You see, with Jack, GE’s culture was all about performance. You always knew how you were doing. He’d come in and say, “You’re a prince today.” (I was never a princess!) But other days he’d tell me, “You’re a pig.” Quite literally. And he meant it.
I was a prince (and got a princely bonus) when I convinced him, over the objections of my old boss, Andy Lack, who had been a former CBS producer, to orchestrate a 60 Minutes story that made Jack shine. And I was sent to the doghouse when a positive Time magazine profile of him came out, naming him one of the most acclaimed CEOs of the twentieth century, because he thought it didn’t get enough play.
Bearing down, his voice growing loud, he said, “I expect you to do for me what you did for Tim Russert and Tom Brokaw. You’re a star maker. Where’s my star?”
That brutal intensity, his laser focus on performance, is what led Jack to Six Sigma. In the mid-1980s, Motorola developed a quality management program based on a sophisticated statistical model called Six Sigma, which involved attempting to reduce the number of defects in their business processes to less than 3.4 per million. Within a few years, managers everywhere were demanding their organizations begin implementing Six Sigma principles.
Jack was captivated by Six Sigma and launched it across GE in 1995. It was the ultimate control system and a way to produce products that are as defect free as possible. (You’ll be happy to know that GE’s jet engines are produced with numbers beyond Six Sigma.) It makes processes repeatable, scalable, and perfect—the height of efficiency in a large industrial machine. It was a story with results that Wall Street loved.
Every GE employee was trained in Six Sigma methodology, and certified based on their level of understanding, from assistants to division presidents. Jack even created “black belt” positions in each business unit, Six Sigma ninjas.
I had my own Six Sigma training while I was at NBC, in 1997 when Bob Wright and I and the entire NBC leadership team took the class together with others from GE. Unfortunately, it was totally lost in translation. We were sequestered in a hotel ballroom while we learned the various nuances of defect-free processes. There were classes, tests, and more tests (if anything, this was a reminder of why I thought I never wanted to work at GE). The NBC guys stood out at these training events: they were the ones sitting at the back of the ballroom, reading newspapers and passing notes.
Each one of us was asked to identify a project to apply Six Sigma to, everything from logging phone calls to queuing videotapes to travel agendas. Nothing could escape the talons of Six Sigma improvement. It was like an efficiency diet program. Six Sigma brought with it a new vocabulary and a way of communicating across the company. It was a way to get an army of 300,000 people moving in lockstep rhythm.
But while Jack’s personal leadership and focus on performance made for a tremendous upside in terms of discipline and loyalty and stock price, it also created a top-down, parent-child relationship between Jack and GE employees. Having 300,000 employees working in lockstep is powerful, but it’s hard to enlist risky new ideas from people who are expected to do everything perfectly. A society that glorifies numbers—and fears mistakes—leaves little room for human imperfections.
In meetings, Jack would regularly rate people’s contributions by saying, “That’s got to be the second dumbest idea I’ve ever heard.” It was always funny, but it was also a put-down. (And it made me wonder, What’s the dumbest idea? Should I aspire to that?)
It was a command and control culture with one guy who gave out all the grades and permission slips. Jack would say things like, “I can’t be everywhere, so I just said they can’t do that.” Managers shunned innovation to avoid failure. (The culture became a favorite theme on 30 Rock, the show created by Tina Fey, that lampooned NBC and its parent company for seven seasons. One of the most popular episodes depicts an annual “Retreat to Move Forward” of “the Six Sigmas,” a group of men who celebrate their “pillars” of culture: Brutality, Male Enhancement, and Handshakefulness.)
And I realized that I didn’t have permission yet. GE demanded predictability and exactitude, not exploration. Jack didn’t really want questions raised; after all, he had the answers. GE had become a reliable performance machine, not a place for change-makers.
To succeed in creating change, to not be picked off whenever you stick out your neck, you’ve got to act using the other side’s language and values. You’ve got to act from the inside, knowing their arguments better than they do. In other words, I had to learn how to speak and act GE. That meant learning to balance myself on an organizational fault line between uniqueness and belonging, between being someone who is not blinded by cultural assumptions and has the independence to question and provoke, and someone whose sight is credible because of her loyalty to (and performance in) that same culture. I would need to make myself into someone who belonged, yet was able to be independent enough to rebel without getting fired.
A few years ago, the Franciscan priest Richard Rohr wrote an essay about living in the sacred space at “the edge.” Living deep on the inside is too dark—“what might be” is incapacitated by what’s already worked. Living on the outside, however, you have no influence. It is on the edge between inside and outside where you can get things done.
In other words, being the outsider inside. Someone who can translate the outside for the inside in terms it can understand. Someone who builds “bridges, not walls.” Someone who is enough of an insider not to be rejected by the corporation’s natural antibodies.
It was my performance that would allow me to build the social capital that would give me the leeway to push on the way things were done, when it was necessary. When your North Star is always the work and how to make it better, it keeps you from engaging in petty politics or hand-to-hand combat over personality issues. Putting the work first gives you a measure of protection. And I needed that.
I knew by acting as a change-maker I might never be liked or accepted. But being PR Girl, cozying up to the boys at The Table of Lost Dreams, was always destined for failure. I was never going to be a charismatic glad-hander. And I certainly was never going to be one of the boys who knew the lifetime batting average of Ted Williams.
Years later, I felt an odd satisfaction when I heard that after I returned to NBC again, Bill William Conaty—the head of GE HR—said to a colleague, “You know, I’ll say this about Beth. It’s always been about making the work great. It’s never been about her.”
Unlikely, but Not Impossible
With my new approach in mind, I dove into one of Jack’s pet crusades, and one of the most controversial of all of GE’s projects: the Hudson River PCBs fight.
In the 1940s, GE began using polychlorinated biphenyls—PCBs—as an electrical insulating fluid in the housings of the capacitors and transformers it made at its plants at Hudson Falls and Fort Edward, on the bank of the Hudson River north of Albany, New York. Over the next three decades, the company dumped about one million pounds of PCB chemicals into the river—which at the time was legal. But a series of lab studies showed that PCBs caused cancer in lab animals, and possibly in humans, and could be tied to premature births and developmental problems.
The federal government banned the use of PCBs in 1976, over strenuous complaints from GE. Even before then, the state of New York demanded a cleanup. That’s when Jack came into the picture, when he was sent to negotiate a settlement with the state. With his amazing toughness and charisma, he managed to get a deal that capped the company’s liability at $3 million—a small amount for a giant global corporation like GE.
By the time I got to GE twenty years later, that deal was collapsing. In 1983, the EPA declared a huge swathe of the Hudson River a Superfund site—the agency’s biggest. And by late 1999, the EPA announced that GE’s effort to stop seepage from the old plant sites wouldn’t be enough. Dredging the river would be the only way to really clean it. And GE would have to pay for the job. The
starting estimate for the cleanups was $500 million.
Jack would have none of it. The EPA report was based on bad science, he railed, and dredging would make things worse by recirculating PCBs in the riverbed that were being broken down by natural processes. To Jack, the whole thing was just a leftist green conspiracy. Moreover, it was antibusiness. Inside GE, one thing you did not do—ever—was disagree with Jack on the PCBs issue.
Now, I had majored in biology in college and was a nature-loving person. So Jack’s intense hatred of the EPA made me queasy. But my feelings didn’t really matter. I was part of the PCBs army. It made for tough moments. Some PR people live for these moments. It’s all about attack, counterattack, my message, your message. If GE was to have any hope of winning, I realized, we needed someone on the outside who knew how to fight this. So I made it my job to find somebody.
That’s when I discovered Gary Sheffer, who had worked for the Secretary of the Environment in New York under Governor Pataki’s administration, and, previously, for Zenia Mucha, who went on to be head of communications at Disney. Mucha had a reputation as a fiery political communicator who always won in a fight, and Gary was an acolyte of hers. I felt we had our man.
Jack brought in ad agency BBDO’s Phil Dusenberry, a legendary adman who had run Reagan’s campaign and who, along with Jack, had developed what is still one of GE’s best taglines: “We Bring Good Things to Life.” Jack approved every ad Phil and BBDO came up with, including the Reaganesque “Morning in America” ad campaign with several beautiful eagles flying over the Hudson and upstate New York. Essentially, the message was, “The eagles are back, the fish are happy.”
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Jack kept saying that the fight was about the science—that the PCBs that GE dumped were legal at the time. Moreover, they weren’t safely removable. But as he micromanaged the PCB campaign, I began to see that Jack couldn’t stand the idea of folding after he’d fought so long. He had to win.
And frankly, I got swept up in the war. As the essayist John Gardner once wrote, “All too often, on the long road up, young leaders become servants of what is rather than shapers of what might be.” That’s what happened to me. I was shrill, and determined to fight to the end. I didn’t even nudge for change. I let my lack of experience with PCB science, and GE, quiet my inner voice.
Here Be Dragons
When we are excavating the emotional reasons behind why we do things, we tend to avoid negative emotions, such as worry, fear, and anger. But these emotions are like blazes on a forest trail. They point to problems just beneath the surface, trends, or opportunities that are emerging that nobody has spotted yet. Our fears, if acknowledged and catalogued like exotic species in an unexplored rain forest, can be valuable sources of knowledge for ourselves and our organizations.
Jack’s role—and mine—in that fight over PCBs taught me a vital lesson: that one of the greatest enemies of change is what I call incapacitated learning, a phrase I borrowed from the futurist Edie Weiner. She describes it as a condition of “knowing so much about what we already know that we are the last to see the future for it differently.” It’s like carrying a career’s worth of mental baggage around.
Entrenched professionals—and there was no one more entrenched than Jack—carry around a lot of hard-won mental baggage. And then, one day, all of a sudden these strange young people go rushing past them into the future carrying Patagonia backpacks. With their lighter load, they leave the old guard in the dust to rationalize their heavy expensive bags.
The unfortunate truth is, most of us fear losing what we have more than we desire winning something we don’t have. The better we get at doing one thing, the less we want to work on something else. What’s more, we tend to surround ourselves with people who think like we do and reinforce our biases.
It takes a lot of work to change your mind-set and continue to keep learning. Business people love to talk about disrupting markets and industries, but we rarely put forth the effort to disrupt ourselves. It’s just too hard.
It may seem like I’m attacking Jack on the PCB fight, but that’s not my intent. He believed in the rightness of his fight. And his winning spirit is part of what made him an admired CEO at a unique time in business history. Jack was a CEO superstar—the superstar of his era. And yet that era was ending. I found Jack to be an incredible teacher; I’m a better leader because of him.
Let me give you an example. Moving fast and being organized were my strong suits. If I could field phone calls with both hands and both feet, I would. The more there was to do, the more alive I felt. I loved to be productive, efficient, every to-do-list item checked. Urgency was my favorite soundtrack. I loved the energy and the thrill, and was good at keeping up with it.
So imagine my surprise when, one afternoon, I was talking on the phone with Jack when the line went dead.
I called his assistant, Rosanne, to say we had been disconnected. She said, “No, you weren’t. Jack hung up on you.”
What?
“He says he wants you to know what it’s like to be in a meeting with you,” Rosanne told me. “You’re too abrupt.”
Chastised, I walked up to Jack’s office.
“You have to wallow in it,” Jack said with his cheeky smile. “Take time to get to know people. Understand where they are coming from, what is important to them. Make sure they are with you.”
I heard Jack loud and clear. My zeal to do everything on my to-do list—along with my shy nature—made me come across as abrupt and distant. I started every meeting by jumping right in. Later, with everything under control, I would jump right back out. At best, my colleagues didn’t know what to make of me—and I didn’t give them time to find out.
I cringe sometimes when I think of how I must have come across, and how long it took me to change my ways. Even now there are times when I forget Jack’s advice. But I’ve learned to not only wallow in it, but to enjoy it. Having time to connect with people is as important as getting everything done. Sometimes you have to go slow to go fast.
End of an Era
My time with Jack ended with my big assignment: running the public side of GE’s CEO succession.
Because company executives move from division to division so often, GE is obsessed with succession at every level. But CEO succession kicks that into overdrive. With his emphasis on performance and competition, Jack wanted a very public competition between several candidates, knowing full well that the losers would undoubtedly leave the company. He wanted to push the competitors harder than they’d imagined possible; he wanted to see their character. They would have to be professional with one another, even while fighting to the death.
In the end, the succession came down to three candidates: Jeff Immelt, a 6-foot-4-inch Harvard MBA and former college football player; Bob Nardelli, who ran GE Power Systems and was nicknamed “Little Jack” for his similarity to Jack; and Jim McNerney, who’d done great work at GE Aircraft Engines and seemed most likely to run for political office. I had to manage the public spectacle for several years, as business reporters called nonstop to get odds on the race. Jack kept his cards close to his vest, and the tension was truly unbearable.
And then, just as Jack was about to announce his successor, he saw a possible acquisition that would cement his legacy: Honeywell. Jack had studied and analyzed Honeywell for a long time; when he learned that United Technologies was talking about a merger with it, he faxed in a handwritten offer to the Honeywell leadership team.
Jack managed to push aside United Technologies and get a tentative okay from Honeywell for a $45 billion deal. When he told me about the deal, he said, “Get ready to announce that we’ve made an offer. And, oh, I’ve offered to the GE board to stay around to help make sure this happens.” It would have been GE’s largest acquisition to date and was a lot to swallow, especially for a new CEO.
Determined to keep mili
tary secrecy, Jack decided he would finalize the process over Thanksgiving weekend while America was cooking, eating, and getting together with family. The day before Thanksgiving, Jack called GE’s board management council to tell them he was planning a phone meeting with the full board on Friday.
Then, on Sunday, he got on the GE jet in Boca Raton and told the surprised pilot to fly to rainy Cincinnati. Jack had kept the destination a secret from even the pilot until the last moment. There, Jack broke the bad news to Jim McNerney: he wouldn’t be getting the job.
Then he told the pilot—still in the dark—to fly to even rainier Albany, where he told Bob Nardelli that he, too, was out.
Now, after two of the most difficult meetings of his life—telling two colleagues and, really, friends, that their GE careers were over—he flew to New York to deliver some happy news, to Jeff Immelt. Jeff had been chosen as the next CEO of General Electric. He had grown the health care business through new products and his customer focus seemed to be just what GE needed.
The “Jack and Jeff” press conference announcing Immelt’s selection took place in NBC’s Studio 8H, the Saturday Night Live studio. In true GE fashion, we had managed the PR and media efforts with the gusto I imagine goes into a papal transition.
Jack’s one-year extension came as his playbook was getting dangerously close to its expire-by date.
When Jack became chairman and CEO, at the start of 1981, GE had a $13 billion market cap; when he retired in 2001, it was worth some $400 billion. The principal source of GE’s financial success was that Jack bought lots of companies—especially in financial services—to make GE’s earnings continue on their upward slope. He pushed the company headfirst into finance. GE had long had a financial services division—GE Capital—that helped consumers and industrial customers finance their GE purchases. Jack pushed it to expand into other sectors, like mortgages and car and boat loans, to the point that it had $371 billion in assets in 2001 and, at its peak, accounted for over half of GE’s profits. Jack then used the balance sheet of GE Capital to make financial acquisitions that could easily be sold to help fill earnings gaps on the industrial side. With this tool, Jack was able to deliver the numbers he promised, quarter after quarter and year after year. And Wall Street rewarded GE with an ever-increasing market capitalization.
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