Ten years ago, who would have imagined that Jeff Immelt, the Chairman and CEO of General Electric Company (NYSE: GE), would be doing the things that he is now doing.
Taking over the company on September 7, 2001, in the shadow of the overwhelming figure of Jack Welch, and just four days before the 9/11 terrorist attacks, Immelt was not one to dominate the stage.
Up until the Great Recession, Immelt ran a successful company, one that he could not change to any degree, because of the legacy of Mr. Welch and a board that was still in awe of Welch's achievements.
Going through the Great Recession, Mr. Immelt kept the company together, particularly overseeing the financial structure through the crisis, the financial division that Mr. Welch had put together and was producing more than fifty percent of GE profits.
It was after the Great Recession that Mr. Immelt came into his own. Mr. Welch's memory had sufficiently faded into the background and the board changed and the economic environment had changed.
Mr. Immelt had survived, had developed some reputation as a crisis manager, but was looked upon as a corporate suit that oversaw one of the greater conglomerates in the world. Little or nothing was expected of him than just running the company on into the future. Many even longed for his replacement.
But, something changed during the economic recovery. Mr. Immelt stepped up to the plate.
I find it totally remarkable what Mr. Immelt did with the financial part of General Electric. Here was a part of the conglomerate that was providing more the half of GE's earnings, year-after-year.
As readers of this post can attest, over the past six years, I have applauded Mr. Immelt's drive to divest the company of the financial parts of the company. This, I believe, took real vision and patience and guts to do. And, it was done exceptionally well.
Then Mr. Immelt began to unwind some of General Electric's legacy divisions, good steady producers, but with little to no upside.
How easy it would have been for him to hold onto these historical treasures even though they were not for the future. This, I believe, took real vision and patience and guts.
In terms of the appliance business, it took a long time, but with the deal with Haier Group finally being announced, Mr. Immelt can now move on from this effort.
And, then there were all the efforts in Europe and elsewhere to acquire companies that fit into what Mr. Immelt felt to be the future. These deals took time and focus…but, they were completed.
Now, Mr. Immelt, with most of the "shedding" done, is concentrating more and more on the future. His move into what he calls the "digital industrial" is visionary and daring. He is trying to put the "internet of things" into practice.
Even Michael Porter of the Harvard Business School claims "This really is going to be a game changer for GE."
Then, bang, Mr. Immelt and GE announce that they are moving the company's headquarters to Boston!
Yes, there are tax implications connected with the move.
Even more important in the mind of Mr. Immelt, I believe, was the need to be in an area when the intellectual environment is very present.
In the world of the twenty-first century a company must be cognizant of "the realities of the labor market."
Lauren Weber writes in the Wall Street Journal that the modern corporation "requires access to a workforce with new and rapidly-evolving skills…." Boston provides such an environment.
Whereas the tax concerns may have been the final factor that sealed the deal, my belief is that Mr. Immelt and crew would have done something like this in any case.
The important thing here is "human capital" and I believe that this is the real secret to leadership and corporate success.
Mr. Immelt could not have achieved all he has in the past seven or eight years if he had not had many capable people around him. But, the secret of leadership is not only to have very talented people around you, but also to use that talent very well.
This is why my estimation of Mr. Immelt has risen since the end of the Great Recession. One person could not have done what GE achieved. Mr. Immelt must respect the talent other people bring to the table and then let's these individuals do what they do best.
Mr. Immelt, in this respect, has proven himself to be a leader.
But, let's go back to Mr. Welch for a minute. I believe that this was also Mr. Welch's major talent. He brought top talent around him, he nurtured it, and he let the talent exert itself. In this, Mr. Welch was an outstanding leader.
Many of the executives Mr. Welch groomed around him went on to become widely sought after by other corporations and went on to very successful careers when they left GE. One has to imagine that the crew possible successors that the GE board had to choose from were among the best of Mr. Welch's team.
Obviously, Mr. Immelt must have been very good to have moved on to take on the leadership position after Mr. Welch left.
This is not to take anything away from Mr. Immelt. He was seen as the best of the best when he was chosen.
Perhaps the environment was not right for the new leader in the early 2000s and Mr. Immelt, as mentioned before, worked in the shadow of his successor.
The new assessment of Mr. Immelt, given the chance to perform during and after the Great Recession, is quite favorable. His efforts to change GE over the past seven years have been truly remarkable. His jump into the digital future is daring, yet commendable. I would like to see more of our major organizations, especially commercial banks and other financial institutions, make such a more.
Now, we need to hang on and check out the results from these dramatic changes. The real proof of Mr. Immelt's leadership will be the executives, now around him, that will eventually become GE's leaders and reap the rewards of the changes. So might the shareholders.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.