Case: Ge’s Talent Machine: The Making of a Ceo

Case: GE’s Talent machine: The making of a CEO

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1. 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 has made it “CEO factory” as Fortune Called it, and “easily the world’s best machine for churning out corporate talent” as The Economist described it?  

1. Emphasis on education
   With the determination and ambition to succeed and to push the company to a new high, CEO Cordiner was willing to invest in “almost 10% of its $424 million pre-tax earnings” (2) to established the first ever corporate university. Those classes and lessons offered at the university are ensure candidates become one of a kind and well-rounded future leader for GE.
2. Internal training

• EDC-Executive Development Course
• BMC-Business Manager Course
• MDC-Management Development Course

1. Rotation-Transfer to unknown departments
2. Corporate environment
   Decentralization of responsibility and authority for making business decisions to the managers of 100 department- level businesses, that each acted as mini-companies.
3. Evaluation

• Position Levels (PL)
• Individual Career Forecast
• Corporate Executive Manpower Staff (EMS) + EMS review

1. Recruiting mechanisms

allocation from top Universities to Midwestern engineering programs, night schools or former military officers. Because those candidates were disciplined, self-motivated and mobile.

1. GE constantly modifies and develops criteria to recruit candidates that match the company’s need both in short-term and long-term wise, such as the Session C Tool of Nine-Block Reports.
2. “You had a terrible month, I don’t care if you have an MBA from Harvard, I’m not keeping you if you have another bad month." ⇒ You cannot make the same mistake twice

Managers should learn from their mistakes in order to avoid making the same mistake again so they should pay more attention before making decisions to avoid disciplinary actions.

1. In GE, you have to be able “to do more than meet budget objectives”, but you will have to be able to look outside the box, “change the game, and expand boundaries” Exhibition (8).

1. Open dialogues are also established in the company, whereas “an annual employee surveys” (4) are conducted to get a 360 degree feedbacks that would help the manager to plot progress.

2. How generalizable are GE’s management development policies and practices? How transferable across cultures? Across industries? Across companies? [pic 2]

Policies and criteria that GE’s management had listed are quite general to apply to majority of manager levels; however, when company culture comes into play, it may only be applied to a limited extent.

• If a company is about the same size, with similar amount of employees headcount, located in close geographic locations, and goes by similar laws, we can definitely see these policies and practices being applied.
• Cultures and morals can be drastically different despite the fact that two countries may just be separated by a thin border, let alone across the ocean and in a completely different continent. Therefore, these GE’s management development policies and practices may not be transferable across cultures. A good HR department will have to take factors like value, moral, culture, customs and behaviors into consideration to come up with the ideal scoring criteria to recruit a perfect fit.
• The organization structure varies between industries. For instance, for a new starting business, the organization structure should lead towards horizontal organization whereas the small-size startup business can be more flexible and versatile to respond to the changing of the surrounding environment. On the other hand, military organization and medical organization should lead towards vertical organization whereas specialization and standard operating procedures are vital.

3. As Jeff Immelt, is it time to tune up or even overhaul GE’s 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?[pic 3]

Issue One

One of the major issues that GE faces at this moment is that employees leave the company for other opportunities due to the “disciplined performance management analysis” (5) whereas only top employees are rewarded and “the bottom 10% to improve” (5) or they’d get up leaving the company for good.

Possible Solution

Despite the fact that these employees are at the tail end, they should still feel proud of their job and gain certain amount of recognition from the company. Making employees feel recognize is just as important as expanding the company because it is very easy to lose passion once these employees feel worthless of themselves. As most of the employees were ranked in the “middle 70%”, they feel like they are not being appreciated and that their existence are disposable. As the company constantly cutting off the bottom portion of their employees would also results in the loss of employee’s loyalty to the company. Perhaps, the company shall offer other support and assistance for the bottom 10% employee to work their way up rather than setting deadline and giving threats. On the other hand, if these bottom 10% people still failed to achieve progress, they should be utilize and transfer into other department or workforce to efficiently make use of their abilities. For example, these people may devote their time to perform Corporate Social Responsibility projects that help establish a good business image for GE. Through this process, these people may regain their passion and faith towards the company because they can witness what they do have made a difference.