WHAT IS LEADERSHIP?

• Necessary for organizations and societies, no singular account (Day and Antonakis, 2012; Hunt and
Fedynich, 2018)
• ‘leaders intentionally seek to influence the behavior of other people’ (Owens, 2001: 234)
• Evolution of Leadership Theory:
• Trait Theory: specific traits (Johns and Moser, 1989)
• Behavioral Approach: behavior of leaders, treatment of others
• Contingency Theory: context and suitable leadership styles (Day and Antonakis, 2012)

• Visionary Leadership: future-oriented, risk-taking, socialization, sharing of commonly held norms,

values and beliefs (Rowe, 2001)

• Transformational Theory: motivating followers by appealing to higher ideals/values, defining and

expressing future vision, belief in leader’s credibility (Tracey and Hinkin, 1998)
Background: General Electric
• Former CEO Jack Welch’s (1981-2001) legacy
• GE most valuable company in the world (Gelles, 2022)
• External Environmental Changes
• World Trade Center Attacks
• Corporate Scandals, 2008-2009 Financial Crisis
• Emerging markets dominating global GDP (Egan, 2017)

• Jeffrey Immelt
• 11 business units (Ocasio and Joseph, 2008)
• 300,000 employees
• Organic growth, efficiency (Immelt, 2017)
• Industrial Internet - 2011
- $1 billion investment
- 2013: $800 million revenue
- 2014: over $1 billion revenue
- Total GE revenue in 2013 $146 million – What went wrong? (Krauskopf, 2014)
Issue 1: Decision
Visionary Leadership
• New path when lack of growth,
stagnation; aim to achieve higher goals
• Bring followers in line, shared vision
(Dambe and Moorad, 2008)
• Take risks for future, invest in innovation
• Strong belief decision will impact
organization (Rowe, 2001)
Immelt’s Leadership
• Difficult to maintain growth in current
external environment (Immelt, 2017)
• Trainings for executives and managers,
promote corporate culture to instill vision
• Top-down implementation
• $1 billion investment, change corporate
culture, structure, goals, norms (Denning,
2019)
• Life or death, no plan B (Immelt, 2017)
Visionary Leadership Challenges: Decisions
• Invest more in initiatives than warranted
• Non-linear decision-making
• Certainty of decision
• Risks bring wealth or loss (Rowe, 2001)
• Industrial Internet initiative not constrained by
profits and losses
• $1 billion investment
• Result: minimal profits (Lakhani et al., 2015)
• Rollout across almost entire organization
simultaneously (Moazed, 2018)
• Not evaluated on short-term merits; long-term
not immeasurable
• Rushed (Lakhani et al., 2015)
• Minimal profits, pressure from stockholders
(Blank, 2017)
Issue 2: Implementation
4 Dimensions of Immelt’s Leadership
Transformational Leadership
1. Charisma-idealized influence • Sincere concern for GE
• High regard, identify with leader, role model, admired, • Approachable (Abell et al., 2018)
respected, trusted • Changed culture to encourage employees to take
• Care about others’ needs, consistent, share risks, ethical (Oke risks (Adebowale, 2013)
et al., 2009)

2. Inspirational Motivation • Linking iron and data to transform GE

• Motivate, inspire followers in identifying opportunities; • Trainings, dialogue
provide context and challenge • Life or death, no Plan B – pessimistic (Immelt,
• Develop and express future vision – enthusiasm, clear 2017)
expectations, value commitment (Oke et al., 2009; Simic,
1998)
Issue 2: Implementation (continued)
4 Dimensions of
Transformational Leadership
3. Intellectual Stimulation
• Ability to challenge, reassess practices and approaches
to encourage motivation and creativity
4. Individualized Consideration
• Focus on individual needs of followers to support
achievement and growth
• Coaching, mentoring (Oke et al., 2009)
Immelt’s Leadership
• Changing executives’ and managers’ approaches to
work
• Training, think strategically to foster innovation
• Cultivated personal relations one-to-one, visited
teams, customers
• Taught twice a month at Crotonville (Immelt,
2017)
Transformational Leadership Challenges:
Implementation
• Over confidence (Walton, 2014) • Immelt (2017) was confident in vision as key to
success

• Enhance public image regardless of impact on

organization (Chen et al., 2018) • Immelt in the shadow of Jack Welch

• Drastic change in work impacts followers’ • Transformation of culture, goals, confuses

performance followers

• Individual attention can cause resentment/stress to • Inviting executives to home, cultivating

perform better relationships, pressure to perform (Immelt, 2017)

• Inspirational motivation can conflict with • Lack of new technology knowledge necessary for
followers’ interests, impacting performance (Chen industrial internet, difficult to motivate (Lakhani
et al., 2018) et al., 2015)
Recommendations
Strategic leadership: concern with future viability and current financial
stability
• Predicated on shared vision within organization, but maintains status quo
• Avoids investments in innovations that change organization (Rowe, 2001)

Immelt’s aim fundamentally, quickly redirected GE away from its

organizational structure, focus, culture and goals that comprised its
competitive advantage
• Less drastic, step-by-step changes –> experiment with 1 business unit
• Company culture was successful, deeply entrenched –> small, incremental changes over
time
• New Technology -> Innovation based on competencies, capabilities