Masters of Leadership: A Discussion with Larry Culp, CEO, GE

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good afternoon

thank you for joining the northern

virginia technology council for our

virtual masters of leadership series

a new season of leaders event please

welcome greg baroni

the chairman of nvtc and the founder and

ceo

of attain thank you taryn

good afternoon everyone i'm delighted to

welcome you

to today's masters of leadership event

featuring chairman and ceo for general

electric

larry culp as most of you know nvtc

is the trade association representing

northern virginia

technologies community as one of the

nation's preeminent and largest

technology councils we serve companies

from all sectors of the industry from

small business

small businesses and startups to fortune

100 technology companies

as well as service providers academic

institutions

foreign embassies non-profit

organizations and government

agencies more than 500 members make up

the mvtc membership and look to the

organization as a resource for

networking

and educational opportunities

peer-to-peer communities

policy advocacy industry promotion

fostering strategic partnerships and

branding the region as a major

global technology center before we get

started i just have a couple

of housekeeping matters to discuss here

and one of them is in connection with

the

the q a the question during the question

and answer portion of today's session

please use the chat button found on the

right side of your screen to submit any

questions for

for larry today as our as our featured

speaker

as with all mvtc events we will not be

accepting any questions from the media

the masters in leadership our masters of

leadership series here is made possible

by our sponsors

first appian our signature platinum

sponsor

then our platinum sponsors attain

consumer technology association and

mantec

and virginia tech our silver sponsors

cnsi and uninet our pr marketing

advisor merit group and our media

partners

scoop news group and washington

technology

thank you for your support the nvtc

business and academic partners support

mvtc

all year long in all of the programs we

do

and please thank them as well for the

please thank

all of the following companies as well

for their support

is alan hamilton cit the center for

innovative technology

consumer technology association dell

tech

dominion energy george mason university

innova kpmg maximus

microsoft nobless northrop grumman

penn fed credit union pillsbury pnc

saic venable verizon

virginia tech and our policy advisor

hunton

andrews kurth thank you all for your

support

now i'd like to introduce our signature

platinum sponsor and appian

founder and ceo matt calkins

who will introduce our speaker larry

culp matt

thank you very much greg it's great to

be sponsoring this event i'll take one

minute to introduce

appian and then i'll introduce our

speaker appian's a local software

company and proud to be a member of this

northern virginia community

i founded this business 22 years ago

with three friends here in mclean

and we're still here in mclean

everything about the business is local

all of our funding came from this region

all of our board members as well

the washington post named us the number

one place to work in the washington dc

area

amongst large companies and we were the

number one technology ipo of the year

the best performing technology ipo of

the year in 2017.

appian's a leader in low code maybe

you've heard of it's the new way to

build applications you draw

a flow chart and it becomes an

application instead of writing it line

by line you draw

a picture that's a lot faster maybe 10

or 20 times

faster and that helps companies these

days to uh to change

right events are changing quickly

companies have to keep up but no company

can move faster than its own software

so you've got to change your software to

change your behavior to keep up with the

changing times and happiness helping

organizations

to transform it's my honor this

afternoon

to introduce today's speaker larry kulp

the chairman and chief executive officer

of general electric

larry is ge's 12th ceo and 11th chairman

he joined the ge board of directors in

april 2018

and became ceo in october of the same

year

prior to joining ge larry served as the

president and ceo of danaher corporation

from 2000 to 2014.

during his tenure the company increased

both its revenues

and its market cap five-fold investors

and analysts consistently ranked him as

one of the top

ceos in the annual institutional

investor surveys

harvard business review named larry one

of the top 50

ceos in the world larry is a member and

the immediate past chair of the board of

visitors and governors of his alma mater

washington college

he also serves on the wake forest

university board of trustees

previously larry was a senior lecturer

at harvard business school where he

focused on leadership

strategy and general management in the

mba and executive education programs

before i turn it over to our moderator

greg baroni i would like to introduce

nvtc ceo emeritus and strategic advisor

bobby kilburg who will say a few words

larry thank you very very much for

taking time

doing doing an incredibly hectic

schedule to join us for the semesters of

leadership conversation

i personally appreciate your friendship

and your participation

you have been an exceptional member of

our community and turning around

ge is a huge task which you've

undertaken both with great rigor

and i might say with great grace an

important

and a somewhat rare combination

thank you for all you do now it's my

pleasure to turn the floor back to greg

baroni

in addition to being chairman of the

nbtc board

most important thing in the world right

greg and the founder and ceo of attain

greg is a long time leader within the

government contracting

education and non-profit industries with

a focus on bold

innovative ideas he's received many

awards including govcon

executive of the year ey entrepreneur of

the year

and he was named an nvtc tech 100

executive honoree

greg i'll turn it off to you to kick off

the fireside chat thank you all for

being here

greg bobby i can't thank you enough

what a very generous introduction but i

i think i stand before

are are sitting before a man that really

deserves all those accolades and that's

larry culp

um larry we're thrilled to have you

joining us today and as i understand

your roots are actually in this area

um why don't you share just a little bit

about what it was like growing up what

were the most significant

influences in you as you did and of

course then your selection to go to

a maryland institution the washington

college

sure well greg happy to happy to get

into that

matt thank you for that very kind

introduction bobby good to be with you

as always

uh greg and i were joking earlier uh

bobby had invited me

i think i suspect most of the members of

the council know that

that's an invitation nobody refuses and

the only question was when we were going

to be able to make this happen so i'm

glad

to be back virtually in the 703.

craig as you may know i grew up on the

wrong side of the river

as they say over in rockville but

uh i count myself as a lifelong

washingtonian

and a lot a lot of good memories i think

growing up uh

my my parents ran a small business in

silver spring

and i think from both my parents i

developed

not only an interest in business

but a sense of what a small business was

all about and i i reflect on those

experiences or those lessons around the

dinner table more often than than you

might think

i think my mother was the analytical one

i think my father was more the the

relationship

manager of of that partnership but over

time

the uh the lessons they taught me

clearly i think cultivated my

my interest in a business career uh but

also an appreciation that there are a

lot of things that go in

uh to making a business successful let

alone uh leading well

you mentioned my alma mater washington

college

at the time i was very keen to go to a

small school

simply because i i had a sense that

i went someplace where i had a 500 or a

thousand

students in the same class i might well

get lost

and the the opportunity to stay

relatively close to home

to be over on the eastern shore place

that i still treasure

and get to as much as i can and to get

a liberal arts education in a

small uh intimate environment was

something that was just

a great fit for me and i'm as i reflect

back on

that decision back in 1980

81 uh another fortunate

uh decision that that i took that i

think helped me grow as a person

and ultimately as a leader that's great

well and thank you for sharing that with

us larry but then you go from washington

college to the big time as

we would say to harvard business school

um and i'm just curious uh you know what

what led into that decision and

uh what were probably the biggest

influences on you and especially for

some of the young people in our audience

today i think this may be of value to

them

well let's not forget there was a stop

in between chestertown maryland and

boston massachusetts

down at 16th and k street when i

graduated i ended up going to arthur

anderson

you'll appreciate this not on the audit

side

but on the consulting side

the uh i think was time magazine had

just

within that year named the the personal

computer i think the man of the year

at that time ironically the worst grade

i

received at washington college was in

programming

so i'm delighted to hear that matt uh

has simplified programming i might be

able to get back into the

to the business at some point but i

spent three years there

we did a good bit of work at the sec a

little bit of work at the dod

and i just loved it because it really

gave me an opportunity

not only to learn how to code and what

all of that entailed early in my career

but also i had an opportunity to lead a

couple of small teams

now it was obviously very early i was

quite young

but between those experiences and the

opportunity to experience what i thought

at the time was a phenomenal culture

at arthur anderson obviously the firm

fell on hard times

that was just a terrific experience but

what i appreciated

about myself uh during that time was

i didn't feel like we had competition

i didn't feel like we had customers and

that

maybe is a distinction without a

difference but serving the federal

government's a little bit different

than being in the fray every day of

course you have competitors and

the government is the the customer but i

think i was looking for something that

was a little bit more transactional

so the opportunity uh to go to hbs

uh clearly one of those

once-in-a-lifetime

opportunities but the intent was to

really see if that couldn't be a

transition point for me

uh towards something in general

management

and obviously i ended up with a couple

of different general management jobs

over my uh my career but that was really

the intent unfortunately

uh they gave me an opportunity to enroll

back in the fall of 88.

that's that's terrific you know it's

interesting because as you reflect upon

we would call that that's the nascent

era of government contracting during

that period that you were actually

serving the government client

you wouldn't recognize it now 30 plus

years later

because it's an intensely competitive

field now

and you definitely know that is a

customer set that's

highly differentiated from the rest of

the markets in any event

let's let's move on um i'd like to hear

a little bit about you

you then go to danaher and of course

i mean you have an incredibly

accomplished career during that time and

and you become ceo at the age of 37.

so tell us a little bit about first that

journey up to that point

and here it is a multi-billion dollar

company um who turns to you and they

already have a market

cap i believe at the time of about 20

billion so

tell us a little bit about that sure

well

again i joined danaher in 1990 and

was really attracted to the company in

part because it was based in washington

uh i was keen to get back to the dc area

i had the misfortune of trying to find a

job back in 1990 which

many of you will recall was right in the

teeth

of a downturn particularly in industrial

land and i

was really keen to get into an

industrial business i was also

of the view that i i wasn't necessarily

going to follow

the previous 10 years of hbs grad into

the paths that were well worn

so in doing in the course of doing an

independent job search i fell upon

danaher

had heard a lot of good things about

george sherman their

recently hired ceo who had been up in

baltimore black and decker

and had enjoyed a great deal of success

there

and i basically cold called george and

said i'd like to come see about a job

it turned out i was the first person

that george's ceo

hired at danaher he didn't bring me to

washington he

threw me up in a business called vitor

root in hartford connecticut

threw me into a marketing role simply

because the opportunity they had

in environmental instrumentation was the

opportunity that he had deemed

to be the most promising in the dan or

her portfolio

and i remember i think my mission was

simply something along the lines of

don't let them screw it up how's that

for a job spec

but we uh we moved to the hartford area

uh jumped in with both feet and we just

had a a tremendous team that i was

fortunate to be a part of

they were in the process of looking for

a new president

of that business to make sure we were

continuing to accelerate the

the performance and it was shortly after

my 30th birthday george came to see me

and said

the search has failed we're going to put

you in the job

and that gave me an opportunity fairly

early on uh

to fulfill the uh the the

objective i had going to hbs and that

was to be a true general manager we had

tremendous we just

we had tremendous success at veda root i

ended up getting a series of promotions

really as a result probably got my

unfair share of the credit for what we

were doing with that business

growing i think organically something on

the lines of 17 18 percent

a year for nearly a decade

and as george was approaching retirement

uh in the 1999 2000 period

there were a number bus under

consideration uh and rest assured

uh i didn't want george to retire uh i

didn't see myself as the uh

the lead candidate in any way i was i

was happy doing what i was doing

uh with with the teams that that i was

working with

but i was just floored when uh he gave

me a call and said

you're the next ceo get ready i didn't

think it would happen as quickly as it

did

but then there in the spring of 2001 a

fateful year obviously

in a lot of ways uh there i was trying

to fill the shoes of a real legend

that's amazing uh larry and i'll tell

you

what's more amazing is not only you

accomplishing

or getting to that point it's what you

accomplished during your tenure there

and i'm just going to take the time to

read a couple of things i got

i actually took notes on this because i

thought wow this is

it's during your tenure 465 percent

total shareholder holder return versus

105 for the

s p 500 increasing market valuation

or market value from 30 billion to 50

billion

i think the thing that stands out to me

because i think for during that era

we started to hear a lot about

conglomerates and

what i thought stood out in what i read

about you in the background is how you

redefined

and refined the strategy for a

successful conglomerate

around developing at what that what's

called a tightly focused portfolio of

business

with adjacent and clear overlapping

interests

and i think the other thing that stood

out to me is how you went

in some way you really complemented the

organic with the inorganic

meaning the vestitures along with

acquisitions tell us a little bit about

how did you arrive at this philosophy

how did you come to this

well to be clear wasn't it wasn't me

alone right we had a we had a great

board of directors

uh stephen mitch rails our two founders

uh were intimately involved in in the

evolution of our strategy

in the implementation of it we had a

terrific leadership team

none of the other people who were up for

that ceo job greg

left uh they retired several years later

but we kept the team intact and kept

running the plays that we were running

first of all i i would just share with

you we didn't use the c

word we always joke that conglomerate's

a low multiple

way to think about a business we want to

know part of that uh but

early on through the 90s we did have a

rather mixed and varied

portfolio businesses we were

manufacturing diesel engine truck brakes

and we were equipping water quality

laboratories and a whole host of things

in between

but i think what we found uh with the

passage of time was that

the fewer things that we did trading

breadth for depth

really helped us it helped us drive

organic growth

you mentioned that it also helped us in

a whole host of ways particularly around

capital allocation

right a lot of companies

be they a data herd that throws off a

lot of cash or others that

that may borrow really have a license to

reinvest in the business

in my view as opposed to paying a big

dividend or buying back a lot of stock

you earn that license every day with how

well you operate

and how well you allocate capital we put

back

all of the free cash flow that we

generated and remember when i was there

i think we were converting our net

income at about 120 percent

so 120 of our net income came in free

cash every year just a

tremendous uh performance on the part of

the team

investors allowed us to put that money

back into the business because we were

focused

uh again depth before breadth we were

running the business as well

and we never substituted

inorganic growth for organic growth we

knew that organic growth was just as

much a part of running the business as

well

it's really a proof point right because

if you're growing in line or faster than

your markets you've got to be doing well

by customers that's the ultimate test

and by doing that i think we not only

generated the free cash that we did but

we secured that license

day in day out to continue to reinvest

in the business

that's thank you um so as you

you know you're having this great run

you're still relatively young

at that point and then you at that

you know pretty relatively young age

decide to step away

to pursue other interests um what led to

that decision

larry and then what what did you end up

what what were the highlights of this

in between chapter before we get into ge

and we're gonna have a lot of fun with

ge for

in just a minute sure sure well greg it

was really a confluence of events i was

coming in on 25 years

at the company i was turning 50

i had a 25 year business school reunion

i'd been in the chair 13 going on 14

years

and i and i knew that it at some point

i would transition sooner than than most

people would expect even or

even our board perhaps because i'd had a

young or an early start

and i had had a long run and at some

point you know i'm a big believer even

today

that uh at some point the organization

is

can be too deferential too respectful uh

to to the people in charge and i thought

that i could

at an early age take advantage of the

opportunity i'd been given at danaher to

transition i knew i could go to the

board with a number of outstanding

options for them to to choose from

and uh past the the baton if you will in

the way that george

uh had to me with with confidence the

company would would carry on

and they have so you know i look back on

that as a

uh my good fortune to be able to make

that transition

but so thrilled and so proud of the way

the team uh has performed

since uh since i said goodbye

okay and so now then let's kind of take

this forward here

larry um you know you're you're enjoying

this time off

as a senior lecturer at your alma mater

which is terrific

and probably getting a chance to take

stock of what that next chapter would

look like

and then you get recruited uh to join

the board

in april of 2018. i'd say you know

what led to that um and so whatever you

could share

a little bit about that piece of it how

do you end up taking on that

role it's it is a very it's an

important demarcation in ge's history

because jeff

emel at that time is is stepping down

and

john flannery is coming in and um and

you're joining so tell us a little bit

about that

sure sure well greg to be clear i was in

the next

chapter right when i left annaher i i

promise you i had no intention of ever

being employed

full time again uh i

uh if i had wanted to be uh a public

company ceo

i i probably would have stayed where i

was or or transitioned

sooner but i was very keen to get into

the classroom

start anew and learn to teach

unfortunately

hbs invited me up to do that

that's what i was doing in the fall i

spent a lot of time out in

out west in colorado in the winter

skiing

and was spending a good bit of time in

the spring and summer at fenway park

life was good more of a boston than a

mclean base

but that that was in essence the uh the

plan and from time to time i snuck down

to costa rica

and caught a bunch of sailfish in blue

marlin so

uh one of my colleagues ironically at

uh hbs uh kevin sharer a ge alum former

amgen ceo

uh had been talking to some of the ge

board members and the new ceo john

john flannery john was in the process of

resetting the board

kevin uh introduced the two of us we hit

it off

and john dewey's credit was really keen

to

uh have a board albeit a board that was

shrinking by about a third 15 18

18 to 12. that was a major move yeah no

it was uh we can talk about that if

you'd like but

uh to john's credit he uh he wanted

the experience that that i'd had at dan

or her

right in terms of not only managing a

portfolio of businesses but going

through

uh tremendous change uh critical capital

allocation decisions

uh in the room and i thought john was

somebody who

really wanted uh the help he i thought

he was somebody who i might be able

to uh help in that fashion and as you as

you said in the introduction

i joined the board along with two others

as part of that

board transition uh in the spring a

couple of years ago

and so six months in

boom you're named the ceo in october

of 2018. tell us a little bit give us

some

insight into you know that chapter for

you

because that's a pretty major step for

you

yes and uh you know i i had talked to a

number of people

about joining the board and they said

just be careful

don't let that be a slippery slope if

you have no intention i

said out loud let alone to them

privately i have no intention

but over the course of that summer as

the new board was

was set and the challenges the company

was facing

uh became more clear i i think the board

took the view that

a little bit more experience in that ceo

chair

was probably what the company needed

right and it was in in no way

i i think uh a criticism of john it was

really just a

uh an analysis of where the company was

at uh at that point in time the board

came to me

i said no twice uh consulted a number of

friends who said

don't but ultimately it was a friend of

mine

you know we were talking earlier about

our friends at brown advisory

my good friend truman siemens up in

baltimore some of the council members

may know

truman uh who said you should do it

and i i give i give truman a bit of a

credit here

because as we talked it through ge

an incredibly important company to our

country

and i would argue the world it was clear

the team needed leadership

and i thought some of what i had done at

danaher would be relevant

my time on the board also gave me a

perspective that this was probably the

industrial challenge of my generation

if you will right and it it it's such a

big challenge

uh to unlock and unleash the value

inherent in this business

you put all that together and

uh i came around and told the board that

i would do it

uh and no regrets i walked in the first

of october greg as if i had

never left uh the the role

and it's been uh just a

a very fast what 25 months now

uh 26 months 27. it's been

uh it's been an honor yeah uh it's been

a lot of work

but it's also been a joy to to be

with this team doing the work that we're

doing

so larry this is great and i and i think

there's some lessons of leadership here

because um

i'd like to kind of if i if you don't

mind take your

tenure there that 27 months talk about

the first three months

what i call setting the table the first

90 days then talk about 2019

and then we're going to take apart 2020

because

there was a lot you faced in 2020 as we

all those of us who are

leaders and ceos we we had our share of

unanticipated

unprecedented activities so let's talk a

little bit about the first 90 days what

what did you do what was

what was the most important agenda for

you

sure well greg that fourth quarter of

2018 went by in the blink of an eye

right i mean here i am walking in first

outsider

ever no one was really expecting it

i'd been on the board what six months

some people think that when you're in

the boardroom you know everything

i think a lot of us know better right so

there were there was just

a whole host of people to meet uh

businesses to to learn and and

understand at a deeper level

a vocabulary and an operating routine

that was very different

than the one that i was accustomed to at

danaher

we were dealing with some significant

deleveraging

uh issues we had an ipo of our

healthcare business on the boards

and we were trying to put together a

budget for the the following year

so everything was on the table right

at the same time and i was still trying

to find my my way around the company so

again we we tried to very quickly

establish a routine

and this is where i think having been in

harness for 14 years albeit

at a different company having managed a

portfolio

as opposed to a single line business

helped me begin to lay in

some cadences uh that just

reigned in some of the uh the activity

and some of the chaos

and of course the irony is so much of

what i laid in

was what became instinctive over the

course of 25 years at danaher

much of which was modeled back

uh in the early days on a lot of what we

knew about ge

i remember george sherman the fellow who

hired me and who i replaced as ceo

cut his teeth at ge under jack welch

right so it's you follow that arc it's

it's interesting but it was

uh telling in that in that

fourth quarter as we began to take

action

some of the folks who had been around a

while would give me these uh these

knowing nods we used to do that

we can do that again and that's that was

that that gave me hope at a time when

you know there were others who were

obviously quite critical and perhaps

uh without hope relative to where we

were headed

sure i mean you know obviously you spent

your your time at danaher 25 years

in a private company so here it is now

you come into

uh a public company setting as we call

it the 13

week treadmill that quarterly

performance rigor like you said

q q4 2018 went went by like that

how much time were you able to spend on

some of the critical building blocks

like

people strategic planning how did you

balance all of that

yes well

my principle first and foremost is it's

all about the team

right so despite all of the the the

activity that goes on

uh i was really taking stock of the team

right not only in terms of whether we

had as my friend jim collins likes

to say right on the bus but whether they

were in the right seats

the company had really not gone through

anything

uh along the lines of a strategic

planning process per se at the business

unit level

in a year or two for me that's always a

critical exercise in the summer you want

to do it all the time

of course but doing it in the summer

ahead of a fall budget

uh development i i think is a really

good way to go about putting together

the the next 12 months of a financial

plan

and we didn't have that we came around

in 2019

and laid in the first pass of a

strategic plan

cycle that has really served us well i

think in in subsequent

years here but uh it was really

all about trying to sort through whether

we were structured in the right way we

ended up making some significant changes

in our power business

as you may be aware really trying to run

it less as one business

and more uh at the at the individual p

l level at the same time we knew

we had a deleveraging issue that was

serious so we made a decision to move

away from the

ipo of the healthcare business to a

trade sale

of our biopharma business ironically to

dan or her

but he gave us an opportunity just this

past year's covet was taking

shape to close that transaction we got a

20 billion dollar check from my friends

uh on pennsylvania avenue and and that

really helped us

weather the storm that coveted

represented so a whole host of things

but again greg

it's it it was then as it is now

all about the team and making sure we've

got the the people that we need and and

they're ready to go

clary you you you hit the nail on the

head when you said it it's team it's

people

you know obviously ge has a

an incredibly rich history that you

referenced here jack welsh

um you know he his passing in march

of 200 this of 2020 obviously a big

event that you all went through um

he put a lot of emphasis on people um

you know in fact in his best-selling

book straight from the gut and winning

he talks a lot about people culture and

how negative culture can actually

destroy a business

um i was wondering how are you changing

the culture

of ge for the better and how does how do

you keep it improving

yeah well jack

jack cass even today i think a large

shadow

at ge uh

i had the opportunity greg uh the summer

before

uh jack pass to go out to his place in

nantucket

and sit down and talk about things was

first time

since i've been hired that we had an

opportunity to speak at length

and i'll remember vividly jack

leaning over and asking so larry

how are you running ge and for somebody

who had studied

ge in business school again for all of

us in the 90s right ge loom large

for jack welch to lean over and ask me

how i'm running a business let alone the

business he led

for 20 years uh that stays with you

uh sure the uh his service

in in march was uh it was a love fest

right so many people

over over years all walks of life uh

clearly had been positively impacted by

jack

and i think i read all of his books

and that influenced the way we ran dana

her

again back to the team the team driving

culture

there are a lot of wonderful aspects

about the ge culture i think the ge

culture certainly tested not only

uh with the various challenges that we

inherited but also with

with covid but i think what we've tried

to do

is also be very clear about the

leadership behaviors

that we want uh our leaders to embody

in what they do day in day out in fact i

had 800 ge leaders from around the world

greg

together earlier today for our kickoff

meeting

and we talked a lot about those

leadership behaviors

we talked about humility we talked about

transparency

and we talked about focus and

interestingly

despite all the strengths that we have

at the company

humility is probably not something as

one of our leaders said earlier today

we've talked a lot about transparency

for me is telling

uh telling it straight as jack would

want right the good and the bad

and the bad sooner than not uh

and he's a company with tremendous

capabilities let alone ambition

but that doesn't mean we can do

everything and to be folly to try

right so we talk a lot about being clear

being focused what are we going to do

and what are we not

going to do so those are the things that

we're trying to drive culturally

but we're big believers that you just

don't

change culture from the bully pulpit if

the ceo bully pulpit if you will

you really change culture over time with

the way that you work

we talk a lot about the lean

transformation really borrowing from the

toyota production system

what we refer to at danaher is the

danaher business system

to really change the way we do what we

do day in day out

and doing it with those lean principles

in my experience

ultimately really does embed humility it

makes transparency instinctive

and focus comes easily so that's what we

aim to do

and how we're doing it sure let me ask

you

i know that during one of my prior lives

here at uh

as a long time tenured partner at kpmg

we had the benefit of doing uh pursuit

of malcolm baldrige during our time

there

and we actually studied ge's session c

and the values performance matrix i'm

curious

are you still using that accountability

framework

um and if so tell us a little bit about

it

well uh greg with due respect to michael

j fox

we've had a little bit of back to the

future and and what what what i mean in

that regard

hopefully everybody knows what we're

talking about but but if not

uh i think jack was was famous for

really

ranking people rating people on on two

dimensions

uh how good are your numbers and are you

walking the talk with respect to values

and if

you're knocking the ball out of park

with respect to the numbers

uh but you're a pain in the you know

what if you're not

walking that talk we don't have a lot of

time for that

right i think over time the company and

i don't have all the history

i've only been here but i'm not even two

and a half years

moved away from that at least

mechanically

but kevin cox our chro

and i in the rest of the leadership team

have kind of gone back to that

so when we sit with the comp committee

here in a couple of weeks that will be

part of

of how we talk about where uh where we

are performance is critical

certainly where we are today vital but

we want to do it in the right way we

want to do it

so we can sustain it over time and

talking about values

rating and compensating people for how

well they live those values

is uh just a vital part of that sure

well i mean you're known for being a

values-driven leader so it's it's

terrific that

deceive you you've as you call it back

to the future re-embrace that

it's i think for those of us who've been

in leadership roles know that

that values performance matrix is really

critical to getting the best leaders and

you referenced

jim collins and we we call it that level

five leader

that has that unique blend of that

indominus poll

will if you will that willing to win

that kind of jack

welsh but also combined with humility

um right uh so anyway sorry let's

i'm sure that here it is you're rolling

along 15 months in and

and march it's jack's passing and then

march also is the real

hit for us for the first time that we

really feel the impact of the

coronavirus cope at 19.

how has it impacted you and of course

you have one of your most

high performing segments really impacted

by that

the aviation division so tell us a

little bit how did you manage

what were the things that you thought

were most important during that first

30 days if you will sure sure well

uh we have a large healthcare business

as you know primarily

in diagnostic imaging a significant

position in china

so we were beginning to get a sense of

what was happening

from you know frankly wuhan back back

in january but of course we didn't

extrapolate

uh those signals into what uh has

unfolded here

around the world greg we came into 2020

i think with a very clear

plan we knew rd leveraging was

on its way the check was in the mail if

you will from from danaher

for the the biopharma business

operationally the setup was such that we

knew we had to continue to demonstrate

progress on our turnarounds of both our

power and renewables businesses

and we felt very confident we could do

that and we had

time to do that not only because the

the 20 billion dollars was weeks away

but because our aviation business our

largest business

was really just trying to keep up with

demand and our healthcare business

despite the sale of biopharma was going

to be able to focus

on really optimizing their operations

without the distraction of the ipo

so we knew 2020 would be a bit of a year

of transition

and if we can only cash that check and

get 12 months of

further progress on the turnarounds we'd

enter 2021

in uh in good shape and then as you say

bam right what the way we went

at covid in its simplest form was

first to just embrace the reality right

the world doesn't end very often however

uh it's easy in those early days to

think well this is temporary i remember

a number of folks thinking

i've seen this before this is sars this

will go away don't don't overreact

i think what we tried to do was embrace

the reality

be somewhat conservative in thinking

about how things could play out

we were quick to then despite the plan

we had laid in

redefine winning for 2020 and in some

instances that was just

getting through the next day's worth of

production we have a very large service

business greg over half our revenues are

in services

all around the world with planes not

flying with plants being closed borders

being shut it was tough to move people

around

the next just simply getting the next

outage completed

was winning right in a uh in a crisis

situation like that

and once we had let reset the plan we

really wanted to get back as quickly as

we could

to executing we knew it was going to be

a very different year than the one we

had planned for hey that's life

the best companies get uh get on with

things and during the course of the

second quarter

we saw a fall off in our aviation

business

that was just breathtaking right global

departures and um

i watched daily was down the better part

of 80 percent

our health care business as

clinicians and practitioners were

pivoting to to the pandemic

stopped buying in a number of areas our

core products

fortunately we were on the front lines

we saw

our activity our volume levels and

products like ventilators and patient

monitors

soar and while we were happy to help and

it was

decent business uh the rest of our

business was under some pressure

fortunately our power and renewables

businesses

really were not impacted we were anxious

about that and we were anxious

all through the year but they continued

to make progress we ended up taking a

number of

cost and cash actions we've reduced

costs by about 2 billion

cash to the tune of 3 billion and slowly

health care came back

aviation still down departures today

were uh we're down north of 45

around the world given uh the recent

uh outbreaks here right so it was a year

where we had to pivot quickly to a

different plan a different operating

model but in many respects

consistent what we were doing we talked

about lean earlier we talked about

values

we tried not to come off of that at all

even strategic planning you asked about

that earlier

there was a moment in the spring where i

thought gosh the last team this

last thing this team needs is to spend

time thinking about where we're going to

be in five years

when the next five months are up for

grabs right fortunately we said

we'll get through this let's do what

we're doing we took a

good first pass last year we can build

on that we will be here in five years

and we intend to

to be in a much better position so those

were the sorts of things that we did

to get through 2020 and you saw you may

have seen the results that we put out

on tuesday we ended up finishing well

in the fourth quarter uh four point four

donation

cash gave us an opportunity to actually

be free cash

positive for the year lots of successes

across the businesses still wrestling

like we all are

with this awful pandemic but i couldn't

be prouder

of the way the ge team embraced that

reality

reset the plan and just got on with life

yeah your performance uh last quarter

was outstanding i mean

you know cash was 2x what you would give

it and

given in terms of guidance it was just

uh a hallmark for

the things that you're doing and i think

for those of us who are

listening to you today i'm we're taking

notes in terms of

the your steps and and the lessons which

uh that can be realized from what you've

shared with us today

let's talk i know i'm coming to the end

and i know i have to be sensitive to

make sure that my

my uh i have one question coming on let

me shift gears just real quickly to

technology i mean we are the technology

council

and technology is rapidly transforming

the way uh the world in which we live

and work and i'm just curious from your

perspective

um what role is it having and what how's

it impacting ge

um and which businesses are being uh are

either leveraging it or being impacted

by it most right

greg one of the things that uh has been

so enjoyable

in my time here at ge is to to see

our technical prowess up close

right when you you look at our portfolio

today

and the leadership we positions we enjoy

relative to the energy transition

how we're leading in precision medicine

and the way we'll shape the future of

flight

that's all rooted in long-cycle

breakthrough technology that

has been and will continue to be under

development and applied

in those in those various businesses so

ge hasn't done what it's done for over a

century

right back to edison without big bets

close to the market close to customers

in a host of ways

clearly uh like like many companies

we're trying to digitize

everything that we can in that in that

same way

uh whether it be our internal processes

the way we

deliver products we had a presentation

earlier today with respect to how we're

bringing ai

into our women's health ultrasound

business to help clinicians deliver

uh better care let alone in our service

business

right how we are using a host of

different technologies

to simplify and improve the way we

inspect

the blades on a wind turbine something

that's incredibly important

in in the face of the energy transition

so technology is at the heart

of what we do at ge it's one of the real

strengths again over time

and as we move forward we generate

better results

we're very keen to make sure we're

putting as much money back into the

business in that way

as we possibly can thank you larry and

i'm going to shift gears here

um and allow my first question there uh

dr karen

sanders from virginia tech to kind of uh

come in here and hopefully

share a question with you here is that

all right larry please hi

mr cult this is karen nealy sanders how

are you today

very well dr sanders just call me karen

okay i uh i work at virginia tech and my

job is

associate vice provost for college

access and my question relates to

workforce development

recent reports indicate that there are

more than a million unfilled technology

related jobs in the u.s

and approximately 60 percent of the

unfilled uh manufacturing jobs are due

to the shortage of applicants with

adequate competence in science

technology engineering and math skills

in order to deliver employees with the

knowledge experience

professionalism and soft skills

preferred

or required by business and industry we

must extend our outreach

to and recruitment to all communities

across the united states

what are your recommendations on how

k-12

higher education and general electric

can work together to develop and train

a competent and diverse technology and

manufacturing workforce

dr sanders it's an important topic for

us we i mentioned the leadership

call that we had earlier today we were

fortunate to have

david thomas the president at morehouse

college

in with us for for a while talking about

a number of these

uh challenges that we have you know i i

can't speak with

any real expertise relative to k-12 and

in higher ed but i know what we're

trying to do at ge

is to be clear about

where our needs are yes where we can

provide real value early on

uh in the development of of the next

generation's

uh education and and skills yes for us

we can support our local communities and

we try to do that

in areas where we have large presence

like cincinnati like the capital region

in new york

uh two examples and we've got a host of

ge people who are very keen to get into

those programs

yes on on a on a both professional basis

and as as volunteers

to the extent that we can then create a

bit of a pipeline

early career be it a a high school

internship certainly during college

a little bit easier i hope we're

providing opportunities for people not

only to be

exposed to those types of uh those types

of careers

give them a a running start i don't

think certainly at ge we've we we have

the

the silver bullet as to how for that but

i do hope that

uh over time will prove to be part of

the solution

okay all right thank you mr culp thank

you

larry let me you know we started going

down this path and let's let's continue

it i want to pull a thread

clearly the social unrest here this past

spring

shown a very bright light on d and i

diversity equity and inclusion

and the workforce and i'm just curious

what were you know how did you

respond during that i mean i know a

number of the area leaders we took a

very

sharp stance and then also took uh some

action internally in our organization

i'm curious what what did ge do

well i think we were keen greg to

look first in the mirror and to

understand

where we were and how we could be better

right so i think it was a a time of of

listening and reflection frankly for the

ge leadership team

both inside the company and outside the

company we all learned

a great deal over the course of the

spring and summer

frankly when i joined the company two

years ago we talked through a whole host

of the uh the priorities

given uh where the company was this was

not on that list

not not by design but we had more more

pressing

uh issues but i think we clearly by uh

by by labor day

uh put this on the list right as a

priority for the company

and hopefully not in a way that uh

is uh is is is popular uh and

and just following along but because

it's really important to ge

uh one of our young diverse leaders put

it very clearly to me

if we want to have the best team we need

to make sure we've got the best team

coming from

all all walks of life and they need to

be comfortable

at ge she's got to be a place where

they're going to do their best work

so we reinstituted a chief diversity

officer

we fortunately had a long-serving senior

leader

who has taken on that role uh we put

similar roles into each of our

businesses

i think as importantly they've been able

to lead

cross-functional efforts using some of

our lean tools root cause analysis and

problem solving

to really get into the details of where

do we have issues is it recruiting

is it an early career development i

would like to go to gary and let him go

live

and and in doing so what we're really

trying to drive is action at the point

of impact

again there are perhaps easier

ways to create headlines what we're

trying to do is drive results at ge

and and if you will tackle the diversity

and inclusion agenda

very much the way we're trying to tackle

the rest of the agenda we've got across

the company

sure larry this is terrific i mean i'm

sorry i had

i thought i was on mute i was reaching

out to a colleague who

who wanted to ask a question here but i

i

you know i think what you just indicated

is probably the most important

and that is our response as a pillar of

society

meaning leaders of american industry

cannot be perfunctory during this era

and and so we're

all like you taking it very seriously

putting it

um labeling it as a strategic priority

um and it's it's great to see and you

know i always believe that it's that

diversity and

and i don't mean just ethnic it's

geographic it's

um it's of thought

and and style that that tension

creates the spark of innovation and and

i think we all

as society benefit from from having that

diverse and inclusive culture so

it was great to hear your response let

me turn to gary shapiro

uh who's the president and ceo of the

consumer technology association

and i'll let him ask his question great

thank you

greg and thank you larry for sharing

your insights with us

ge has been a classic iconic american

brand for many years and i

very much enjoyed jack welch and

listening to him and reading his books

and then he was followed by a series of

leaders that seemed to switch the

company around and

widows and orphans and others suffered

obviously as a share price cratered

and um in listening to them speak and

reading what they said it seemed that

they shifted the policy of ge to be one

that was using lobbyists

and trying to get most of its money from

the government

one way or the other and i was wondering

under your leadership if that

government gives us the money first is

still

the approach or are you going more

private sector which way you heading

well gary i don't i don't have all that

history um

so you're gonna be a little bit smarter

about that than i am but i know when i

walked in

uh i can't quote the exact fear but the

vast majority of what we do

again in aviation and power and

renewables and and in health care

in the us and frankly the world over is

in the private sector

so we we certainly have some important

relationships

our aviation business of course serves

the pentagon

uh on an emp on a number of important

platforms

uh but we're really trying to be very

close to our customers our private

sector customers

uh first and foremost so i don't uh

i i i don't see us as being overly

focused on on on washington as a source

of

funding or or business if there are

opportunities there of course

we're happy to serve but that that's not

the ge uh that i know today

thank you mitch thank you larry and i

know we're coming to the top of the hour

here

uh any you know any last question here

would be

anything you want to share with us for

fun of course i we already learned that

you're a red sox fan

and i already have plenty of comments

and chat here about the

the new yorkers responding uh to that

and for me i'm a dodgers fan so all i

know is it took 32 years to get to where

we are

and uh i was glad to see us get a

championship anything

fun that you're going to be doing this

summer well keep in mind the dodgers won

because they stole mookie bets from us

we we all know that to be true well

let's hope that uh come summertime

uh the combination of the vaccines and

warmer weather

have enabled us to get back to some

semblance of normal

and if that's the case i i hope to have

that fishing rod back in my hand

and catch a couple of fish at least on

the chesapeake if not down in costa rica

well larry we can't thank you enough on

behalf of the northern virginia

technology council and

bobby kilburg and jennifer jennifer

taylor

we thank you for joining us today and we

hope you have a wonderful

2021. we're looking forward to great

things from

ge greg great being with you thank you

all right bye-bye

thank you larry and greg for that

fascinating discussion and thank you for

for attending today's virtual event i

hope to see you at

future nbtc virtual events this winter

please stay and network with fellow

attendees in the social lounge

i hope you stay safe and healthy and

have a great rest of your day