Perspectives on Best Practice in Capability Building GE Case Study[1]

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    1

    This case study is part of a set of materials which sets

    out a firm perspective on capability building

    Perspectives on capability

    building white paper 8 deep dive case studies

    This case study has been produced as part of a knowledge effort exploringbest practice in capability building

    There are eight case studies in the series, focusing on Bertelsmann, Exxon

    Mobil, GE, IBM, P&G, Samsung, Toyota, and Wal-Mart. The case studies

    have been synthesized into an overall document Perspectives on

    Capability Building

    Our objective is to create provocative and interesting insights into a rangeof companies that are truly distinctive in building the capabilities of their

    people

    http://www.pg.com/http://www.walmart.com/http://images.google.co.uk/imgres?imgurl=www.jayso.com/mall/images/GE-LOGO.gif&imgrefurl=http://www.jayso.com/mall/images/&h=205&w=200&sz=3&tbnid=VLZMer6RwsUJ:&tbnh=99&tbnw=97&start=16&prev=/images%3Fq%3DGE%2Blogo%26hl%3Den%26lr%3D%26ie%3DUTF-8%26sa%3DG
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    2

    We have observed the following four principles shared

    by the best practice companies

    Focus

    on one or

    two capabilities

    and drive these

    to distinction

    Execute with passion and persistence

    Create a capability building culture

    Architect a program basedon adult learning principles

    Are clear about the business strategy and thecapabilities that are fundamental to deliveringthat strategy

    Focus on the one or two capabilities that arecritical to delivering the business strategy

    Drive those few capabilities to real distinction

    Take a long term view of capability building and execute with passion

    and persistence

    Create a learning culture: Put people at the center

    Leaders live and breathe appropriatebehaviours

    Capability building focus is supported

    with formal systems and processes

    Employees understand and believe in thereason to learn

    Architect a skill-building program based on howadults learn best

    Use a broad range of techniques

    Focus on learning through experience, aided by

    coaching and mentoring

    Develop both will and skill

    1

    2

    4

    3

    Best practice companies

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    GE has delivered consistent, predictable

    earnings growth

    0.0

    0.5

    1.0

    1.5

    2.0

    2.5

    3.0

    Johnson & Johnson

    USD

    General Electric

    USD

    0.0

    0.2

    0.4

    0.6

    0.8

    1.0

    1.2

    1.4

    1.6

    1.8

    2.0

    EPS91

    EPS01

    EPS02E

    EPS03E

    EPS92EPS93

    EPS94

    EPS95

    EPS96

    EPS97EPS98

    EPS99

    EPS00

    0.0

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    35.0

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    BP plc

    GBp

    0.0

    0.5

    1.0

    1.5

    2.0

    2.5

    Microsoft

    USD

    91 92 93 94 95 96 97 98 99 00 01 03

    91 92 93 94 95 96 97 98 99 00 01 03

    Sources: I/B/E/S; team analysis

    02

    91 92 93 94 95 96 97 98 99 00 01 0302

    91 92 93 94 95 96 97 98 99 00 01 0302

    02

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    Focus

    on one or

    two capabilities

    and drive these

    to distinction

    GE delivers excellence in execution through formal

    training and a rigorous initiative cycle

    Execute with passion and persistence

    Create a capability building culture

    Architect a program based

    on adult learning principles

    GE focuses on building excellentleaders with a strong focus on effectiveexecution

    Although heterogeneous, GEsbusinesses show interesting underlyingsimilaritiessteady growth with lowvolatilityenabling GE leaders tomove and be successful in differentparts of the company

    There is extensive senior leadershipsupport for and commitment tocapability building

    People evaluation system focuseson performance and values andprovides extensive feedback

    Key learning initiatives are quickly

    embedded into GEs culture andtheir heroes celebrated

    GE uses capability building to create andreinforce the glue that holds the

    conglomerate togetherexecutives attendCrotonville at key points in their careers

    GE adopts a broad range of capabilitybuilding techniques to build effectiveleadership with a focus on execution:Crotonville, extensive on the job coachingand feedback and action learninginitiatives such as Work Out

    GE spends $1bn p.a. oncapability building

    CEOs consistently teachcourses at CrotonvilleWelch missed one out of320 due to open heartsurgery

    Corporate education centerdedicated during GreatDepression

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    GEs businesses are too diverse to define core

    capabilities at a corporate level; therefore, GE

    builds leaders who can execute

    GE is so diverse that there is no single strategy that could beapplied across the firms multiple business units. When you havethe head of our appliances, capital and aircraft manufacturingbusinesses together . . . any discussion of strategy ismeaningless

    GE believes conventional

    corporate strategy is

    largely meaningless

    and organizational

    capabilities

    GE is so large, the impact of any CEO decision on day-to-dayaffairs is negligibleGE focuses on building world classleadership and execution capabilities which will win in any sector

    The result is an adaptive

    firm with no corebusiness or

    capabilities

    It acquires and divests firms and key skills and capabilities asnecessary in pursuit of value creation without sentimentalattachment to any particular industry

    which aspires to

    boundarylessness,

    where the idea isking

    GE aspires to have no horizontal boundaries (between function,industry, BU or country) and no vertical boundaries (blue vs.white-collar workers), so that all that matters is the quality of theidea, not who thought of it

    It therefore keeps thecorporate role

    focused on the

    portfolio

    After the fraud scandal at Kidder Peabody, Welch made theportfolio decision that GE would sell Kidder, and stay out ofinvestment banking. He also made the portfolio decision to enterbroadcasting with the acquisition of NBC

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    GE recruits primarily at entry level and builds

    capabilities through formal and informal training

    Sources: Execution: the Discipline of Getting Things Done; Jack: Straight from the Gut; Australian Financial Review

    Select

    Recruit

    Second tierschool winners

    4Es Edge Energy Energiza Execution

    Values

    Develop

    Formal and

    informal

    training

    On the jobexperience

    Ongoing

    commitment toformal programsfor leadershipdevelopment

    Mental and socialcontextreinforcement

    The people factory

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    Top 25% engineering students with salt

    of the earth values

    Top performers from 2

    nd

    tier schoolsSelf-described Winners

    Athletes, particularly team captains

    Those with armed forces experience

    Aggressive, go-getters

    Ambitious doer vs. thinker

    Candidates who focus on I

    accomplished vs. We

    * CEO Super Bowl, Fortune Magazine, 1999

    Source: Business press articles; Interviews; team research; team analysis

    GEs recruiting focuses on high

    achievers irrespective of education

    . . .

    . . . creating executional leaders

    who are bruisers, not

    elitists*

    Powerful blue collar winners

    Powerful sense of being

    meritocrats

    Locker room or barracks:male oriented team culture

    Its recruitment processes screen for the doers,

    winners, and salt of the earth candidates

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    10/309Sources: Team analysis; Corporate University Review, Control your Destiny(Tichy/Sherman)

    GE focuses heavily on formal training programs,

    many of which are offered at Crotonville

    Corporate Entry LeadershipConference

    Experienced ManagersDevelopment

    New Managers Development

    Impact Program

    Corporate OfficerWorkshops

    Executive Development

    Business Development

    ManagementDevelopment

    Participants Focus Delivery

    (Potential) Topexecutives resolution of challenging, openissues - 20-30 officers- irregular schedule-open work-out style discussion

    Potential Topseniorexecutives

    managing the multifunctional firmbusiness and leadership under

    global competition

    - 4 week programs- strong action orientation- significant, real-life issues

    PotentialGeneralManagers

    Business and leadership in aglobal competitive environment

    - on-site education/discussions- off-site business projects

    Senior

    executives

    management in a multifunctional

    company

    - tangible end-products/decisions

    - strong global outlookSenior middlemanagers

    functional expert executive skillsbenchmarking project

    - mixed on-/off-site- formal training/discussions- industry experts as faculty- competitor benchmarking visits- mixed functional teams

    Experiencedjuniorexecutives

    initiating and facilitating change - on-site courses- regional differentiation- mainly peer discussions

    Fast-track

    juniorexecutives(prmotionwithin 1 yearof hiring)

    leadership concepts

    creating high-performacne teamsGE business in a regional context

    - on-site courses

    - regional differentiation- strong focus on open discussion

    2000 entry-level juniorexecutives

    GEs global strategyvalues of the companymarkets, compatitors

    - 3-day on-site; groups of 100- presentations from businesses-evening work-out debate with CEO

    4

    3

    2

    1

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    11/3010Source: Team analysis

    On arrival, all GE executives attend the

    Corporate Entry Level Leadership Conference

    Goals

    Orientation ofjunior, entry-levelexecutives

    GE globalbusinesses,strategies,competitors

    Espousedvalues of thecorporation

    Initial networkingwith senior

    executives in ownbusiness area

    Participants

    Entry-level juniorexecutives fromall parts of GEbusiness (approx.2000 p.a.)

    Individual groupsof approx. 100participants perconferencesession

    Program design

    3-day, intense presentation/discussion workshop atCrotonville

    Pre-arrival assignment tointerview 4 senior executiveson GE values

    Presentation of business andtheir competitive challengesfrom executives of GEbusinesses

    Full-day work-out onespoused GE values and

    encountered challengesIdentification of critical

    issues in break-out groups

    Open Pit discussion with

    chief officer of corporation

    End-products

    Comprehensiveorientation withincorporation basedon personalimpression andfirst-hand contacts

    Reflection onGEs espoused

    values

    Demonstrationthat corporateexecutives walk

    the talk

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    12/3011Source: Team analysis

    GEs Experienced Manager course combines

    action learning with cultural immersion in the

    global market place

    Goals

    Team-baseddevelopment ofbusinessrecommendationon real business

    issue Appreciation ofculturaldifferences acrossthe globalmarketplace

    Reframing of

    managementunderstanding in aglobal context

    Participants

    Approximately 35middle managersfrom various GEbusinesses

    Business-centered

    teams of 5 parti-cipants, selected bygeneral manager ofbusiness

    Assigned businessissues professio-nally relevant to

    each team member

    Program design

    5 day off-site, set inrelevant geographiccontext (e.g., Gotemba,Japan, Asian business)

    Mix of lecture-style,

    expert presentation, andteam-based problem-solving

    Team-building exercisesto consolidatecommunity construction

    Formal final

    presentation of workresults by team to seniormanagement ofbusiness

    End-products

    Concreterecommendationand work-plan toresolve businessproblem posed to

    team On- the-spotdecision by seniormanagement ofrespectivebusinesses

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    13/3012Source: Team analysis

    GEs Business Development Program couples

    team-based action learning with cultural

    immersion to resolve real business issues

    Goals

    Developingbusiness andleadership skills ina globalcompetitivecontext

    Dealingproductively withdiversity inmanagementteams

    Building cohesionamong seniorexecutivemanagement

    Participants

    Approximately 35potential generalmanagers fromGE worldwide

    Explicit focus ondiversity ofbackgrounds(gender, race,business)

    Grouping indiverse teams of

    approx.5-8 participants

    Program design

    Intense 4-week team-basedlearning; based on self-directed problem-solving

    Mix of plenary presentations

    and discussions with team-based cultural immersion

    Development of actionrecommendation on high-impact, hot issue for GE

    (e.g., global expansion intoIndia)

    Parcelling of hot issue intoindividual business topics foreach team (e.g., LEXANmarket in India)

    Plenary presentation andintense discussion with CEO

    End-products

    Strengthening ofleadership meta-community amongparticipantexecutives

    Detailed actionrecommendations onteam businessissues

    Frequent on-the-spotdecision on how to

    proceed on hotissue

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    13

    GE uses its initiative cycle to embed new

    capabilities on the job and to stretch individuals

    Inputs

    Appoint top performers

    At GE, being chosen totake part in an initiative isthe sign of a high-flyer.Welch, personally, picksthe head of the program,and if the initiativessucceeds, they will bepromoted

    Input CEO and Board time The CEC (CorporateExecutive Committee)meets 4 times a year. Itsmembers are tied into theinitiative and support itsrollout within theirbusiness units

    Process

    Evaluate executives on

    success in rolling out

    program

    All GE executives areevaluated on on a 2x2matrix (performance,values)

    Tight project management

    All GE initiatives follow thesame rigorous projectmanagement process

    Outputs

    Continual renewal of

    ongoing initiatives

    GEs initiatives arereviewed constantly. Asthey succeed inpercolating their ideasthrough the firm, they aregiven new, more-advanced objectives

    Development of new

    initiatives

    GEs initiatives usuallyoriginate from the same

    problem coming up again-and-again in work-outsessions (Tichy)

    Enthusiastic can do culture

    Source: ControlyourDestiny(Tichy)

    GEs social architecture is designed to accept the imposition of new ideas. Welch believes it took him five

    years to prepare GE for the first initiative Work Out this process cannot be replicated in other companiesbecause their social architecture is not sophisticated enough to be able to accept and welcome the level ofchange needed for a successful initiative

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    14

    Initiatives are embedded and slowly take their

    place on the values card

    Sources: GE web site; team analysis

    E-Business

    Six Sigma quality

    Making customers winners

    Key strategic initiatives

    Change acceleration process

    Process improvement

    Productivity/best practices

    Work-OutTM/Town meetings

    before they put it on the values card

    Respecting always the three traditions of GE. Unyieldingintegrity committed to Performance and Thirst for Change

    Passion for Our Customers: Measuring our success bythat of our customers always driven by Six Sigmaquality a spirit of innovation

    Meritocracy: Creating opportunities for the best peoplefrom around the worldto grow and live their dreams

    Growth Driven, Globally Oriented: Growing our people,markets and businesses around the world

    Every Person, Every Idea Counts: Respecting theindividual and valuing contributions of each employee

    Playing Offence: Using the advantages of size to takerisks and try new things never allowing size to be a

    disadvantage Embracing Speed and Excellence: Using the benefits of

    a digital age to accelerate our success and build a faster

    and smarter GE Living the Hallmarksof GE Leadership:

    Passionfor learning and sharing ideasCommitted to delivering resultsin every environmentAbility to energize and inspireglobal, diverse teamsConnected to workplace, customers and communities . .. in touch with the world

    GE Values, 2002GE Initiatives*: 19822001

    GE changes behavior through initiatives

    Time

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    15Sources: Interviews, Business Week;Jack: Straight from the Gut; Financial Times; team analysis

    We

    celebrateheroes

    GEs celebration of heroes has little to do with economics, but a lot to dowith the company feel; it forms an influential part of the organizationssocial and mental contexts

    Welch, 2002

    The annual Boca top 500 executive event is an opportunity for Welch toset the years agenda and toast the companys newest heroes. An

    invitation . . . is like winning an Olympic medalBusiness Week, 1995

    but you

    must

    adhere

    to our

    values

    One officer was removed because he wasnt a believer in Work-Out or

    idea sharinghe didnt get what boundaryless meant. Another couldnt

    build a strong team, while a third officer wouldnt empower the team he had,

    and the fourth never got the idea of globalization

    Welch, 2002

    GE celebrates heroes but within the boundaries

    of its values

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    16

    GEs formal evaluation mechanism forces

    differentiation and ensures real consequences for

    performance

    Losing As is a sin. Love

    em, buy em, kiss em, dont

    lose them! We conductpost-mortems on every A weloseWe lose less than 1% of our

    As per year

    B players should get solid increasesrecognising their contributions everyyear; 60%-70% get options contributionalthough not at every grant

    Bottom 10% terminated every year Leaders who cannot identify the

    bottom 10% are terminated also GE imposed a ruthlessly Darwinist

    ethic not just on one corporation, butby its example, throughout the U.S.economy

    HBR The first time new managers name

    their weakest players, they do itreadily. The second year, its more

    difficult, the third year, its war

    Jack Welch

    Sources: Interviews; Jack: Straight from the Gut; team analysis

    Passion separates

    the As from the

    Bs

    The Bs are the heart

    of the companyand are critical to

    its success

    The C player

    cant get

    the job

    done

    ____

    ____ ____

    ____ ____

    ____ ____

    ____ ____

    ____

    ____ ____ ____

    ____ ____

    Top 20 The Vital 70 Bottom 10

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    17

    Crotonville is used to reward high performers

    Note: Crotonville is GEs elite training school. Those selected to go will, thereafter, have their careers specially monitored by GEs HRDepartment, who will make a deliberate attempt to give them as a wide a breadth of experience as possible by placing them in differentbusiness units and countries to ensure they have a global career

    Review process

    All employees in a team are

    ranked against one

    another

    Current performance isjudged on whether theyre

    making the numbers Long-term potential is

    driven by intrinsic andadherence to values (the 4Es: Edge, Execution,Energy and the ability toEnergiza)Are they GE

    people?High

    Middle 70%

    Top 20%

    MediumLow

    Bottom 10%

    Long-term potential

    Currentpe

    rformance

    Equity OptionsEquityOptions

    Crotonville*

    Promote,Equity Option,Crotonville*

    Inform, nofurther

    promotionpossible

    Encourage,

    Crotonville*

    Out OutOut, unlessmitigating

    circumstances

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    Individuals are encouraged to balance dreams

    with clarity about current realties

    Basic targets

    facing reality

    Stretch targets

    reflect their

    dreams

    Making your numbers means being accountable formeeting basic targets

    The corporate center tests and challenges the basictargets by forcing the business to face the reality ofthe business

    Basic targets are established top-down, based on prioryear performance and the competitive environment

    The emphasis on stretch targets doesnt replacetraditional forecasting and objective setting

    The stretch targets are a statement of your aspirationsfor the business and are established bottom-up

    You develop your operating plan to meet the stretchgoal, not the basic target

    Those who achieve stretch targets are rewarded withsubstantial bonuses or stock options

    Missing your stretch targets is not, in general,punished at GE. However, lower level managersoccasionally take a stretch number and call it a

    budget, thus making it punishable

    Named after Admiral JamesStockdale who survived seven

    years in Vietnamese PoW camp

    Survival depended on absolutefaith that you will prevail in theend, coupled with the disciplineto confront the brutal facts ofyour current reality

    Pure optimists or pessimiststended not to survive

    GEs dual targets reflect a

    worldview known as the

    Stockdale Paradox:

    Sources: Jack: Straight from the Gut; In Love and War; interviews; Business Week; team analysis

    http://images.google.co.uk/imgres?imgurl=www.jayso.com/mall/images/GE-LOGO.gif&imgrefurl=http://www.jayso.com/mall/images/&h=205&w=200&sz=3&tbnid=VLZMer6RwsUJ:&tbnh=99&tbnw=97&start=16&prev=/images%3Fq%3DGE%2Blogo%26hl%3Den%26lr%3D%26ie%3DUTF-8%26sa%3DGhttp://images.google.co.uk/imgres?imgurl=www.jayso.com/mall/images/GE-LOGO.gif&imgrefurl=http://www.jayso.com/mall/images/&h=205&w=200&sz=3&tbnid=VLZMer6RwsUJ:&tbnh=99&tbnw=97&start=16&prev=/images%3Fq%3DGE%2Blogo%26hl%3Den%26lr%3D%26ie%3DUTF-8%26sa%3DG
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    GE is passionate and persistent about

    capability building

    A healthy persistence

    GE spends $1bn a yearon education (2003)

    Bob Corcoran, GEs chieflearning officer says, We

    do not set hard numberson training dollars orhours per employee peryear. It is a fluid functionof our key initiatives.There is no formal cost-benefit measurement onleadership development.

    It is such a strong beliefthat question nevercomes up

    A billion dollar passion

    Jack Welch personallytaught Crotonville

    He attended 329 of the330 programs during his

    tenure, missing onewhen he had open heartsurgery the same day

    Extreme persistence

    Source: Internet search; team analysis

    GLOBAL MINDSETS & CAPABILITIES TEAM PARTNERS

    http://images.google.co.uk/imgres?imgurl=www.jayso.com/mall/images/GE-LOGO.gif&imgrefurl=http://www.jayso.com/mall/images/&h=205&w=200&sz=3&tbnid=VLZMer6RwsUJ:&tbnh=99&tbnw=97&start=16&prev=/images%3Fq%3DGE%2Blogo%26hl%3Den%26lr%3D%26ie%3DUTF-8%26sa%3DG
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    GLOBAL MINDSETS & CAPABILITIES TEAM: PARTNERSEU Americas Asia Pacific

    FelixBruck(CLE

    )

    Richard

    Elder(DCO)

    PoonehBaghai(TOR)

    JonathanDavidson(TOR)

    MichaelRennie(N

    StephenRedwood(NYO)

    BruceSimpson(TOR)

    WarrenStrickland(DAL)

    NancyK

    illifer(DCO)

    Scott

    Keller(CHI)

    ZaferAchi

    (MON)

    MarcelKess

    ler(MON)

    GassanAl-Kibsi

    (DUB)

    MatthiasBeck(MUN)

    KeithL

    eslie(LON)

    MaryMe

    aney(LON)

    Jens MuellerOerlinghausen

    (BER)

    PeterSlagt(ANT)

    RuiDiniz(LIS)

    AndreaMignanelli(MIL)

    RalphHeck

    (DUS)

    MichaelJung(MUN)

    EmilyLawson(LON)

    KathleenMcLa

    ughlin(TOR)

    Tony

    Goland(DCO

    )

    DavidFine(JOH)

    GautamKumra(DEL)

    Per Lagerstrom

    (JOH)

    JudyM

    alan(JOH)

    GiovanniViani

    (MIL)

    GonzaloLarra

    guibel(SAN)

    Cyril

    Grislain(RJO)

    DavidLevy(SYD)Sam

    Nickless(SYD)

    Tom

    Saar(SYD)

    MarkLoch

    (JOH)

    RameshSrinivasan(MUM)

    GLOBAL MINDSETS & CAPABILITIES TEAM CORE TEAM

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    GLOBAL MINDSETS & CAPABILITIES TEAM: CORE TEAM

    EU Americas Asia Pacific

    StephenAshford(AP/CLE)

    FrederickCharette(AP/MON)

    MalloryCaldwell(AP/HOU)

    AaronDe Smet(Spec/NYO)

    BrettGrehan(AP/ATL)

    JohanneLavoie(Exp/MON)

    GerardMcDonald

    (TOR)

    JeffPentland(EM/TOR)

    RodgersPalmer

    (Exp/DCO)

    Scott C.Rutherford(Exp/TOR)

    Ravi

    Rao(EM/CLE)

    BillSchaninger(AP/NJE)

    KristinaWollschlaeger(Exp/NYO)

    SheriWeinstein(Spec/CHI)

    WilliamWolf

    (AP/DCO)

    KateBanyard(Spec/LON)

    AliceBreeden(ASC/LON)

    GiovanniGiuliani(EM/MIL)

    LizMohr(LON)

    SandraHarbert(Spec/DUS)

    MartinNel(EM/PAR)

    Renate

    Osterchrist(Exp/MUN)

    Wolfhart

    Pentz(Spec/BER)

    Jason

    Rabinowitz(Exp/LON)

    Mikael

    Robertson(AP/STO)

    IanSimingto

    n(AP/DU

    PrashantVaze(EM/B

    RU)

    OliverTriebel

    (Exp/BER)

    Julie

    Shearn(Exp/LON)

    Maria-Eugenia Arias(Exp/SYD)

    RufusBlack(AP/SYD)

    GauravBhatnagar(AP/JOH)

    RebeccaCraske(EM/SYD)

    PaddyCoyne

    (Exp/SIN)

    MattGuthridge

    (Exp/LON)

    KarenMuller(Exp/SYD)

    Rob

    Mallick(SYD)

    SueODe

    a(Exp/SYD)

    MarcVanOlst

    (Asc/JOH)

    NoahMaltz(JOH)

    DougDollenberg(EM/DCO)

    BorisLeite(EM/RJO)

    Ana KarinaDias(Asc/RJO)

    MiguelSoto(Exp/C

    MontseMora(EM/MAD)

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    APPENDIX

    GE works hard at retaining one culture

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    GE works hard at retaining one culture

    Sources: HBR: Jack; HBR: Making the Deal Real: How GE Capital Integrates Acquisitions; interviews; team analysis

    GEs one-culture organization . . . . . . is central to all of its processes, e.g., pre-acquisition

    Pre-acquisit

    ion

    Foundatio

    n

    buildi

    ng

    Rapidintegr

    ation

    Assimi-

    lation

    The first two due diligence processes address cultural fit Begin cultural assessment Identify business/cultural barriers to integration success

    If it is deemed that the potential acquisitions culture will notfit with GEs then the deal is dropped, e.g., Culture is the

    reason we passed up a couple of high-tech acquisitions inthe late 1990s

    Jack Welch

    An organization that truly believes in maximising

    intellect cant have multiple culturesJack Welch

    In our shop, theres only one currency: GE stock

    and GE valuesJack Welch

    The culture is top down; its communicated

    regularly and visibly; its rewarding andpunishing . . . Even at NBC its the same

    culture as the restFormer GE employee

    GEs cultural integration process

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    GEs cultural integration process

    Pre-acquisition Foundation building Rapid integration Assimilation

    Sources: HBR; team analysis

    The integration manager actsas a cultural go-between forGE management and themanagement of the acquiredcompany

    A structured 3 day culturalworkout session is held

    between GE and the newlyacquired management team Management are

    encouraged to talk aboutthe history, folklore andheroes of their company

    Cultural differences andsimilarities are discussed

    The growing focusbecomes on the future,not the past

    Short-term projects that focuson achieving results quickly

    and include staff membersfrom both GE and theacquired company serve tobridge gaps between cultures

    Feedback is openlyencouraged and allows stafffrom the acquired company tobe heard

    Common GE tools, practices,processes and languages aredeveloped

    The Corporate EducationCenter and Crotonville are opento new staff and management

    High potential leaders inorganizations newly acquiredfrom outside the US are placedon a program called Capital

    University Given 612 month

    assignments in a GEbusiness or head officefunction in the U.S.

    Coached (along with theirfamilies) by consultants aboutdifferences in national culture

    BACKUP

    Individuals are evaluated using a strong

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    ?

    Individuals are evaluated using a strong

    values filter

    Performance

    Values Second

    chance

    Superstars

    Failures

    We agonize

    over thesepeople

    Jack Welch

    Initially. . . (1991)

    Performance

    Values

    Now. . . (2002)

    Look around

    you, thereare fivelessofficershere thanlast year.One didnt

    make theirnumbers,the otherfour didnt

    live thevalues

    Jack Welch at

    Boca, 1991

    Values are rigorous evaluated at 6-month reviews by your managerValuesare more real at GE than anywhere else

    Management consultant, former GE

    GE uses 360 feedback from peers, subordinates, managers, and customersto uncover reality and to find out those that smile up and kick down

    Session C reviews cover the top 1,000 people over a 4-week period eachspring

    The numbers

    no longerprotectyou

    GE HR,

    2002

    Secondchance

    Superstars

    Failures

    Sources: Interviews; HBR; team analysis

    Values play out differently in each GE business

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    Values play out differently in each GE business

    Sources: Interviews

    Relative

    importance

    How it is

    interpreted

    Edge is personaltoughnesstheability to cope withdifficult, stressfulsituations

    Relative

    importance

    How it is

    interpreted

    Edge is the ability tomake harddecisions

    Edge

    Energy

    Energize

    Execute

    GE Capital GE Lighting

    Energy is the ability

    to work hard,always puttingGE beforeyourself

    Energy is the drive and

    aspiration to createnew products andfind new processesto improve GE

    Energize is the ability todrive a top-performing team to

    higher levels and toenergize clients

    Energize is the ability tobuild enthusiasm fornew projects andproducts

    Execute is the abilityto make the deal

    Execute is the abilityto constantlyimproveprocesses

    Formal development programs at GE

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    Entry-level and masters degree-level leadership developmentprograms combine rotational assignment and formalclassroom studies

    HR Risk management Finance Edison engineering Communications Information management Operations management

    Senior professional

    ExecDevel

    Course

    BusinessManagement

    Course

    Manager DevelopmentCourse

    Advanced Manager Course

    New Manager Development Course

    Leadership Essentials

    Senior executive Key contributor to mission

    Lead major business/corporate component

    Translates single goalsand objectives intospecific programs

    Organizing/leadingmanaging teams

    Reinforcing cultured/team building

    Lead professional Direct projects/provide guidance

    Associate professional Contributory team mentor

    GE career bands

    After the first two years, GE uses a commonset of courses for leadershipdevelopment

    Formal development programs at GE

    Coordination of othersProfessional

    Executive

    BACKUP

    GE executive development: Team experience

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    GE executive development: Team experience

    manager courseBACKUP

    Content

    Setting Off-site relevant to the content issues

    (e.g., Gotemba, Japan; Asian strategies) 5 member team from business units; project assignments

    prior to arrival working time for teams after each days course curriculum

    Program Faculty

    GE Head of organizationalplanning

    Business School Professor Outward-Bound

    Business School Professor Internal facilitation

    Internal facilitation

    Program Faculty BU executives

    TransformationalLeadership

    Transformation of GE

    Concepts of global strategy Team-building

    Concepts of globalmarketing Visioning

    Project work Preparation of presentation

    Formal presentation Plenary discussion/decision

    Presentation of concepts and analysis tools Application of concepts/tools to individual business units Transformation Leadership and changes at GE; CEO

    perspective

    Lecture on global strategy concepts/analysis tools Outside team-building exercises

    Lecture on global marketing concepts/analysis tools Analysis and synthesis of elements of powerful vision Draft and group discussions of visions for team assignments

    Development of work-plan for implementing vision Dry run of presentation to GE senior executives

    Presentation to senior executives of individual business units Discussion of team recommendations On-the-spot decisions by senior executives on proposals and

    next steps

    Format/Didactic principles Faculty

    Day 1

    Day 2

    Day 3

    Day 4

    Day 5

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    The People Factory

    Perspectives on best practice in capability buildingCase study 3 of 8

    April 2005

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