Larry Culp
Episode 54: In this episode, we dive deep into the remarkable leadership journey of Larry Culp—the first outsider to lead General Electric and one of the most respected turnaround CEOs of our time.
Facing a historic crisis, massive debt, and eroding trust, Culp stepped into one of the toughest leadership roles in corporate America. What followed was not a flashy reinvention—but a disciplined return to fundamentals: accountability, operational rigor, and people-first leadership.
We explore how Culp:
Rebuilt confidence inside and outside the organization
Applied lean principles and continuous improvement at scale
Balanced humility with decisive action
Led through uncertainty with clarity and credibility
Created lasting change without losing the company’s soul
Through real-world examples, behind-the-scenes stories, and practical takeaways, this episode unpacks what modern leaders can learn from Culp’s calm, focused, and highly effective approach.
Whether you’re leading a team, scaling an organization, or navigating change, this conversation offers a masterclass in resilient, principled leadership.
Listen in to learn how steady leadership can drive extraordinary turnaround.
Let me start with the scene. It's late 2018 Inside a GE manufacturing plant, machines are running, but morale is low, posters on the wall still talk about innovation and excellence, but workers have heard it all before. The stock is down, layoffs are rumored, pensions are in question. Then word spreads, the new CEO is coming, not for a speech, not for a press event, just to walk the floor. Larry Culp shows up in a simple jacket, no entourage, no cameras. He stops next to a technician, points at a machine, and asks, Why does this one stop so often? Not How are morale not what do you need from me? Why does this machine stop? That question tells you everything. Today's episode is about that mindset. Welcome back to Leaders, a podcast dedicated exploring the best leaders this world has ever seen, and your number one source for actionable business leadership insights. In episode 54 today we will be covering current CEO of GE, Larry Culp. Larry has formed a turnaround in the GE mindset from that time in 2017 2018 when he first came on as CEO to present day, and he's been the first outsider to run GE and its company's 126 year old history. Today we will dive into who Larry Culp is, what his leadership style is, and how that has been the key to arguably the greatest company turnaround that there has been in business history. So, part one, we will start now, and that is covering where his style came from, particularly prior to GE. He was running the company Danaher, and to understand Larry Culp, you have to understand the Danaher way. Before GE, he spent years there, one of the most operationally disciplined companies in the world. He wasn't famous for flashy products, it was famous for how it was run. Its secret weapon was what he implemented in what is now known as the Danaher Business System, a lean-based operating system built around continuous improvement. At Danaher, learning wasn't an initiative, it was built into how work happened. One example being executives were divided into teams of 10, and each team was assigned a real business problem, not a simulation, not a case study, but a real problem that was hurting customers or the company's performance. Starting Monday, they followed Kaizen, know the customer, observe the process, analyze the root causes. Data brainstorm countermeasures prototype quickly and measuring results. Then, by Friday morning, solutions were implemented, but the real goal wasn't just solving problems like this left and right, it was teaching leaders how to think. There's another example being that when executives were hired from the outside, they didn't get power right away. Instead, they went through a two month boot camp. In that boot camp, they learned the voice of the customer, value stream mapping, standard work policy deployment, the Kaizen way of problem solving, and Culp explained it this way: we force the division presidents to develop a command of the how, so they can teach the how, not just go do that, or but come do it with me, and that mindset really never left him from what he developed at Danaher, that was so, so successful into the mindset and philosophy that he's garnered within the GE framework. Another great story from his Danher days was he learned early that leaders don't lead from PowerPoint slides. One former executive tells a story during a Kaizen week, a senior vice president was presenting a solution, which had all the right makings of what we, what traditionally would be deemed at a great presentation, beautiful slides, perfect charts. Culp listened quietly. Then he asked at the end, did you stand here and watch this process for three hours? The room went quiet. The exec admitted that he hadn't. Culp then said, then you don't know the problem yet. And the meeting ended. They went to the floor, and that was Danaher. Executives weren't promoted for polish; they were promoted for understanding. Another story being new leaders would arrive expecting that immediate sort of power and authority. Instead, they got clipboards for two months. In those two months, they went through a strenuous boot camp, where it's all about walking processes, timing steps, and interviewing operators. One new report, a new hire, reportedly said that I thought I was coming to run a business.
Turns out I was going back to school, and that was intentional from Larry's standpoint. And Culp learned that mastery precedes authority within that right, so the Danner business system, very, very powerful from a pure operational end, and just ensuring that the leaders of the company, in addition to Culp, knew and understood the problems that they were trying to solve, and then had a very stringent sort of manufacturing like process, one in which we will tie into a previous episode, episode 39 A lot of these Kaizen lean principles we also introduced in episode 39 with the founder of Toyota Sakichi Toyota, so there's a lot of parallels there that we will draw from. In addition to that, what we will move on to is Larry, as a CEO, is sort of also known as a teacher. So many CEOs say they care about execution, but he actually practices something different. He saw the CEO as a vital participant in shaping how work gets done, not by making every decision, but by modeling standards. He was sharpening problem solving, establishing behavioral norms. He didn't meddle, he coached, he didn't override things, he elevated, and he didn't hoard all the decision rights. He taught others how to make those sound decisions. His presence in the organization wasn't disempowering, it was actually energizing to the people that he worked for and worked with, because it had purpose to build systems that work even when he wasn't in the philosophy, and that was very similar to Toyota's leadership philosophy. Gemba, the idea of going and seeing and respecting the process, it's why people draw parallels between him and the Toyota style leadership. He believed hands-on leadership wasn't a phase to outgrow, and he once said, too many leaders treat this work as developmental. The best leaders don't. He loved getting in with the team and getting his hands dirty, staying rooted in daily work, and he protected that time, even when investors, media, and boards demanded attention. Before we go into another story that I think helped illustrate that, we continued to see. This theme, and I think Larry, of many of the leaders that we've touched upon here, of the 54 I think he demonstrates one of the more stronger ways and consistencies of being going to the floor and going to where the problems are and understanding those and seeing them, and then emphasizing that to the people that he is working with at GE, he brought that same mindset. One senior manager described an early meeting, they were reviewing a missed target, and the manager expected criticism as a result of that. Instead, Culp asked him, walk me through your process, not why did you fail, but how does work actually happen here. For 30 minutes, they drew workflows on a whiteboard, suppliers, handoffs, handoffs, delays, rework. At the end, Larry Culp said, your people aren't the problem, this system is. Then he helped redesign it. That's teaching leadership. He believed if you build the thinkers, the results will follow. So, while he's forming out a lot of these principles that he was able to develop, I think roughly over 15 to 20 years at Danaher, and really have success and compound that success. He stepped away from that and was initially retired for a bit, and then was on the board of GE, and got persuaded to come back and run GE, and certainly he was the right person to lead that turnaround, but in that case, when we think about that beginning story and the time of 2018 when he's roughly joining GE, GE was a walking chaos and the state of the company was not great, so when he arrived in 2018 he's really walking into a proverbial storm of events. GE at that point had over 100 billion in debt, pension liabilities, accounting controversies, regulatory pressure, investor lawsuits internally as a result of that low morale, fear, distrust, change, fatigue. People had heard turnaround speeches several years at that point before. They didn't believe them anymore. So his first move wasn't really inspirational, it was financial. He focused on cash, free cash flow, debt, liquidity, balance sheet, health. He believed if you fix cash, then everything else follows that grounded GE in reality, and there were no more fantasy forecasts put ahead, and no more optimistic spins on things, just the numbers.
When he took it over, his board number, his board members were even nervous. One director later admitted we didn't know how bad it really was. In his first few months, Larry requested lots of raw data, not just summaries and highlights, but the raw numbers: cash receivables, inventory, liabilities, the balance sheet line items. One finance executive recalled he kept asking for more detail, not because he didn't trust us, but because he wanted to understand. Late nights and spreadsheets, handwritten notes, no grand speeches, just work on early investor calls. Analysts expected optimism. Culp said that will actually take some time. The stock dropped as a result of it, but the credibility and faith that they had within him turning around eventually rose. So, how did he implement that turnaround in practice? Let's walk through some of the principles, and maybe some of the leadership insights that we get as a result of certainly one of the more difficult turnarounds that we've seen within businesses and leaders that we've described here. So, again, we mentioned that cash was first. He obsessed over cash, daily, weekly, monthly basis. He forced his leaders to understand where does the money, where is the money coming from, and then where it went, where it got stuck. No hiding of any sorts within that. He wanted visibility and understanding to all the different cash flows within the business. One GE plant manager tells this story. After review, he noticed inventory piled in a corner. He asked, "How long has that been there? "About six months. "Why? Silence. They investigated, found a scheduling flaw, fixed it, and that freed millions in cash. That happened hundreds of times. In addition to having cash as king, number two principle for his turnaround was simplification. GE at that point had become an empire and had built out so many different business lines that it became almost too many, too many businesses, too many layers, too many reporting lines. He sold what he had deemed as non-core assets and reduced the bureaucracy, flattening the structures, and the empire that he built was more focused on becoming a focused operator of their core businesses. Culp once joked privately, "I need a map to understand our org chart, so we flattened it, fewer titles, more accountability, and we'll draw some parallels here later on to obviously we have covered another GE legend and leader prior to Larry, and certainly not the result of of the financial destruction of GE per se at that point, but episode three was Jack Welch, and Jack Welch was obviously a great leader within GE much prior to Larry Culp's ideas, and so this simplification principle I think he's bringing back a lot of the things that that Jack Welch initially focused on from a GE perspective of if you're not one number one or number two, and you know a business line, then let's sell that off, simplify things, you know, flattening organizational structures, simplifying the entire business helps it run better. In addition to simplifying things, he obviously had, and we've already illustrated this through a lot of these different stories, is that he had incredible operating discipline from Danaher. He brought those daily metrics, clear accountability, the process rigor, performance reviews, managers really had to prove results, not just promise them, and PowerPoint, and the slides that people put together was just simply wasn't enough. At reviews, excuses were challenged. We had supply issues. Larry Culp would then ask, well, which supplier? Since when? What changed? No hand waving. He just wanted to get to the answers and understand them quickly. Number four, transparency. So, before Culp GE really over promised on what they were saying, Culp under promised, he shared bad news early, he spoke plainly, he avoided hype, and trust returned slowly, but it returned. Number five, and the final one here that we will highlight is quiet leadership and building trust. He wasn't flashy. He visited factories, he talked to frontline workers, he asked practical questions. In crisis, he showed stability. When a power division problem surfaced, Culp disclosed it immediately. Advisors warned, "Wait, let's soften it. He refused. We're not doing that anymore, he said.
So, another illustration that he's going to be incredibly transparent about what is happening and tell the truth on a lot of things, which led to obviously some short-term conflict or pain, but it led to long-term trust in the market, trust within internally, and trust within the other leaders that he was helping to lead GE in this turnaround. Another key aspect that we've built on this kind of Japanese lean method of management and leadership style is this idea of Hoshin, so Culp's turnaround wasn't random, it was structured. He led with lean principles, he used Hoshin Conrie, Japanese strategy deployment system. Think of it really as a aligning the whole company around a few critical priorities. So the first step within that was to have a few breakthrough priorities, instead of dozens initiatives, stick to sort of three to five. So, at GE, what that meant was improving the cash flow, reducing the debt, fixing the margins, improving the reliability, and then everything else was really secondary from there. Step two was cascading those priorities to other organizations and business units within GE, so going from the corporate level down to the business units, then to their respective departments, those departments then into their teams, and then those teams getting communicated down to individuals, everyone knew really how that work mattered, and how it flowed into one of those core kind of priorities that he set out. Step three: catch ball, instead of top-down orders. Here's the goal: How can you achieve it? Leaders pushed back, negotiated, reformed. Find better plans and more buy-in. Step four: daily management. Daily metrics were observed: weekly reviews, monthly operational meetings, quarterly strategies - not just a set it and forget it kind of mentality, but a very close eye on how things are moving when it comes to those priorities and metrics that matter. Going into metrics of step five, each goal really had to have leading indicators and lagging indicators, and then ownership of those metrics misses required great explanations of which we've learned Larry could ask lots of different questions to get to the heart of what truly, why did we, why did we miss this revenue target this this quarter, and really trying to get to understand why that was the case. Number step six was a more of a process focus, good results coming from good processes, fixing the supply chains, fixing maintenance, fixing engineering workflows, not just sort of hitting the number, and then one of the final steps here was his CEO involvement, he was personally joining a lot of these different reviews that were happening, and that really signaled, okay, Larry is serious about fixing these problems, and he's going to have a lot of different questions that I need to have answers to in order to get this right. A famous internal story at GE involves a kind of Hoshin Conrie review, the business unit proposed 12 priorities. Culp stopped them. Which three matter most? Silence after debate, they chose three. Everything else paused six months later. Performance jumped. Why? There was incredible focus from those three priorities. Another story being that during that step three of catch ball, a plant manager pushed back on a target. It's unrealistic. Instead of overruling, Culp asked, 'Show me. They walked the process, found the constraints, adjusted the plan, and as a result, ownership skyrocketed. Another key piece is the voice of the customer, and understanding that Larry emphasized in a Danaher principle that was involved directly into GE, is that customers talk and we listen before decisions. He also asked, what will the customer say? Customer insight guided messaging product development operations, but not internal politics and not the ego. At one meeting, teams debated a technical challenge. Culp listened, then asked, What will the customer notice? No one answered. So he called a customer on speaker and asked them directly. The decision was made in five minutes that became legend internally.
So, after he's developed a lot of these principles and leadership style within GE, he's formulating a turnaround, and as part of that simplification that came at a critical decision point to break up GE, so after stabilizing it, he made the boldest move yet, and that was actually to split the company into three different businesses: GE Aerospace, GE Healthcare, and GE Vernova, ending the conglomerate model that GE had operated on for so long, basically its entire harm, 25 year history, that was radical for decades. Their identity, they part of the identity of GE was that diversification of business lines. Previous CEOs really tried to fix it. Culp just put an end to it. Why? Because he wasn't emotionally attached to legacy. He waited, and the balance sheet improve the cash, stabilize the trust, rebuilt. Then he acted strategic courage plus timing. He shifted from operator to architect, and he designed the governance, the succession of that, the incentives that drive behavior, and standalone readiness within the business, breaking, breaking up GE to any outsider, as well as any person within, that was terrifying. Executives within GE were worrying, my division won't survive alone. Culp gathered leaders, he put three boxes on a whiteboard: aerospace, healthcare, energy. He said, these are great businesses. Let's let them breathe. He took a lot of criticism as a result, media backlash, legacy defenders. He stayed calm because he felt incredible conviction that the math made sense with these moves. Cool, so what else was behind the success of Larry and his leadership style? We can't end really without mentioning his quote unquote sensei or mentor that has guided him through a lot of these key decision points, and that is Yokiyo Katahira. Katahira taught him to go see the work, so he's a Japanese-influenced lean specialist as well, and so Larry leaned on him and took a lot of his principles to heart when implementing a lot of these things, and went to Yokyo with a lot of when he had a lot of these key decisions, so one of these other things from those principles was to manage process and to solve problems scientifically, really hone in on developing leaders, focusing on just a few priorities, respecting people through systems, having that kind of teacher mentality, so teaching constantly to the leaders of how he wanted things done and what other people could learn from him. He internalized all of it. That's why he emphasized detail orientation, root cause analysis, fairness, consistency, not charisma. Katahira once told Culp, if you want respect, fix the process. Culp then lived that a young manager once brought him a problem. Culp asked kind of five whys. They reached root cause. The manager later said he didn't solve it for me, he just taught me how. So, as we mentioned, episode three was Jack Welch, the great leader of GE. Jack Welch led GE in a different, obviously, era and in a different way. And so Jack Welch's main kind of leadership principles from episode three that we outlined was winning big, growing fast, and cutting hard with high pressure. Larry Culp, on the other hand, is more around fixing the systems, improving processes, steady execution, and more around long-term focus. Jack Welch really built power as a result of his leadership style. Culp helped to rebuild credibility that GE needed within this different eras and different needs. An old GE manager said under Welch, you felt pressure under Culp, you felt responsibility. Pressure fades and responsibility last. And certainly we, it will be interesting to see how long one Larry Culp stays as on board at GE, and then what that succession, and what his leadership legacy will be. Obviously, no matter what the direction of GE goes from here, I think his legacy will be a lot around turnarounds and turnarounds starting with reality as one of the key lessons here, culture following the systems, one of the key principles that he really tried to drive home, and a part of this turnaround was that cash was king. One of the other things from his standpoint is that one of his greatest assets was credibility and trying to build trust over time. Humility beats the heroics here, and then outsiders in this case, he was the first outsider within GE really to lead it, and he brought fresh perspective in a time where they needed that the most, really.
He also had this mentality of going slow initially to then go fast and really have this turnaround be incredible. Leaders must also be teachers, and finally preserving the core and stimulating progress were key points that Larry instilled. He showed us ultimately that leadership doesn't require drama, it requires discipline, honesty, and systems. He didn't really, he didn't save GE alone, as well. He built something that outlasted him, and that may be the highest form of leadership that he has. Near the end of his tenure, a plant team gave Culp a small plaque, not flashy, it read, "Thanks for listening. That might be the best leadership review ever. He led, he didn't rebuild GE with charisma, he rebuilt it with curiosity, with patience, with systems, with respect, and that's really how leadership lasts. And so, as we've outlined here Larry Culp, just an incredible leader, still leading at GE, and one of the best business turnarounds in history, and that is not done without having key leadership principles that he's instilled and remained consistent throughout his. Career, in addition to not only GE, but really a strong carryover from his excellence that he instilled at Danaher. So, with that, that will be episode 54 on Larry Culp, and we will be back soon here for episode 55 Thanks for listening.
