LIKE A POLITICIAN winning a first election, Flannery had become recognizable. After sixteen years of Immelt, Flannery was now considered GE royalty.
He hadn’t exactly been a peasant before. Flannery had been a rising executive at the company for years; he’d overseen GE’s operations in entire countries, run high-profile deals, and known well the pressure and comforts that came with GE’s highest offices. He might not have been as enticed by the formalities as some others, but he was getting more comfortable being whisked from one place to another, having a security detail, and constantly having a car, plane, or helicopter waiting to deliver him to the next stop.
Flannery could work a room like Immelt, but their styles were enormously different. Flannery visibly relaxed and brightened when he spoke about what engaged his personal side—a book, a news event, or family. Interjections, whether serious inquiries or social introductions, made him visibly tense back up to what seemed a naturally guarded state. The superficial, even in business settings, didn’t hold him.
Immelt was headed for the Small-Talk Hall of Fame. He wielded a masterful recognition and ability to bring a room to a low chuckle. Flowing through groups in a crowded hall, like a good politician he left everyone feeling he had talked directly with them. Immelt’s allies said that the trappings of GE royalty meant little to him. And yet the very environment he moved through for more than a decade changed to his tastes without his asking.
Immelt notoriously preferred cold temperatures anywhere he had to present to an audience. It was a subject of humor inside and outside GE, but also not a joke. No effort was spared by the staff to ensure that meeting venues were cooled to meat-locker temperatures to accommodate the boss’s preference, irrespective of whether anyone had ever heard him make such a demand out loud.
Was a CEO supposed to object that the temperature was not to his liking, or demand that elevators were always open and waiting for him? Or that the cold diet sodas he liked were always present on a sideboard when he entered a room, no matter how far-flung the visit or conference room he walked into? Some of his colleagues and underlings noticed the preparations, and even without hearing them demanded, the lesson was the same.
The perks weren’t why anyone did the job. But the environment of supplication that surrounded the head of the company was also nearly impossible to opt out of. The room must be made ready for the boss.
Immelt made no secret of his distaste for waiting. Interruptions in a meeting from a ringing cell phone produced serious scorn: “What is this?” he would growl at the perpetrator with a sharp glance that conveyed a stinging disapproval. When flying the company helicopter into Crotonville, he would often have a black car waiting to take him from the helipad to the front door—a distance of several hundred feet.
But now, Jeff Immelt was gone. He was still chairman, but he had essentially disappeared from the company. He was somewhat in the way, and he could sense that. There was little for him to do, and his office was moved from corporate headquarters and into a WeWork space that was being used by an offshoot for the GE Lighting business across town in Boston.
Before officially stepping down as CEO, Immelt was already trying out for another job. He was in San Francisco being considered for the top job at Uber, the ride-sharing service that was in the midst of a governance crisis and power struggle with its founder. Immelt presented himself as someone who could be “the grown-up in the room.”
Media attention to the Uber selection process was unending, including reporters staking out Immelt at his hotel. Eventually realizing that the job wasn’t going to be a good fit—and also knowing that he didn’t have the support he needed to get the job— he withdrew himself from consideration to save face.
Back at GE, Flannery hit the ground running and made big changes within a few days of officially wearing the crown. Consciously or not, a lot of moves cut into the fat that had been gained in the recent decades of the company’s growth but not revisited as the company evolved.
As one early cost-trimming move, Flannery grounded the corporate jets and put them up for sale. He directed employees to use charter flights or just fly commercial. He also eliminated the company policy of providing a car to its top eight hundred people.
He delayed parts of the Boston headquarters project, sending shivers down the spine of local officials who had bent over backward to bring GE to town. GE insisted that it remained committed to Boston.
Flannery canceled the lavish annual three-day, invitation-only GE retreat at the Boca Raton Resort & Club, a networking event for GE leaders gathered from around the globe to spend afternoons in Florida golfing and fishing. Hordes of GE’s top brass had once gathered in Boca, many in the Immelt-era company uniform: loafers and Dockers, crew-neck sweaters over button-down shirts. Some described the meeting as right out of 30 Rock, a sitcom based on NBC and its former corporate parent GE. On the final evening at Boca Raton, the CEO would dole out sought-after internal awards.
Instead of gathering in sunny Florida, Flannery replaced the event with a meeting in Boston in January. There would be fewer attendees and certainly no golf.
He began the shutdown of research centers in Shanghai, Munich, and Rio de Janeiro, shifting some of their engineering work into individual business units. The once-sprawling and endlessly growing research operations would now be concentrated in just two global research sites, located in Niskayuna, New York, and Bangalore, India.
A picture of the company started to come together. The operations weren’t in the shape they needed to be. Few had doubted the decision to jettison GE Capital, but the plan to replace its earnings had fallen flat. Industrial growth wasn’t coming fast enough, and the company had blown billions on share repurchases that now seemed worthless. During Immelt’s tenure, GE spent well over $100 billion buying up its own stock, much of it at a price far above where it traded now. Without adjusting its sacred and expensive dividend, the company had gutted its ability to generate cash.
In the first six months of 2017, GE had earned hardly any of the $12 billion in cash it had previously said it would take in that year. It would need at least $8 billion just to cover the dividends it had promised stockholders, before getting to the myriad other areas, like research and development, where regular infusions of capital were essential to its success. The path was becoming clear—but heading to a place that had been inconceivable just weeks earlier.