Ge’s Talent Machine: the Making of a CEO

General Electric (GE) is a true global company with attendance in more than 100 countries. Clearly, with a workforce of more than 320’000 employees, GE also has to have proper human resources processes established. Its energetic Business Operation Model and sophisticated and evolved human resources strategy are results of the steady growth over more than 130 years of corporate history. Since its incorporation in 1878, many CEOs have shaped the company’s products, people and processes, few very intensive and a bit less (GE, 2011).

GE has been able to create a surplus while most companies have difficulty producing sufficient quality candidates for top management succession. Producing sufficient quality top management is very difficult for most companies, GE was producing managers not only for own, but enough quantity to meet the need of industry. The philosophy that GE had adopted included some techniques, policies, and practices which allow GE to fill vacant top positions. These techniques were continuous improvement, focus strategy, emerging culture, company strategy, and meritocracy (Bartlett, 2003).

As for continuous improvement, management development process of GE was very successful in which employees are developed step by step. As a focus strategy and to fill vacant top positions, GE was focusing on internal foundation. For company strategy, the company was trying not only to gain objectives but also to unite the new employees with the existing culture followed at GE. And lastly for meritocracy, GE employee’s performance was measured by quantitative and qualitatively and the basis of this evaluation, the employees were promoted. GE’s policies and practices were so good that it was producing the surplus managers.

Values, culture, training programs, and performance assessment measures are factors that help GE in revealing and polishing the talent of every employee (Bartlett, 2003). Overall policies and practices are very good and fulfill the requirement and need of management development. These policies and practices were generalized in every where in the world up to some extent. Their extent depends upon the circumstances, situations, and environment of the geographical areas, laws, and regulations of state because these factors vary from culture (Bartlett, 2003).

These policies and practices are implemented in European culture but it is very difficult to implement these policies in the Asian culture due to HR policies have to deal with human behavior and culture. Human behaviors are different in each country in same situations. For transferring these policies it is necessary to change and create the circumstances and situations according to that of GE. HR departments have to deal with factors like value, culture, and behavior and these things are different from each culture to culture, company to company (Bartlett, 2003).

GE believes its ability to develop management talent is a core competency that represents a source of sustainable competitive advantage. Traces the development of a 25-year-old MBA named Jeff Immelt, who 18 years later is named as CEO of GE, arguably the biggest and most complex corporate leadership job in the world, and how he frames and implements his priorities for GE. Immelt’s own developments and the strategic changes Immelt adopts in his first year as CEO, when he pulls hard on the sophisticated human resource levers his predecessors left him.

Immelt questions whether the changes in place will foster the development of the next generation of GE growth leaders. Jeffrey Immelt was identified as a “young hot-shot” in one of these programs, and eventually rose up the ranks to become the present Chief Executive Officer (Bartlett, 2003). Under Mr. Immelt (beginning in 2001), GE shifted its business model to a more technological focus, identifying certain growth sectors such as health care IT, water technology (among others) for managers to focus on generating revenues.

In addition, they emphasized greater “customer focus” in their businesses and looked towards growing internationally as well. In this stage, HR decided to include more engineers in the SEB program, and encouraged more transfer of talent into sales/marketing positions in order to emphasize their desire to establish long-term customer relations. The talent machine had to change to be in line with the changing business environment (Bartlett, 2003). Immelt has the opposite managerial approach when compared to Welch even though some similarities are found in both leaders. They both encourage anagers to follow programs that are aimed at improving management skills and get them involved with the company vision and goals. Immelt also requires a two way communication between employees and supervisors, but he prefers a quite exchange of opinion rather than a more confrontational approach that Welch was approving. Both Immelt and Welch knew or know all employees in depth. But it seems that Welch, even though he was very tough and feared, was loved at all levels and employees felt to be part of a big family. Immelt on the other hand, is considered to be more people oriented and friendly (Bartlett, 2003).

The organization under Immelt is growing a strong customer oriented culture rather than a product oriented culture that Welch created. New ideas are brought in by hiring managers from the outside business world and diversity within the employees is seen more favorably by the management. GE employees are now encouraged to come up with new ideas through “idea jams” meeting sessions, a type of group brainstorming. The best ideas are also awarded with the Excellerator Award (GE, 2011). The word GE evokes the thoughts of people focus, performance oriented growth, leadership and talent development, retention and maximum talent utilization.

GE’s HR strategy is completely aligned with the business goals of the organization (Pinto, 2011). This strategic framework of double sided benefit (Employee and Employer) based on the talent or growth potential can be called as a Talent Machine. Given by the fact that the CEO and senior leaders spends valuable time helping devise the HR strategic goals division by division at the beginning of every year. Visions are communicated and shared throughout the business process (Bartlett, 2003). GE spends a huge sum of around 1 billion dollars every year for the employee development.

The growth potential of the employees especially the leadership potential is tracked closely and is rewarded appropriately (Business Week, 2005). The performance review at GE is highly effective and evolved. It has a long-term direction and constructive criticism and an in built succession planning. The most important HR strategic policy is that more than 90% of the leadership positions are filled from within the organization (Hitt, 2007). Therefore, success in GE needs not just performance, but also a true present of GE culture and values.

On the whole, GE’s maturity in the area of HR is clear when one looks into the sophisticated performance management process and tools and how the organization benefits itself and at the same time promises a good return to the employee (Bartlett, 2003). The quality of employees and their development through training and education are key factors in determining long-term profitability of any business. If you hire and keep good employees, it is a good strategy to invest in the development of their skills, so they can increase their productivity.

Employees often develop a greater sense of self-worth, dignity and well-being as they become more valuable to the firm and to society. Generally they will receive a greater share of the material gains that result from their increased productivity. These factors give them a sense of satisfaction through the achievement of personal and company goals (Zero, 2011). Your business should have a clearly defined strategy and set of objectives that direct and drive all the decisions made especially for training decisions. Firms that plan their training process are more successful than those that do not.

Most business owners want to succeed, but do not engage in training design that promise to improve their chances of success (Zero, 2011). GE believes its ability to develop management talent is a core competency that represents a source of sustainable competitive advantage. This case traces the development of GE’s rich system of human resource policies and practices fewer than five CEOs in the post-war era, showing how the development of talent is embedded into the company’s ongoing management responsibilities (Bartlett, 2003).