Longtime GE leader shares lessons of crisis
Graduate students got a firsthand look at the financial crisis -- as well as some of its learnings and lessons -- from an executive who helped lead GE through the “Great Recession.”
Michael Neal, former vice chairman of GE and chairman and CEO of GE Capital, visited Fisher’s campus as part of the Cullman Executive Luncheon Series. Neal, who retired last year after a 34-year career with GE, currently serves on the Board of Directors of JPMorgan Chase & Co. and is a member of the board’s Risk Policy Committee.
He described the period prior to the crisis as one in which too many thought that no story -- including that home prices would only go up and the global “well of liquidity” was unlimited -- was too positive to be believed. Quoting Howard Marks of Oaktree Capital, Neal concluded: “Nothing is more risky than a widespread belief that there is no risk.” Even those who anticipated difficulties were caught off guard.
“Many people saw a crisis coming, but they didn’t see this one,” Neal said. “They thought they were going to be hit by a bicycle, and they got hit by a truck.”
The lessons learned, he said, are important to remember for the next generation of leaders. He urged students to stay connected with the world in order to better anticipate events, continually test the ability of their organizations to withstand a crisis, be willing to revisit possibilities that may have been ruled out, and place a greater emphasis on communication.
Ultimately, however, leaders will be tested by uncertainty -- in terms of business and character.
“You have to learn how to make decisions without perfect information,” he said. “I tell people that I’m good at making decisions quickly and I’ve been lucky enough to be right 77 percent of the time. It’s also more important to be wrong sometimes than to be indecisive. But you have to be very realistic that if you’re wrong you own it and fix it -- and not be defensive about it.”
The Cullman Executive Luncheon Series is designed to connect students with senior executives from top companies and organizations across the globe. MBA candidate Steven Gangloff said being able to engage with leaders such as Neal is an invaluable part of the student experience.
“Mr. Neal provided a candid and clear view of many of the challenges that we will face as we build our careers and advance in the global business environment,” Gangloff said. “Having access to that level of expertise and insight is an incredible complement to our course work.”