'd like to thank Ellen, and Keith, and Ken for all of their friendship and support. Ellen and I started at GE at the same time. Keith was my CFO for 15 year. If there is a job that's tougher than being CEO of GE is being CFO of GE. Ken, a great friend, Shelly, a great supporter and friend. I'm really blessed to have so many great people in the room tonight. Arnie, congratulations and thank you very much.