Fmr. GE CEO on the new and different 'complexities' that CEOs have to navigate today

In a new interview with Yahoo Finance's Julie Hyman, former GE CEO Jeff Immelt explained how the role of CEO has changed since he last had it. Specifically, he noted, CEOs are expected to take a stand on social issues and also need to address diversity and equity.

Video transcript

JULIE HYMAN: Also we have seen sort of the role of leaders change, the role of CEOs change. That was sort of starting to happen during your tenure at GE but I think it's happened even more over the past year and a half, with a lot of CEOs taking new measures to take care of their employees, for example. And also, as we have seen COVID sort of become politicized, we've seen more CEOs sort of step out in front of that. What do you make of that change? What do you think the role of the CEO is in this day and age?

JEFF IMMELT: Yeah, look, when I first became CEO let's say in 2001, CEOs were private citizens and not much was asked or demanded of them. By the time I retired in 2017, it was a more public job. And I think in many ways between 2017 and 2021, it's become an even more challenged job. You have to for the first time in a generation, the leaders have to navigate inflation. There's tremendous volatility in the global markets. They're expected to take a stand on social issues. There's an incredible need for improvement in diversity and equity. There's big problems to be solved in climate. Globalization used to be a good thing, now if you use the phrase globalization you're considered to be an enemy of your country.

So these are all the complexities that CEOs have to understand and have to navigate. Look, at the end of the day, nothing matters if you don't run your company and run it well. But at the same time, you have to have a sixth sense for what's going on around you and pick your spots in terms of when to engage. You know, policy now equals politics, it used to be that you could advocate for a policy. You can't do that today without really taking on a political stand. So I think it's important for CEOs to pick their spots when you think about all the things that are going on today.

JULIE HYMAN: So do you think on balance that it is a positive change that the job has seemingly become more complex than ever? And what then-- not just what do CEOs need to do but what kind of people need to be chosen as CEOs?

JEFF IMMELT: So I think you know, I'm not judgmental about what's positive and what's negative. I think caring about what's going on in the world is always a good thing. I think being associated with solving problems is something companies can do, and that's a good thing. If you think about things like climate change, sure there's a big public policy aspect that's essential. But at the same time, it's not going to be solved, it's not going to be resolved unless the private sector gets dramatically involved and is a positive force for change. So I think those are things that are important for companies.

You know, I think truth equals facts plus context. It used to be you didn't have to worry about context, you didn't have to worry about how you or your company fit with the world. Now, if you don't really understand the world, you can't lead, right? You can't-- if you don't understand kind of the overall fit and what's going on around you, you can't lead. So I think that's a real change in terms of the types of people that can do the job.

And you know, is it good or bad? I think that depends on whether or not we actually solve the problems. If we get ahead in the environment, if we make health care more affordable, if we can recruit good teams, then it's tremendously positive. But if we still have the same problems five or 10 years from now, you know, then different models will continue to evolve.