GE: serious about leadership

In most large organizations, leadership is affirmed as a key contributor to organizational success.  Typically there is some form of leadership model, special programs for high potentials, and perhaps rotational programs to move high performing or high potential leaders through the experiences needed to lead and perform at the next level.

Leadership models come in all shapes and sizes, and most are helpful in keeping leaders (and aspiring leaders) focused and developing.  NASA offers an excellent graphical representation of leadership behaviors arranged on a disc, moving from large dimensions in the middle to more granular areas towards the outside.  The MIT Leadership Center promotes FCF (Four Capabilities Leadership Framework), which points to four critical components of leadership:  sensemaking, relating, visioning, and inventing.  Leadership powerhouse Lominger (part of Korn/Ferry International) has developed 67 leadership competencies and publishes a book called FYI:  For Your Improvement that’s now in its 5^th edition.And then there’s GE.


In the 1950s, the CEO of GE was a man named Ralph Cordiner.  He (or Virgil Day, or Charlie Wilson – I dare say all were involved) built the famed GE Crotonville complex on 52 acres in Ossining, New York.  The thinking was that for GE to be successful, it had to decentralize.  To decentralize, more managers had to understand how to run a business.  Hence, Crotonville was founded to prepare people to manage.  Delivered were fundamental management techniques, including the POIM principles (Plan-Organize-Integrate-Measure) and the famous GE Blue Books.  The Blue Books were instruction manuals for all things management:  P&L, process, technology, company hierarchy & structure, etc.Jack Welch writes in Straight From the Gut:  “By 1980, the facilities had aged.  Crotonville gradually became more a consolation prize than a place where the company’s best gathered.  The programs used open enrollment, and the quality of the attendees varied widely.  Much of the company’s future leadership wasn’t bothering to attend.  Only two of the seven contenders for Reg’s [Reginald Jones, the outgoing CEO] had taken the multiweek general management course.  I wasn’t one of them, although I remember taking a one-week marketing class in the late 1960s.  I liked the course but didn’t particularly like the accommodations.”

Starting in 1981 when he became CEO, Welch rebuilt Crotonville and the rest of GE.  He brought in Noel Tichy, now considered a thought leader in the world of leadership and organizational effectiveness.  Peter Drucker cofounded the new Crotonville, and challenged managers using the Socratic method (now called coaching) of asking company managers tough and probing questions to help them find their own answers.  Top managers and leaders from across the organization were given audience with the company’s board of directors.  In the late 1980s he introduced something called Work-Out, which was the process of taking the fat out of processes and systems in the company, leveraging the knowledge and experience of workers closest to the process or system.  We might call it lean process improvement today, and it was happening all over GE.  Welch wanted every GE business to be either #1 or #2 in its class – and Bank of America adopted the goal as a success metric several years later under Ken Lewis.

Under Jeff Immelt, the considerations of leadership continue.  Now ten years in the role, Jeff is on his second (maybe third?) iteration of the leadership model at GE.  On the company web site Immelt shares:  “We have always believed that building strong leaders is a strategic imperative.  When times are easy, leadership can be taken for granted.  When the world is turbulent, you appreciate great people.”  In the 2010 annual report letter to shareholders, he writes:  “We have modernized our leadership traits.  We have built off the foundation we have had in place for several years:  External Focus, Clear Thinking, Imagination & Courage, Inclusiveness and Expertise.  Upon this foundation we are training for attributes that will thrive in the reset world.”  The leadership model is to the right, with four simple circles, each containing a dimension of leadership:  Domain Competency, Leadership Development, Team Execution, and Global Repositioning.  In 2010 GE was voted best in developing leaders in the Hay Group/Businessweek poll.

So when you think about getting serious about leadership, think about GE.  The company has gotten so many things right – because it is serious about leadership.

Best,

Bryan