In the summer of 2001, weeks before Jeff Immelt became CEO of General Electric, he was playing golf with friends at a country club near Chicago when a club member asked him what he did.
"I work for GE," Mr. Immelt replied, omitting his title. "Ah, GE! Jack Welch!" the man said. "I feel sorry for the poor son of a bitch who's taking his place."
The late Jack Welch was indeed a tough act to follow. The man dubbed the "manager of the century" by Fortune magazine quintupled the company's revenues and increased shareholder returns 70-fold during his tenure from 1981 to 2001. At its 2000 peak, GE's market capitalization soared to $600 billion.
Twenty years on, GE is a husk of its former self. The nearly 130-year-old conglomerate has shed some $500 billion in value and almost half its global workforce. Its profits have plunged, its stock has tumbled, and it recently paid $200 million to settle with the Securities and Exchange Commission over claims that it misled investors.
GE has sold off many of its businesses, and it has cut its dividend to a token penny a share -- a stunning fall for a one-time market leader in everything from lightbulbs to jet engines.
Many point fingers at Mr. Immelt, 65, who led the company for 16 years until he was nudged out in 2017.
"It became clear right away that my main role would be Person to Blame," Mr. Immelt writes in his new book Hot Seat: What I Learned Leading a Great American Company, which will be published Feb. 23.
While he admits he made mistakes, he says he felt moved to write about his years at GE's helm to highlight the often-dire context of his decisions.
"I dealt with bad news almost every day," Mr. Immelt says over Zoom from his home on Kiawah Island, off the coast of South Carolina.
Despite Mr. Welch's hallowed legacy, Mr. Immelt says that many of GE's problems were inherited.
"I'd become CEO of a company where perception didn't equal reality," he writes.
GE's shares were overvalued, high returns from its pension funds inflated earnings, and the company relied too heavily on its financial division, GE Capital, which contributed nearly half the firm's earnings in 2001 by loading up on debt and becoming overleveraged in the insurance business.
Mr. Immelt says he knew GE Capital's prominence was a problem, but it never seemed like the right time to curtail the company's "only engine of growth."
By offering essentially all the services of a bank (consumer lending, auto loans, insurance, subprime mortgages), GE Capital grew almost twice as fast as the company as a whole.
GE's industrial business gave the company an AAA rating, which allowed GE Capital to borrow money cheaply and increased the margins of its financial investments.
Mr. Immelt argues that GE needed these funds to help support its industrial businesses, which he says had suffered from a lack of investment and innovation on Mr. Welch's watch.
But Mr. Immelt says that failing to wean the company off GE Capital's cash early on was probably his biggest mistake.
"We basically decided to try to grow them both simultaneously," he says of the company's financial and industrial businesses. "By the financial crisis, that didn't look so smart."
The 2008 crisis dealt an existential blow to GE, which had become the largest nonbank finance company in the world, with some $545 billion in debt.
It took years and the backing of the Federal Reserve to stabilize the firm after its financial profits cratered. (A self-described stress-eater, Mr. Immelt "could squeeze into" only one of his suits at the time.) By the time Mr. Immelt finally sold off most of GE Capital in 2015, the damage was largely done.
Mr. Immelt's first Monday in the top job was Sept. 10, 2001.
Al Qaeda's terrorist attacks the next day "marked the end of an era," he says.
Having joined GE in 1982, after studying math at Dartmouth and business at Harvard, Mr. Immelt rose through the ranks during a largely "tranquil" time when China was a sleeping giant and the U.S. economy expanded at a reliably impressive rate.
The world he inherited as CEO, however, was "raucous, volatile and unpredictable," full of bursting bubbles (dot-com, housing, power), disruptive rivals and increased scrutiny.
"I wish I had experienced more different things to be better prepared for the world I saw," he says.
Yet some of the problems that hobbled Mr. Immelt's GE were self-inflicted. Critics say that he often bought businesses at too high a price and sold others at a loss. He could be extravagant, traveling overseas with a spare corporate jet, and he made some costly bets that never paid off, such as spending billions on a digital strategy in the industrial-services market that the company has largely dismantled.(Mr. Immelt points to "dozens of disrupters" that are now targeting this market as evidence of his prescience.) He also spent more than $24 billion in 2016 and 2017 buying back stock, only for the price to fall.
He has earned criticism for not getting GE completely out of the insurance business.
Although the company seemed to shed its risky portfolio in the mid-2000s, in 2018 GE disclosed that it had just written off more than $6 billion for its long-term-care insurance and would need another $15 billion over seven years.
Mr. Immelt says that he had to keep these holdings to sell off the others. He now sees that it would have been better to dump these remnants at any price.
Mr. Immelt's biggest deal has often been called his worst. GE spent more than $10 billion in 2015 to buy Alstom, a French company that makes trains, power turbines and generators, but the move proved costly and ill-timed.
GE essentially invested in carbon-fueled energy equipment just as that market was cooling, and time-consuming regulations and concessions stripped the deal of much of its value.
Mr. Immelt defends the strategy behind the deal and says that the board reviewed the acquisition at least 12 times.
He places much of the blame on Steve Bolze, who ran GE Power before he left for Blackstone in 2017, for failing to capitalize on the acquisition.
Leaving Mr. Bolze in his job at GE "is something I'll always regret," Mr. Immelt writes.
Mr. Bolze says that Mr. Immelt's "narrative simply doesn't align with the facts … While no deal is ever perfect, I remain proud of the GE Power team and its record executing in a tough and ever-changing environment."
Mr. Immelt says that he relied on "GE's system of internal checks and balances."
Some insiders have complained that Mr. Immelt prized optimism and suppressed dissent, preferring "success theater" to rigorous accountability.
As both CEO and chairman, he also had some control over who sat on GE's board. But Mr. Immelt says that he surrounded himself with people he trusted to be honest and regularly invited executives to his home to pick their brains.
Looking back, he says that he wishes he had said "I don't know" more often: "There's a certain sense of vulnerability to saying I haven't figured this out yet. But there are a few times when that would've served me better."
Running a company is "a lonely job," Mr. Immelt found.
As a lecturer at Stanford's business school and a partner at a Bay Area venture-capital firm, he now regularly warns young entrepreneurs that there is no playbook for success.
But Mr. Immelt feels a responsibility to impart what he sees as the core lessons from his time at GE: When you have a tailwind, don't get arrogant; and when you have a headwind, don't give up.