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At GE, management development is a continuous process
By Ethan Smith
When Jack Welsh, General Electric’s dynamic CEO, underwent heart
surgery last May, there was a chorus of media speculation about the state of succession
planning in America’s top corporations. In fact, succession planning and training is
alive and well in organizations like GE, where corporate universities are playing a large
role in developing the management gene pool.
Succession planning at the executive level used to mean analyzing the
chain-of-command structure in the organization and grooming those individuals considered
to have high management potential. Today, however, top organizations are casting a much
broader net and placing greater emphasis on developing individuals’ adaptability
rather than training in job-specific skills.
Nowhere is this more evident than at GE, whose 12 different
billion-dollar businesses run the gamut from electronics, electric motors and engineering
plastics to domestic appliances and financial services. As GE’s international focus
expanded over the past decade, management development has adjusted accordingly. The
corporation’s three goals are to develop "global brains" (to see things
from a global perspective), to nurture business and technical expertise, and to
incorporate leadership development with these global and technical perspectives in mind.
"We want our managers to be able to see things more clearly, to
speak and motivate people, and to see things from a global perspective instead of a
colloquial one," says GE spokesman Bruce Bunch. "The purpose of the management
development program is to have people function better in everyday situations. It’s an
ongoing process."
Management development begins with GE’s Corporate Entry Leadership
Conference, where approximately 2,000 new hires are brought in from all businesses to
GE’s Crotonville corporate university in New York. During the three-day event,
attendees learn about GE’s global strategy, competitors and values. Heavy emphasis is
put on understanding aspects of all of GE’s businesses.
Transition to leadership
The competencies needed for rising managers are largely defined during
stage two of the process, the New Manager Development program, which is attended by all
newly appointed managers who have attained that position within a year of being hired.
Here, training revolves around easing the transition from working individually to leading
others and high-performance teams. The training is based on the perspective of the
particular region — the United States, Asia-Pacific, Europe or Latin America.
The second part of this stage is the Experienced Manager program, which
emphasizes developing and facilitating the change process, and provides opportunities for
managers to discuss problems or solutions with peers.
Encouraging adaptability and the ability to see things from different
perspectives has been a cornerstone of GE’s management development program, because
this allows managers to move from one GE business to another with few transitional
problems.
"There is a push toward generalists versus specialists —
organizations are looking for people who can shift well in a situation," observes Dr.
Richard Daly, president of HUMANEX in Columbus, Ohio, an organizational development
company. "Organizations today require a person who can work well in several different
areas and even make the shift from one product to another if the market demands it."
Benchmarking the competition
The third stage of the GE leadership development program is akin to
graduate school; managers are divided into their particular area of expertise, such as
marketing, finance or human resources, and placed into classes led by industry experts. In
order to incorporate a variety of perspectives, approximately 30% of the participating
managers in each class are from outside that specific field of study.
Using participation and feedback from personnel in different fields is
one way that GE encourages managers to see the "bigger picture," enhancing their
ability to analyze business situations with an eye for cross-operational impact. To
further develop the global brains of managers, GE created its Impact Programme, a leading
benchmarking tool for a corporation that spans almost every continent.
The Impact Programme focuses on competitive aspects of manufacturing and
engineering. Managers from each of GE’s businesses travel to competing companies in
Asia, such as Toshiba and Samsung, to analyze quality, workforce management and technology
for approximately one week.
In each of these competitors, managers will interview them on a variety
of business practices and then return to Crotonville to discuss what they have learned.
After digesting the Asian experiences, managers go on to visit European manufacturers such
as Thomson and Philips to continue their evaluations.
Richard Kennedy, a Crotonville education manager who created the Impact
Programme, was able to win competitors’ cooperation by explaining how everyone would
benefit. As he told GE’s Japanese counterparts: "The people who manage your
business and factories will learn as much from our questions as we will from your answers.
Sure we compete, but I believe that in my heart of hearts there’s much room for
cooperation as there is competition. Mutual learning is the key."
The final rungs
As the process of management development reaches stage four, executives
participate in a sequence of three programs over a five-to-eight-year period. Each one
lasts approximately four weeks and is again largely focused on global competitiveness.
The first, the Manager Development course, focuses on managing a
multi-functional organization. The Business Management course is targeted for potential
general managers and teaches business and leadership skills needed to compete in a global
environment. The third and final course, Executive Development, is only for potential top
managers, and incorporates much of the content of the first two courses to provide an
understanding of upper-level management in global organizations such as GE.
The Business Management Program is like the Impact Programme with a
domestic twist. Acting as consultants to GE businesses, participating managers go in and
apply and receive feedback on business practices and strategies. Throughout the month-long
project, each manager is expected to develop a personal plan of action to develop and
apply his or her own skills to the job while simultaneously developing leadership skills
with a team-based outlook.
For two weeks, managers will take courses in areas such as strategic
marketing and organizational change, then divide into teams. Two teams are assigned to a
proposed project by one of GE’s businesses and given full access to marketing,
product and financial information.
The Business Management course requires that each team of participants
comes up with options and business plans for the projects assigned to it, and must defend
these plans of action against opposing GE teams. Each team not only has full access to GE
information to facilitate the process but is also expected to interview and anlayze
competitors as well.
GE benefits from this project in a number of ways: Not only do managers
receive extensive leadership and team-based experience at the executive level, but the
company receives consulting information that often leads to tremendous savings for the
business that proposes the project. Examples of this include a recommendation for a joint
venture partner in the construction industry and an analysis of opportunities in
artificial intelligence.
One important aspect of both the Business Management and Executive
Development programs are the overseas opportunities that are given to executives. Many
times these courses have taken place in Europe to continually develop the "global
brains" of each GE manager.
"Normally in the course of business, our people are jetted in and
out. GE therefore looks for sites where our people can live in the town, mix with the
locals, and figure out how to mail a letter and make a phone call, so it’s a real
experience on a round-the-clock basis for the participants," explains Dr. James
Baughman, a former manager of corporate management development for GE.
In the final stage of the leadership development process, Crotonville
organizes occasional officer workshops where approximately 20-30 officers and the chief
executive meet to discuss unresolved company-wide issues. This represents the pinnacle of
the management development process.
As a result of its world-class management development approach, GE has a
ready regiment of successors for every managerial position that might become available in
any of its dozen businesses. This might explain why, while others speculate on what life
might be like after Jack Welch, General Electric isn’t worried.
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