July 7, 2021

Business Beyond Buzzwords

Business Beyond Buzzwords

Augmented reveals the stories behind the new era of industrial operations, where technology will restore the agility of frontline workers. 

In episode 42 of the podcast, the topic is: Business Beyond Buzzwords. Our guest is Jeff Immelt, Venture Partner, NEA, former CEO of General Electric.

In this conversation, we talk about Jeff Immelt's new book Hot Seat, running a top tier manufacturing business, industrial tech, the impact of globalization, plant innovation, workforce training, global supply chain, virtual cloud connected value streams and what it is possible to do today and what was very difficult even a few years ago with the myriad of non-integrated enterprise IT and ERP systems and other challenges. Lastly, we discuss how industry will evolve in this decade.

After listening to this episode, check out NEA, GE, Jeff's book Hot Seat as well as Jeff Immelt's social media profile: 

Trond's takeaway: Jeff Immelt's brave, honest, and wise book is unusually revealing and instructive. Jeff has shared not only how lonely it is at the top, but seemingly how few big choices and at times how many smaller choices you have at any given time. His struggles with industrial tech are near timeless. Nobody has all the answers in terms of getting organizational implementation of exponential tech right. Especially not if your organization is the size of GE. I was struck by the implication for leaders--be vulnerable or risk not only your own happiness but those of all your co-workers. Immelt's struggle was to digitize GE, a behemoth in transition. He chose to build an in-house capacity, at great cost, and with mixed results, but how many other options were there on the table? Hindsight is 2020. As Immelt points out, nowadays, low-code and no-code systems, such as Tulip, are about to transform frontline operations in ways we can only start to imagine. The promise is empowerment of workers and immense productivity gains from freeing up the human mind. Our challenges might, at times, seem or indeed be smaller in scale, but might feel equally overwhelming. Good to know then, that the folks at the top struggle as well. 

Thanks for listening. If you liked the show, subscribe at Augmentedpodcast.co or in your preferred podcast player, and rate us with five stars. If you liked this episode, you might also like episode 21, The Future of Digital in Manufacturing with Çağlayan Arkan, VP of Manufacturing Industry at Microsoft, episode 32, Covering Industrial Innovation with Amy Feldman, Senior Editor, Forbes, or episode 27, Industry 4.0 Tools with Carl B. March, Director, Industry 4.0 at Stanley Black & Decker.

Augmented--industrial conversations that matter.

Transcript

#42_Business Beyond Buzzwords_Jeff Immelt

[00:00:00] Trond Arne Undheim, host: [00:00:00] Augment, it reveals the stories behind a new era of industrial operations where technology will restore the agility of frontline workers. In episode 42 of the podcast, the topic is business beyond buzzwords. Our guest is Jeff Immelt  venture partner at NEA and former CEO of general electric or GE in this conversation we talked about immelt's new book, hotseat running a top tier manufacturing business, industrial tech, the impact of globalization plant innovation, workforce training, global supply chain virtual cloud connect. Value streams and what is possible to do today and what was even difficult a few years ago, the Marriott non-integrated and to price it and ER, ERP systems and other challenges.

[00:00:53] Lastly, we discussed how industry will evolve in this decade. Augmented is a podcast for [00:01:00] leaders hosted by futuristsTrond Arne Undheim presented by Tulip.co  co the frontline operations platform and associated. Mfg.works. The manufacturing upskilling community launched at the world economic forum, each episode dives, deep into a contemporary topic of concern across the industry and airs at 9:00 AM.

[00:01:22] Us Eastern time, every Wednesday, Augmented the industry 4.0 podcast.

[00:01:30] Jeff, how are you today? Good.

[00:01:31] Jeff Immelt: [00:01:31] Trond good to see you.

[00:01:33] Trond Arne Undheim, host: [00:01:33] I'm excited. So you've you've written a book. I've read the book. I know quite a few things about you. I would say, I don't know, unusually open for a business book. You shared some things. I know you have a tattoo. That's cool.

[00:01:47]Jeff Immelt: [00:01:47] I think I never really set out to write a business book.

[00:01:50] I think so I decided to write one really, for two reasons. One is I was just unhappy with the narrative around the company and I felt like a [00:02:00] more complete story needed to be told..

[00:02:02] Trond Arne Undheim, host: [00:02:02] Yeah. You, you did tell that complete story. I want to start a little I guess earlier in, or early in that story.

[00:02:10]There are many things to talk about with you, you started as a mathematician and the reason I know that is not just, that's public knowledge, but you brought in, various theorems in the, in, into this book and and stuff. So that was cool. And then you went to Dartmouth and you were a football.

[00:02:24] Jeff Immelt: [00:02:24] Yeah, I think, like I described myself as a combination of a math nerd and a football player, so I always like problem solving and I always very much appreciated that approach to really everything I did in my life. But I also like team sports and, in some way, shape or form, most of what I did in my business career was around those two things.

[00:02:45] Solving problems and building teams and yeah, I would say I wear both those hats. I try to wear both those hats almost.

[00:02:53]Trond Arne Undheim, host: [00:02:53] One of the things you said is you talked about this existence theory in mathematics, which was interesting. You said, it's a, [00:03:00] it's something that helps me clear off whether this can be squarely put in a box essentially or what was that about?

[00:03:05]Jeff Immelt: [00:03:05] I think, I always talk about leading with. So I think it's important, particularly today you just can't walk in the office every day and just say, I don't know, or it's too hard or I'm confused or there's too many data points. So you basically take data and you put it into an existence therapy.

[00:03:24] Like globalization is good or China's important, or digital transformation is important, or this is unimportant or things like that. I talk about leaders having a point of view. And I call that an existence there where you try to determine which things are true. And which things need to be proven in which things are true.

[00:03:41]And that's what I discussed in that.

[00:03:42]Trond Arne Undheim, host: [00:03:42] We'll get into some of the meat of the book, but there were so many little things there. I love your phrase, CEO in waiting, being a crown prince for too long is frustrating. And you now know what that is like.

[00:03:53] Jeff Immelt: [00:03:53] Look, I think it's really, regardless of how much you think you can prepare. For [00:04:00] perfection or for transitions events take hold. And I'd say it's more true today than any other time. Basically I went through a very public succession process and literally two days after I took over the world changed forever. And then we've just had wave after wave of change as time goes on.

[00:04:18] So I think you basically hire people for how fast they can learn, not what they know. And you hope they just have time to, to find their way.

[00:04:26]Trond Arne Undheim, host: [00:04:26] One of the things you said was that you took over a company or inherited from Jack Welsh, a company, obviously with strong culture and a lot of people in America.

[00:04:35]To that point, your subtitle is what I learned from leading a great American company. There's a lot there about America and GE that's that I think we could explore, but you said something, we had run out of ideas. That's a very strong statement about a company that most people would say are a pinnacle of American business.

[00:04:54] Jeff Immelt: [00:04:54] Yeah, look, I think my successor was a great leader. I've always, and today look, [00:05:00] regardless of where the company is. I always think it's either great or has potential to be great. But if I said, look, if I said to you, look here, we are in 2001. And we have no digital strategy.  That's yet the next 20 years are only about a digital strategy or only about a transformation of industry.

[00:05:20] That's what I meant. It wasn't that, we had great people and we were strong and hit a good balance sheet and all those things, but I think. We had run a play for so long and really what changed was the world. So that's really what I refer to, spending five years doing six Sigma versus spending five years looking at each one of our business lines and saying, okay, this is what we need to insource from from a new technology standpoint or here's how we need to position ourselves in China and things like that.

[00:05:52] Those are two different management cultures.

[00:05:56] Trond Arne Undheim, host: [00:05:56] Yes, they are. And I guess I wanted to [00:06:00] talk at length, obviously bought industrial tech and the digital part is such a big component of that and certainly for you and for GE. What happened to GE though was, and I'm scratching my head as I read this book, which by the way, I also I, it was a great book because you are honest enough.

[00:06:19]Of course, you are defending some of the moves you made, but you're honest enough that the reader, who's not a CEO can really start empathizing with the role. And one of the things that I scratch my head. When I read the book is a kind of thank you a right so many times, and I don't understand how it didn't well, on the digital front specifically, I don't quite understand why it didn't go your way in the sense that you had hoped.

[00:06:47] So if I'm correct here, you tried to create this industrial it powerhouse. And you chose the strategy of building it internally. Let's start with that. Is that [00:07:00] something that you would have done now or would you have done it differently?

[00:07:03]Jeff Immelt: [00:07:03] So just going back to the way you started the question, an email yesterday from a well-known CEO who said, thank you for writing the book, no one ever rushed a book about what the job is really this is the first time. So just the preamble look, it starts with the market Trond, in other words, For us, how the installed base works and the service earning stream in revenue, that's existential for a company like GE.

[00:07:31] So when I started in like 2008 or nine, it was really about protecting our franchise from a standpoint of how our assets. In our customer's operations, right? How a jet engine or a gas turban, and increasingly it's, it was obvious. Then it's even more obvious now that was about data and analytics and building, edge technology and software and things like that.

[00:07:55] So that's kinda how we started. Now if you go back in those days, we were early and there were [00:08:00] really no companies to work with. It wasn't like Microsoft wanted to do it or salesforce.com and those days they were busy doing.

[00:08:07] Trond Arne Undheim, host: [00:08:07] Yeah, I was going to say, everyone says, oh, you should have partnered with Microsoft.

[00:08:10] And I just had, chalet on here. And I'm sure he would have loved to partner with you except he wasn't around, there wasn't a Microsoft for Manufacturing and you were doing

[00:08:20] Jeff Immelt: [00:08:20] there was nobody to work with. So we just started building it ourselves. We started building apps that we could sell as part of our service business.

[00:08:28] And then it became apparent we needed to build a platform. We recruited people from Amazon and all the big tech companies. And so by like 2013, 2014 we had predicts and we were beginning to get customers and by 2016, look, we had 4,000 customers and, times two developers. So we were building a franchise, but I think one of the things I talk about in the book is we were early, and sometimes it's as bad to be early as it is to be right. And one of the [00:09:00] things that I should have given more thought to was what it would take to tread water, right? What would it take to tread water?

[00:09:09] And in order to tread water, we needed to partner with somebody. We needed to create a different currency and we needed to partner with somebody like a Microsoft by 2015, 16, who would have given us staying power. To make it to the final point and I think sometimes about, autonomous and what Mary Berra did at GM of, she owns, I think they own 30% of cruise, they could never do cruise on their own balance sheet ever. She knew that was smart whether it takes a decade or 20 years for autonomous to happen, she's got a marker on the table. And so I think that's one thing, legacy company have to solve for is the impact of time, how to tread water when your investors aren't really aligned with what you have to do.

[00:09:56]The thing is existential. So today Trond, I sit in Silicon [00:10:00] valley, look, there's a hundred companies trying to get G's installed base using software, hundreds of them. And so it's finally here and To a certain extent we pulled back to some because the efficacy of the idea was always quite strong.

[00:10:17] And when you're a legacy CEO, you've got to figure out a way to travel.

[00:10:24] Trond Arne Undheim, host: [00:10:24] I want to talk about startups a little later, but let's hit on industrial tech first, because I want to, I want you to explain how you define industrial tech and w at least what you did, when you were in the hot seat there?

[00:10:37]I noticed so this is page 65 in your book, you talks about different types of technology. You say vertical, horizontal. Financial technology and they have different roles in the corporation. And I get that and that's again where I scratch my head. Cause I it feels like you had a grasp on what that was.

[00:10:54] The organization had a handle on it all three of them. How? So yeah. So [00:11:00] what do you think industrial tech means in, in a company like GE?

[00:11:04] I think

[00:11:06] Jeff Immelt: [00:11:06] it's a combination of the use case, which in our case, Is we make things and we service things. So understanding factory workflows and how assets operate in Saudi Arabia or Brazil or things like that.

[00:11:21]That's our use case, let's say. And then what we did Trond is we mapped emerging technologies. Against those use cases, right? So we mapped robotics, automation, AI, additive manufacturing. And we say, okay, what do we make? What do we buy? What do we partner in?

[00:11:41] And then what we try to do is do them horizontally inside the company because why be a conglomerate, unless you can do things from one division to another. And so the two places we decided to invest was in, the analytics [00:12:00] around asset performance management services and additive manufacturing on the factory floor and on ILEC robotics, there are better people than we are to do robotics.

[00:12:10] They're better people that we were to do automation. They're better people, so in other words, We had a playing field that we felt played to our strengths, which was used case and could be spread across across the company. We may be talking about this later, I think on the service side, on that yeah.

[00:12:27] Performance management, we had the definitive use case, and out of the thing you fracturing, if you go back to 2016, we had more parts in production than any other person on the planet. So we had the use case. It's funny now, Trond, I sat on the board, both desktop metal and form labs.

[00:12:47] These companies, they don't even think GE or Hewlett Packard are competitors. Now I sit on the other side, it almost hurts my feelings sometimes.

[00:12:56] Trond Arne Undheim, host: [00:12:56] I love this discussion here. You're the head of the biggest company, or you [00:13:00] are the biggest company on the planet, in the industrial space and these startups are you not even thinking about you?

[00:13:06] Jeff Immelt: [00:13:06] It's still on my side. I say we should be able to squash these guys. We should be able to and on their side, it's now, so basically that's how I thought of industrial tech and that's what we did about it. In the late 1990s,I was running a healthcare business and it was the ultrasound business was very similar to let's say additive manufacturing.

[00:13:26] You had a bunch of small players and over the course of 10 years, we won, gE we either acquired. Or we out competed all the small nimble guys. So I always had it in my mind that we could do that right when we put our mind to it. But I'd have to say sitting on the other side now, that's not the way it's happening.

[00:13:49] Trond Arne Undheim, host: [00:13:49] So that's funny. Let's talk about this a diet Sonics of INMED the Ultracet acquisition. That was your first acquisition. This takes us all the way back to 1998. And [00:14:00] for me as a Norwegian, it's funny that you describe in the book, this is early in the book and you say you, you were about to acquire this thing and you had to fly over there and you got to the corporate headquarters in here.

[00:14:10]I think I'm in a shed.

[00:14:11]Jeff Immelt: [00:14:11] We go to Horton, right? So we go to Oslow. Then we drive to Horton. We stay in this little crappy hotel we go the next morning, I'm with my CFO, we pull up in front of the place and I say, mistake, we must be lost. But I learned something really important.

[00:14:30] This is going to sound like a advertising line, but the people were so it was completion of people from Norway and Israel. People were awesome and they, the Oslow engineers had all been trained in university to be cardiacs and buffers. So they were deep domain and Israel was the same way.

[00:14:49] And over the course of 20 years, this became probably the best acquisition, I ever did, but it certainly didn't start that.

[00:14:59] Trond Arne Undheim, host: [00:14:59] Wow. [00:15:00] Speaking about startups, when you are a large company, you have all these choices, obviously you can like you did the with your digital effort, you can incubate it in-house.

[00:15:08] And it's going to be more expensive and, if you, but if you succeed it's, bread inside and it follows your culture and then you can acquire which you did and all companies do and some of them are, some companies are better at acquiring. It seems to be a it's own skill.

[00:15:22]So we can talk about that if you want to, but it seems like gee how had hits and misses there, but then you can. Plain old invest in startups and GE ventures, which was during your tenure, really did that quite successfully. And that was another head scratcher. I guess this was after you left, here we are looking at what the industry, the CVC industry was looking at, a very successful corporate venture fund from the outside.

[00:15:47] And I knew people in there and they seemed happy enough, I didn't have any internal knowledge, but, and then suddenly it gets sold off.

[00:15:54]Jeff Immelt: [00:15:54] Look, I think so really now, I've had four years [00:16:00] of venture and, there's so much innovation going on. I don't understand any big company that wouldn't have some tentacles in either Boston or New York city or Silicon valley, just because there's so much going on. To your point, you need a multitude of strategies build or buy or partner because you just don't know when you start, in other words, If you go back to 2010, if I thought we could have successfully acquired a software company, I would have done it, but who would it work for and how would we measure it and what would we manage and how, we just didn't know what we didn't know.

[00:16:39] So I looked at it and said, look, we've got to build some foundational talent first. We've got to build a little bit of foundational capability first and then decide, do we want to do some acquisitions? Do we want to do we want to invest in companies and what direction we want to go?

[00:16:55] Trond Arne Undheim, host: [00:16:55] No, and I hear you, but you did do the opposite of what you I think you didn't [00:17:00] write so much about it in the book, but I know you were an entertainment also at GE, which is astounding to me but anyway, Bob Iger at, at Disney did the opposite thing.

[00:17:07]But Pixar you, Marvel and all of these assets that were essentially startups. There were Hollywood startups, but they weren't really earning revenue the way an industrial or the way a large company would calculate revenue. They took massive bets,

[00:17:23] Jeff Immelt: [00:17:23] I think Disney. So again, just, we're shifting around by 2015, we acquired a service Mac.

[00:17:28]We did three or four acquisitions in software once we had a foundation. And I would say, look, Bob, I think Bob did a great job and did some, a number of things, but yeah, no, look, I think we pull the trigger when we felt like we had enough capability that we could really run it or add value,

[00:17:45]Trond Arne Undheim, host: [00:17:45] But going back to then to, to industrial . Is it running a large industrial company? Is it different than running a Disney or running's, any other large company, is it so complicated that you necessarily have to [00:18:00] have so many more internal tie ins and and assurances is that  why this kind of acquisition gay men and startup gating gets complicated or is there another one?

[00:18:11] I think it's always a complicated balance between X and I talk now about a big multi-business company, which is what GE was. Multi-divisional things like that. It's between how do you get enough experimentation? How do you create small teams that are experimenting and still give it a sufficient scale to be able to take advantage of your size, right? So that it's not, buried inside a company and it never becomes something that has the potential to scale. So I would say, Amazon does that well some of the big, the bigger tech companies are beginning to really do that well, but that's the balance you run, which is experimentation on one side, along with I had 45,000 salespeople in [00:19:00] 180 countries.

[00:19:01] That's a huge advantage. Right? Most entrepreneurs would kill for that. But they don't want, they don't want the complexity. They want all the good things and none of the bad things. And the trick when you're CEO of a big complicated company is how do you maximize the potential without bearing people in the bureaucracy?

[00:19:20] Jeff Immelt: [00:19:20] And sometimes we did extremely well. Like I would say go back to your ultrasound example in Horton. That was an example where we did that extremely well life sciences extremely well, renewable energy, extremely well. Balancing small and large digital, not so well there, there are times when we didn't do it.

[00:19:40] Trond Arne Undheim, host: [00:19:40] What does it boil down all the way to timing? Because you, you said in your book that knowing what to do is often easier than knowing how to do it. And I guess also knowing when to do it those the house and the whens is they're really much more complicated questions then even just taking out a direction and saying it's gonna all go digital.

[00:19:58] You can say what you [00:20:00] want, in the seat,  what are the decisions you're really making

[00:20:03] Jeff Immelt: [00:20:03] very look very much. I sometimes think particularly with GE digital, if we'd started later, if we had partnered earlier with again, pick a Microsoft or something like that, it'd still be a vibrant asset today. But we started earlier we probably did too much alone. And that's why it didn't work the way I wanted it to.

[00:20:22]Trond Arne Undheim, host: [00:20:22] But you started in 2015. Still

[00:20:26] Jeff Immelt: [00:20:26] 2009, the Trond we started GE digital in 2000.

[00:20:31] Trond Arne Undheim, host: [00:20:31] Okay. It's just that it didn't become a separate unit. So yes, it's late, but how do you explain that you walked into to do the hot seat and there was no digital strategy to speak of which you have implied.

[00:20:43] Why did that happen?

[00:20:44] Jeff Immelt: [00:20:44] Look, we were a 50 PE company that was 50% financial in 50% old line industrial, it wasn't in the doc, the.com bubble burst. And everybody said, [00:21:00] those are just BS businesses. Anyhow, right now, not as good as the insurance business or things like that. Yeah. Look, hindsight's always 2020.

[00:21:08] I talk about this, as in the book, I'm more critical on myself than I am on anybody else, but I just think it's always good. Every company, large and small has to have, I have a window on the future and has to be really thinking very seriously about, and I see it even today that lots of companies really don't take seriously, all the disruption that's underway.

[00:21:34]Trond Arne Undheim, host: [00:21:34] What has your experience being a bandwidth hot seat and being so honest? Has that only been positive response or do you feel like opening yourself up in this way? Does it it must hurt a little bit, sometimes here's, nobody's who's writing things and they suddenly have ammunition because you've told them stuff.

[00:21:54]

[00:21:54] Jeff Immelt: [00:21:54] Look, I think it's a look, my career didn't end the way I wanted it to. [00:22:00] We moved to California. I basically just kept my mouth shut for three or four years. Having people pick apart things that are true is different than letting lies calcify and when you let lies, Calcify.

[00:22:16] It doesn't just hurt me. It hurts thousands of people who went on the journey with me, who were great executives, who were, who are working in other companies today and doing terrifically well. So I felt like a certain responsibility and, Trond, there's only one way to tell a complicated story and that's to tell it completely.

[00:22:38] So I had a co-author, she spoke to 75 people and, everybody remembers the 70% of every story where they're the hero and they don't remember the 30% where they were the jerk. And she made me confront, the times when I was a jerk or did things wrong or things like that. It's some time replacing it's something like I'm replacing [00:23:00] a narrative that's correct. I'm putting out there a story that is more complete and has a little bit of context to it.

[00:23:07]Trond Arne Undheim, host: [00:23:07] I wish more business books were a little bit like that because I find that when I pick up business books and usually I don't pick up the new ones. Cause I, they get old so quickly.

[00:23:16] So I pick them up,  recycled old books, but I don't keep them very long because the success stories one, they don't last, so it's written as a success story.  And then the company doesn't last. So then, what did you learn? I think we need to write different business books, right?

[00:23:31]Have you thought about this? Are you going to write more?

[00:23:33] Jeff Immelt: [00:23:33] I say that in the book, which I'm like you I read military history. I read a lot, but I don't read a lot of business books. Let's take when did take wind energy. So ostensibly, that would be a huge success that I helped plea. We went from zero. The business today is like $20 billion or something like that. But the market went from 80 megawatts to 800 gigawatts. It's not it's not no, you would have had the bid [00:24:00] lame to not have a business that just grew immensely. So is that good management? Is that good luck?

[00:24:06] Cause I could timing businesses complicated, right? In that regard, I would say the best teamwork and the best leadership and the best decision-making. And my tenure was made during the financial crisis, right by the team that worked on that from, let's say 2008 to 2010. Nobody was out there saying, well done guys, thankful you guys are really doing great.

[00:24:31] They already saying you assholes. Why are you in financial services? So that's the nature of business, it's a Yeah, no. When I grew up nobody's sat around and said, brilliant idea. They said you paid $5 billion for what? And now people look and say, you know what, Bob, you're a genius.

[00:24:49] And he was, and he is, so

[00:24:52] Trond Arne Undheim, host: [00:24:52] You don't write so much about this, but I'm just kinda curious. Not all of us are our executives at that at the [00:25:00] level, or will become, even though, some people might aspire to at the level where you were, but what are some of them were down to earth lessons that any senior manager in,  an industrial business should take to heart from what you learned?

[00:25:13]The distinctive role of kind of technology and how to go about handling it in whatever role you have. Are there some things that you learned about the staff that you were managing, some particularly good things that happened. You mentioned that, that the crisis brought out some of these good aspects, but there, there is actually, there, there is a need for advice on all of this.

[00:25:36] And I fear that, today's business schools, they don't necessarily. Have all the data on what the best practices should be and any more, because it's not shared

[00:25:49]Jeff Immelt: [00:25:49] I think that's right. Let me answer, so if you read the book, I'd say what'd you pick out as good leaders absorb. So a, in a crisis mode, look, some people are fear accelerators, and some people are fear [00:26:00] absorbers. You need to be able to be a fear absorber to show people the right way. You gotta make it. You gotta make decisions. You gotta invest to realize the future so I think if you're running a company out there, you need professional managers, but you need to pick out the people that are willing to invest that are really willing to say, we ought to do this product.

[00:26:23] And we had a launch this this app, you need to pick those people out of the pile. So you need people that can see around corners and that can invest. You need people to connect. Look, I sit in Silicon valley, the labor arbitrage is brutal today. People can find so many jobs there's no amount of stock options that's too many. So if you don't have a personal connection with the people that you work with and trust them and they trust you, you just have no success pattern. And you need to be able to solve problems and drive change, [00:27:00] so if you want to drive globalization or things like that, so those are the things that are hard to teach in business school.

[00:27:07] Now, if I go to maybe the nature of your podcasts and things like that, my experience is Sanford is. These kids don't know anything at all about manufacturing, nothing zero, right? There's no context for it it's not appreciated yet. If you think about some of the new digital models that are underway, if you think about onshoring, if you think about some of the new technology that's underway, that's  what really, it needs to be taught.

[00:27:35] I there's a small company that just invested in that does robotics for kind of a sorting of waste. So I went to a dump in San Jose the other day and it was brutal, man. It was, these were the worst jobs I've seen in my entire career. And you basically say that without robotics pick, being able to pick the right shape and my package.

[00:27:59] A [00:28:00] recycling future has no way, in others, we're never going to solve this recycling problem ever,  it's all lip service. Having people that are willing to roll their sleeves up and solve some of these problems, I worry a little bit about that. Not everything is going to be software, some of this stuff is going to be physical space.

[00:28:20]Trond Arne Undheim, host: [00:28:20] There is that aspect of manufacturing but there is also the aspect that you just mentioned, that technology is moving in an astounding not just astounding pace, but also an on an astounding scale. How do you explain the time lag of perception, both among the elite and whether it's business schools or politicians even or software engineers for that matter, why don't more people realize that the big opportunity now lies in this wide industrial space, the space that you know,

[00:28:51]Jeff Immelt: [00:28:51] I think it's completely true. I think it's going to be accelerated by labor shortages [00:29:00] and by you know what I would call reducing global supply chains to being more local. So it's all going to be accelerated. I think enough, a lot of it's driven by the fact that people don't like to see things for themselves.

[00:29:13]It's one thing to talk about robotics or additive manufacturing it's another thing to see it in practice. It's another thing to talk to a line operator and work a shift on your manufacturing floor to see, how does a, how does an application like tulip change the way a frontline operator does their work?

[00:29:32]We do a sales pitch, think about Like I'm an old salesman. So I saw salesforce.com application in 2004. Everybody says, gimme that and salespeople have allowed voice inside every company. And Salesforce icon becomes a huge company. Now I look at tulip, 20 years later.

[00:29:49] And if you're a frontline operator, Tulip fuel so Salesforce felt if you're a sales rep, nobody's yet screaming. I've got to [00:30:00] do this because frontline and manufacturing people have no voice.  Finance people have a voice, salespeople have a voice. And I think more CEOs or ops leaders need to create this voice for the people that are doing the work or the products or the manufacturing site. That have to do the work. And the CIO is not going to get it done. You gotta have, you gotta have frontline people that know how to get it done. When I see tulip, I say, interesting idea reminds me of Salesforce in 2004. Now Salesforce is a 250 billion market cap company. So everybody would love that.

[00:30:36] But what it's, visualization, it's SAS, it's got all these advantages.

[00:30:40]Trond Arne Undheim, host: [00:30:40] Jeff, there's something to it, I say these days, that software for the last 30 years has been for people who are sitting down and I'm looking at a screen. So it's white color essentially, it's that's where we've invested all the dollars but now maybe we should do 30 years of it for people who are standing up or are on the move.

[00:30:58] Not because they, are like [00:31:00] jet setting on the move, but because they literally. In order to carry out their day's work, they don't have the luxury of sitting in this nice office where, I'm in this nice office space right now, you are in a, a very comfortable space.

[00:31:13] We have the luxury of sitting down and you know how these big screens and big processors, but that's not the reality of today's world.

[00:31:22] Jeff Immelt: [00:31:22] Completely agree. So if you think about this so I probably implemented, but I'm not alone. Tens of billions, of dollars of ERP, of CRMs, things like that. I can't tell you whether they paid off or not.

[00:31:35]In other words, they're all statements of record. You needed to do them for compliance, who knows if they ever paid off. All of the manufacturing technologies have a payment they all are gonna drive quality productivity they're gonna hit somebody who's ledger but they just don't.

[00:31:49] They just lack a consistent voice of somebody saying, I need this. If I get it, I can improve the operations. Here's the payback. Let's go [00:32:00] and it can't be the CIO. I don't think

[00:32:03]Trond Arne Undheim, host: [00:32:03] What is the ideal picture kind of moving on coming years the ideal frontline operations platform what would it do?

[00:32:10] What would it enable in your mind?

[00:32:11]Jeff Immelt: [00:32:11] Gosh. There's so many factors to what you say. I think there's super low cost robotics that allow it to get into places. It can't get to today, it's visualization, salt, MES systems are typically too heavy to really create the kind of individual kind of metrics that people need. So I think it's making it big MES systems, more flexible, and user-friendly, it's putting in as many things closer to the customer as you can through additive manufacturing. So I think there's a huge future for that and it's workforce training that takes a generation of people and gives them both a a physical perspective [00:33:00] and enough digital comfort that they can utilize these new technologies that are coming through it's computer vision that allows high-speed manufacturing to be done with better quality. So that's a combination of AI and machine learning. So look, it's all the, it's all the big stuff. It's AI, it's machine learning. It's additive manufacturing, it's application software, it's automation, but it's making it all more flexible and lower costs so that you can have, facilities with hundreds of workers, not thousands of workers close to the customer,

[00:33:38] Trond Arne Undheim, host: [00:33:38] but I like the way that you speak about technologies and then you say workforce.  There's a bit of a discussion now on, on this middle skills or the skills gap or skills challenge, and in manufacturing, or the many reports out on this, how are you going to train and retrain so many people? How do you think training needs to change to accommodate this? [00:34:00]

[00:34:00]We certainly can't put them in college and certainly not four year colleges. And that traditional answer was, community colleges, two years associate degrees. But I is the answer to put people, or, again, in a classroom on a desk and learn or are there other ways now that we can still get that kind of learning done?

[00:34:20]Jeff Immelt: [00:34:20] I think there's probably other people who are smarter about it than I am, but I'm a big believer in ecosystems of high school, junior college manufacturing companies that are willing to share talent. The last probably four or five factories we built in the us we're all in college towns.

[00:34:38]And it wasn't because we necessarily wanted college kids, but we found that the high schools and college towns tend to be tinted the P better than the other high schools around the country. So they had better math scores. So we could have, we could recruit out of high school kids that had better.

[00:34:57] So it was Auburn, Alabama, [00:35:00] west, Lafayette, Indiana, different places like that. And we're building factories with 400 people and you would get them right into an apprenticeship program where you'd get them right into some kind of a community college and give them a sense and get them trained on additive manufacturing and quality systems and things like that.

[00:35:20] So it's a, you've gotta be very. I'd say specific about the work you're trying to do and then I'm a complete believer that we're going to enter into an era of labor shortage pretty quickly here. Just, it's a complicated subject, but I think companies need to be thinking about, who's going to do the making and how do you develop them from scratch?

[00:35:42]Trond Arne Undheim, host: [00:35:42] So then that brings me to small questions. So the future, right? What,  is a factory going to look like in the future and what is an industrial powerhouse going to look like? Will there ever be a digital powerhouse like the one,you  attempted to create, or will that [00:36:00] actually be a myriad of these startups that, that have no respect for the old behemoths?

[00:36:07] Jeff Immelt: [00:36:07] I think it's going to be so again, I think it's a combination. So I think smaller facilities close to markets where manufacturing and marketing actually gets spoken about in the same sentence,  those are going to be the way of the future. And they're going to be powered by two or three of the technologies. So we've talked about today, not all of them, but two or three of the technologies we've talked about today, whether it's advanced robotics or different elements that are incorporated in the wave of technology and how it can be applied. So smaller facilities, closer to markets, two or three technologies that can be perfected and where the plant manager is actually a digital native, or is not intimidated by wanting to see how the work gets done.

[00:36:55]So that's Look, I think you've got an Amazon and let's [00:37:00] say Tesla. CEOs that believe dramatically in forward and backward integration. So you've got the next wave, basically trying to like, like I grew up in an era where you divert a closed everything, right? You let suppliers do everything.

[00:37:15] You let them do all your, it, all your manufacturing, you salted distribution, everything was diverted. The next wave of entrepreneurs, they are vertical integration guys. They're like, I want to do that. This, I want to do that. I don't want anybody else to make money other than me. So that's going to be one wave of where technology is going to take place.

[00:37:35] We're still going to have really good. I think you can't be in the automotive industry without being respectful of manufacturing. You can't be in the aviation industry without being respectful of manufacturer. There's certain industry. Where the product and the process are the same thing and those guys are always going to be really great manufacturing companies, and then there's going to be startups, and they're going to be trying to disrupt as best they can. [00:38:00] So it's a combination, but the next generation of of let's say winners, And again, I put Amazon, they don't want to share any dollar of margin with anybody. And so that's going to drive an investment strategy that's consistent with.

[00:38:13]Trond Arne Undheim, host: [00:38:13] As you said, leaders must master kind of these conflicting principles, right? That's towards the end of the book you start talking about how you need to be both big and fast and global and local, and all of these economies that doesn't really make in traditional business books, you do one thing really well, and you stopped doing the other stuff, right?

[00:38:34] Jeff Immelt: [00:38:34] It doesn't work anymore.

[00:38:35] It was about the order, right? I'm going to do this or this. The CEO's I bring into my class at Stanford, they talk about the hand, right? They talk about we have the CEO of Peloton, and he says, look, I want to make the bikes and be a content company and being an entertainment company and being an exercise company.

[00:38:50]And he tells the story of saying, look at every step of the way the venture capitalist said, don't do that don't buy a bike. Don't do your own content, right? [00:39:00] Pick a spot, pick a spot and he said, no, I'm going to, I'm going to pick all the spots I'm going to do. And so I think there's something about being a systems leader and focusing on the end and not the, or

[00:39:13] Trond Arne Undheim, host: [00:39:13] I want to give you the last word, but in your book towards the end, you talk about life after G and you say it's possible to be happy, even when the things don't work out the way you plan.

[00:39:24] And I find that to be a very powerful message, especially when coming from you what's your advice to people on happiness. It's a weird way to end an industry podcast, but it seems like you've earned it. Yeah. So tell us,

[00:39:35]Jeff Immelt: [00:39:35] Look, my dad worked for GE. I worked for GE for 35 years. I love the company and I love the people I work with and I did my best every day yet with all of that.

[00:39:47] There's some people that blame me for a lot of things associated with the company. And so that's heartbreaking, right? That's heartbreaking, but I'm not the only person that's gone through, stuff like [00:40:00] that. And the decision you have to make is, are you just going, keep trying, or are you going to quit and just go into hiding or are you going to keep on trying?

[00:40:09]And so I kept trying. I kept trying to add value. I kept trying to help people like max and the time. And I think that's the message. The message is sometimes despite best intentions, things don't work the way you want them to, but you just can't quit. You can't quit. You got to keep trying and find new avenues to add that.

[00:40:38] Trond Arne Undheim, host: [00:40:38] Jeff. It's been a fascinating, and I knew it would be fascinating. I read your book. I loved it. I have to say it was really powerful messaging in there and deeply felt, I think a both emotions and analytical strategies to handle a bunch of different things, whether you're now an industrial tech or otherwise.

[00:40:57] I thank you so much for giving this interview.

[00:41:00]Jeff Immelt: [00:41:00] [00:41:00] Thanks Trond. Great to be with you.

[00:41:03]Trond Arne Undheim, host: [00:41:03] Just listened to episode 42 of the Augmented podcast with hosts Trond Arne Undheim. The topic was business beyond buzzwords our guest was Jeff Immelt venture partner at NEA and former CEO of general electric. In this conversation, we talked about Jeff  new book, hot seat, running a top tier manufacturing business, industrial tech, the impact of globalization.

[00:41:29] Workforce training and how industry will evolve in the next decade. My takeaway is that Jeff Immelt's brave, honest and wise book is unusually revealing and instructed. Jeff has shared not only how lonely it is at the top, but seemingly how few big choices and at times how many. Smaller choices you have at any given time.

[00:41:57] His struggles with industrial tech are near [00:42:00] timeless. Nobody has all the answers in terms of getting organizational implementation of exponential tech, right? Especially not if your organization is the size of GE. I was struck by the implication for leaders, be vulnerable for risk, not only your own happiness, but those of all your coworkers, MLC struggle was digitized.

[00:42:24] Jeanie behemoth in transition. He chose to build an in-house capacity at great cost and with mixed results. But how many other options were there on the table? Hindsight is 2020. As Imelda points out nowadays low-code and no-code systems such as tourists are about to transform from line operations. In ways we can only start to imagine the promise is empowerment of workers and men's productivity gains from freeing up the human mind.

[00:42:59] Our [00:43:00] challenges might have times seam or indeed fees smaller in scale, but might feel equally overwhelming. Good to know that that folks at the top struggle as well. Thanks for listening. If you liked the show subscribe at to Augmented podcast.co or in your preferred podcast player and rate us with five.

[00:43:22] If you liked this episode might also like episode 21 on the future of digital in manufacturing with Caglayan Arkan VP of manufacturing industry at Microsoft episode 32 covering industrial innovation with Amy Feldman, senior editor at Forbes or episode 27 industry 4.0 tools with Carl B March director of industry 4.0 at Stanley black and Decker.

[00:43:49] Industrial conversations that matter.

 

Jeff Immelt

Venture Partner, NEA, former CEO of General Electric.

Jeff Immelt joined NEA in 2018 as a Venture Partner on both the technology and healthcare investing teams. He is the author of HOT SEAT, a memoir of leadership in times of crisis.

Jeff served as chairman and CEO of GE for 16 years where he revamped the company’s strategy, global footprint, workforce and culture. During his tenure, he led several innovative transformations that doubled industrial earnings, reshaped the portfolio, re-established market leadership, grew a strong share position in essential industries, and quadrupled emerging market revenue.

Jeff has been named one of the “World’s Best CEOs” three times by Barron’s. During his tenure as CEO, GE was named “America’s Most Admired Company” by Fortune magazine and one of “The World’s Most Respected Companies” in polls by Barron’s and the Financial Times. He has received fifteen honorary degrees and numerous awards for business leadership and chaired the President’s Council on Jobs and Competitiveness under the Obama administration.

Jeff earned a B.A. degree in applied mathematics from Dartmouth College and an M.B.A. from Harvard University. He currently serves on the board for NEA portfolio companies Bloom Energy, Bright Health, Cleo, Collective Health, Desktop Metal, Formlabs, Radiology Partners, Tri Alpha Energy, and Tuya. In addition, he is on the board of Sila Nanotechnologies, Hennessy Capital, and Twilio. Jeff is a member of The American Academy of Arts & Sciences. He and his wife have one daughter.