GE’s Talent machine: The making of a Chief Executive Officer
While most companies have difficulty producing sufficient quality candidates for top management succession, how has GE been able to create a surplus? What philosophy, policies, and practices have made it a "CEO factory" as Fortune called it, and "easily the world’s best machine for churning out corporate talent" as The Economist described it? How does GE "Build a Leadership Brand"?
The GEs Company has discovered that the ideal credentials for a CEO have undergone radical changes. In fact never have the set of choices required to be a CEO changed as fast as they have in the past five to a decade years. The company has been able to create surplus CEOs by recruiting younger people in senior management and administrative positions like human resources managers, finance officers or any other management position. The company then exposes them to a variety of departments in the company. They are also exposed to as many experiences as possible both within and without the company, outside the country and they relate to people of different cultures of the world. Summarily, GEs Company gives younger managers an opportunity to operate big units. As these younger managers age, they abundantly accumulate relevant requirements, experience and confidence that enable them to measure up to the expectations of other top cadres of work within the company for instance filling the positions of CEO in the company and even in other companies.
The GEs company are guided by the philosophy that times are changing and only those companies that will survive in these complex times are those that are able to find and hire the right kind of people, give them the right training, experiences and expertise in their right positions so as to enable them to steer the company in the right business direction and hence maintain its leadership position globally. By doing these the company is able to maintain its brand of leadership among the corporate.
2) How generalizable are the GEs management development policies and practices? How transferable across cultures, industries and companies?
The company has discovered that there is a dire necessity to interact and dish up directly with a wider assortment of audiences, persevere with intense pressure and keen monitoring by shareholders, champion ethics and uprightness all over the organization and outside and abandon the old fashioned command and power perspective with the board and the business. By realizing and doing this, the company is able to transfer these practices across other cultures, industries and companies. These further backed up by their strategic positioning at the leadership and therefore they command a lot of respect hence easily emulated. For instance, other companies may be interested in the way the company manages its affairs and executes its operations on a day-to-day basis.
3. As Jeff Immelt, is it time to tune up or even overhaul GEs management development policies and practices? Specifically, how would you deal with proposals to change the vitality curve, MBA and international recruitment, and the executive bands?
As Jeff Immelt, I would say it is time to tune up to GEs management development policies and practices. There is no reason for overhaul GE’s management policies and practices because they have stood the test of time and this is evident of their workability.
Given proposals to change vitality curve, MBA, international recruitment and the executive brand, I would look at them critically to find out if they would derive more benefits and if they can help the company in any way to maintain the leadership role it is now enjoying. I would also analyze them to see if they are sustainable and do not come with any extra/hidden cost to the company and if they assist the company in dealing with contemporary business challenges, if they do then I would give them a thought.
4. What lessons do you take from this case? Reflecting on your analysis, positive or negative, of GEs development of its management pipeline, what do you see as the key success factors in making talent management what Immelt claims is an important source of competitive advantage for the company?
Finally, a good CEO is one who held management positions in their early years of their careers where they get the right experiences before they get to be CEOs.
5. How does GE create leaders who will lead at the Enterprise Level?
GE creates leaders by apportioning various management responsibilities and tasks to young employees where they gain a wealth of relevant experience that comes in handy when appointed at higher cadres of management or administration. These people can therefore be CEOs once they advance or approach the apex of their careers pyramids.
Bass J. (2008) Business Organizational Leadership in Business Leadership; CA, San Francisco