Will GE’s new CEO remain committed to Boston?
Jeff Immelt, we hardly knew you, and yet you’ll always be celebrated here as the guy who delivered General Electric to its rightful home.
Now that you’re stepping down, the only question is: Does your successor feel the same way about us, and should we feel the same about him?
In an interview Monday at GE’s headquarters in the Fort Point Channel district, incoming CEO John Flannery said he played no role in the company’s decision to relocate to Boston, but that doesn’t make him any less enthusiastic about being here now.
“If I had gotten a ballot, I would have scribbled in Boston,” said Flannery, 55, sitting in a conference room with Immelt.
Phew. We should hope so, after the city and state ponied up to $150 million in incentives for GE to come here.
Flannery, who will move from Chicago, professes to get us. His parents and grandparents are from the Boston area; he is a Red Sox fan with a dog named Mookie Betts; and, as if to prove he’s Bostonian enough, Flannery comfortably breaks into a strong regional accent to declare that he is “wicked hard-core” for the city.
GE said on Monday that the 61-year-old Immelt will relinquish the CEO’s office Aug. 1, nearly a year after relocating the company from Fairfield, Conn., where GE had resided for four decades.
Immelt had famously talked about how he got tired of staring at the deer outside his suburban office. Boston was a place where GE could accelerate its digital transformation, surrounded by engineers and entrepreneurs coming out of Harvard, MIT, hospitals, and biotech labs.
His successor caught the same bug. “It’s just an incredibly dynamic environment,” Flannery said.
Flannery currently runs GE’s health care division, and his selection as CEO should bode well for the company’s commitment to a region where the medical-industrial complex is one of its biggest economic engines. He already knows his way around our teaching hospitals, and just last month announced an ambitious initiative with Partners HealthCare to use artificial intelligence to improve medical care.
“You couldn’t do better in terms of Boston and health care in picking Flannery,” said Chris Coburn, chief innovation officer at Partners.
Coburn said he doesn’t have any inside knowledge about the GE board’s deliberations, but to him Flannery signals that the company wants its big bet on Boston to pay off.
“What is the message the board and Jeff is sending? Not only are we committed to Boston, but we are delivering a guy who can help drive the community to the next level of global leadership,” Coburn said. “It is going to be Flannery who makes the results of the move tangible.”
Before overseeing the health care business, Flannery spent a good chunk of his career abroad, managing GE Capital in Asia and later GE operations in India. He also served as president of GE Equity and led business development at GE Corporate. He played pivotal roles in key decisions, such as the shrinking of GE Capital and acquiring the power and grid business from the French industrial behemoth Alstom.
Since 2014, Flannery has been the CEO of GE Healthcare, a business of 55,000 employees and more than $18 billion in annual revenue. Alone, it would be one of the biggest companies in Massachusetts. Immelt also had run the division, before taking the top job.
Immelt’s legacy after 16 years as CEO will be his brazen makeover of GE from a sprawling conglomerate to a tech company — an Apple for modern industry that is bringing the smarts and powers of the Internet to jet engines and MRIs.
Such change takes time to take root, and Wall Street was losing its patience. Immelt’s legendary predecessor Jack Welch notched astronomical returns over two decades, while investors in Immelt’s GE would have made more by putting money in a plain-vanilla index fund.
GE’s stock rose 3.6 percent Monday on news of Immelt’s departure.
Flannery has no plans to stray from Immelt’s vision of GE building out the industrial Internet.
“We won’t change that one iota,” Flannery said.
In running GE Healthcare, he saw firsthand the ability of technology to transform that business, from making radiologists smarter to making diagnoses more accurate. That concept applies to GE’s other business lines, too.
“It is a quantum change of what is achievable in terms of productivity and outcomes in health care, in power, and in aviation,” he said.
Immelt’s departure may come as a shock after a whirlwind courtship of business and political leaders. He seemed to be settling down, even buying a home in the Back Bay. But just like that, he will be out.
In an interview, Immelt said he doesn’t know if he will remain in Boston but has no regrets about uprooting the company.
“Without a doubt, I think everybody in the company thinks coming here is one of the best things we have done in a long time,” Immelt said.
Immelt could not have been any more different than Welch, his flashy predecessor. Immelt has been the anti-Jack, the Midwestern math major partial to sweater vests.
Let’s hope Flannery, for Boston’s sake, is cut from the same cloth as Immelt and stays the course he has charted.