Immelt could bring stability, respect back to Uber
Front-runner for CEO led overhaul of GE
Uber’s search for a new chief executive to replace ousted co-founder Travis Kalanick echoes with one name: former General Electric CEO Jeff Immelt.
Crazy choice? Or inspired? The 61-year-old careerist in June announced plans to retire after 16 years, staying on as chairman until Dec. 31. He was known as much for his overhaul of GE — shuttering stagnant business divisions and pushing a digital-first agenda — as he was for the company’s underperforming stock, which fell more than 10% this year and 36% over his tenure.
But if reports are to be believed, the veteran of one of the nation’s most storied corporations could be on tap to take over for Kalanick at a rule-busting tech start-up reeling from accusations of workplace sexism, lawsuits from rivals and feuding board members.
That notion makes business experts enthusiastic. They note that Immelt could provide timely professional oversight for a company that has riled regulators and rivals as well as allies, from employees to contractors to tech partners, during its eight-year ascent.
“I think the sun and moon and the stars have lined up on this one,” says Jeffrey Cunningham, professor of leadership at Arizona State University’s Thunderbird School of Global Management.
With his knowledge of the public markets, Immelt would be a solid candidate to guide Uber through an initial public offering. And while a far cry from the tech wunderkinds Silicon Valley prides itself on minting, Immelt does bring some tech chops.
At 125-year-old GE, manufacturer of everything from wind turbines to medical imaging equipment, Immelt launched a digital division and adopted startup strategies, such as empowering subordinates to own their divisions. Those moves inspired GE to take on the slogan “the digital industrial company.”
With his Fortune 500 clout,
Immelt may also counterbalance the influence of Kalanick, who still controls board seats and is supported by employees and investors who think his vision outweighs his leadership missteps.
“Uber’s issues are significant, but they pale in comparison to what Jeff dealt with at GE, which included 9/11, the 2008 financial crisis, unfriendly media,” Cunningham says. “He’s also the ‘Travis Killer.’ He’ll keep him in a cage because (Kalanick) will respect the big lion in town.”
Where Kalanick was known for sharp elbows and his “always be hustlin” mantra, Immelt mixes “sophisticated large system execution” with “a boyish spirit and enthusiasm,” says Yale School of Management’s Jeffrey Sonnenfeld. “He would bring a foundation of much-needed personal trust, global sophistication and respect.”
Kalanick, Uber, GE and a representative for Kalanick declined to comment for this story. Uber representatives said the company has not issued an official deadline for announcing its new CEO and would not comment on a late July report in Bloomberg that said Uber HR boss Liane Hornsey speculated a CEO would be announced within six weeks.
But experts say there’s a lot about an Immelt-Uber connection that makes sense. Some note that his international push at GE, whose overseas workforce jumped to 65% from 43% in 2001, could fit well with a ridehailing company that is in 80 countries and whose visions of global domination recently hit roadblocks in places such as China and Russia.
Immelt also could help with Uber’s corporate governance and regulatory challenges and perhaps take a strategic knife to costly business ventures to shore up the company’s financials.
On a positive note for any incoming CEO, while Uber continues to be a money-losing operation, it has been narrowing its quarterly losses.
Gross bookings doubled from a year earlier to $8.7 billion, Uber spokesperson MoMo Zhou said, confirming financial details first reported by Axios. Adjusted net revenue of $1.75 billion was more than double that of Q2 2016 and adjusted net losses fell 9% to
$645 million from the first quarter and 14% from a year ago.
Many are puzzled that Uber’s
14-member leadership team might seek out an executive at the end of his career who is not steeped in a Silicon Valley ethos.
“I like Jeff, but if I’m Uber and I’m sitting down with the recruiting firm (Heidrick & Struggles) to discuss my criteria, I don’t know how you come up with him,” says Michael Farr, CEO of investment management firm Farr, Miller and Washington. “I want a 40year-old Mark Zuckerberg type, someone who came in, hit it big, has an ethical reputation and is looking for the next big thing.”
In fact, another rumored choice, former eBay CEO and current HPE chief executive Meg Whitman, would seem a more natural fit as she would have brought strong tech world credentials. Her appointment might also help Uber reverse its reputation for sexism and an unchecked “bro” culture.
Whitman publicly pulled herself out of the running in late July, although Uber investor Benchmark Capital is still said to be pushing her candidacy, according to CNBC. HPE did not respond to a request for comment.
At nearly retirement age, Immelt could well be expected to head off on a mission to manage his portfolio. But one simple word would explain his taking on the Uber challenge. “Redemption,” Farr says. “You don’t get to where he did in life without being driven. And he doesn’t want to go out to the sound of criticism of his GE tenure.”
The scope of Immelt’s task cannot be minimized. Uber may remain popular with consumers looking for cheap and easy transportation, but the company faces tough rivals and threats to the business model. Rival Lyft has managed to cut into Uber’s U.S. dominance, claiming roughly
23% market share, according to Second Measure, which sells anonymized data culled from around
3% of U.S. credit cards. Uber’s skyrocketing valuation, currently around $69 billion, also has suffered, with some experts suggesting a more correct value is closer to $50 billion, according to The Information. An initial public offering, which many of Uber’s employees have long been counting on, seems tenuous unless Uber can convince Wall Street it has its problems under control.