Culminating a succession plan that has been in place since 2011, GE announced today Jeff Immelt’s replacement as CEO of the company as Immelt prepares to retire. Come Aug. 1, John Flannery, current president and CEO of GE Healthcare, will take the helm. Immelt, currently chairman and CEO, will stay on as chairman of the board through his retirement at the end of the year. In addition, Jeff Bornstein has been promoted to vice chair of GE, but will also continue in his current role as CFO.
Flannery will have some big shoes to fill. Granted, the shoes were big already when Immelt took over from Jack Welch 16 years ago. But during Immelt’s tenure as CEO, the company has undergone major restructuring, more focused on the Industrial Internet of Things (IIoT) and its impact on key vertical markets—power, aviation, transportation, healthcare, and oil and gas.
Immelt has often been heard saying, “If you went to bed as an industrial company, you’ll wake up as a software company.” Though he has clarified that GE isn’t a software company per se, he expanded, “We’re a company that needs to be based in software going forward.” And at the latest GE Minds + Machines event this past fall, he predicted that GE would be a Top 10 software company by 2020, including growing revenue associated with IIoT to $15 billion.
At a GE user summit a few years ago, Immelt predicted, “Whoever uses data best is going to increasingly decide who’s most successful.” Under his purview, GE has spent billions of dollars building its digital business, including the development of the Predix cloud platform as part of its asset management strategy.
“Jeff has positioned the company incredibly well for the future,” said Jack Brennan, lead independent director for GE’s board of directors. “He executed a massive portfolio transformation and navigated the company through economic cycles and business disruptions. Today, GE is a high-tech industrial company with a bright future.”
Digital efforts will continue to be at the heart of GE’s strategy, according to Flannery, who takes over after some 30 years with GE. “During this time of dynamic global markets and relentless focus on technology and operational excellence, there is no better person to lead GE than John Flannery,” Brennan said. “He brings unique experience and a strong skillset to the job. John has spent almost half of his career living outside of the United States and has led complex financial and industrial businesses all over the world, including running GE Healthcare, GE in India and the business development team for GE through the successful acquisition of Alstom. John has had a direct influence on the company’s direction, its financial health and its position as the world’s premier digital industrial company.”
Flannery began his career at GE Capital in 1987, focused on evaluating risk for leveraged buyouts. In the 1990s, he was a leader in the corporate restructuring and workout group, where he was known for his negotiating skills and ability to improve companies’ operations. In 1997, he moved to Argentina, where he successfully led GE’s Equity business in Latin America and the overall GE Capital business for Argentina and Chile.
In 2002, Flannery became president and CEO of GE Equity, leading the business through a difficult cycle. In 2005, he moved to Asia, where he was responsible for the Asia-Pacific region for GE Capital. In 2009, he moved to India to lead the country for GE. While there, he upgraded the leadership team, built the culture and focused on the industrial side of the business, increasing industrial sales by 50 percent in 2011. In 2013, he was tapped to lead business development at GE Corporate where he focused on capital allocation for the company and led the acquisition of Alstom, the largest industrial acquisition in the company’s history. He also worked on shrinking GE Capital, the Synchrony Financial IPO, and the disposition of GE Appliances.
Since joining GE Healthcare in 2014, Flannery has led the turnaround of the business, increasing organic revenue by 5 percent and margins by 100 bps in 2016.
“Today’s announcement is the greatest honor of my career,” Flannery said. “I am privileged to have spent the last 16 years at the company working for Jeff, one of the greatest business leaders of our time. He has transformed the GE portfolio, globalized the company, and created a vision for the GE of the future by positioning the company to lead in digital and additive manufacturing. In the next few months, my focus will be on listening to investors, customers and employees to determine the next steps for GE.”