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GE Talent Machine- The Making of a CEO Submitted By: Group 2 Aleeva Goyari PGP09184 Ankush Verma PGP09185 Akhil Verma PGP09245 Jeevan Rathod PGP09186 Jagtap Sai PGP09190 Rahul Arora PGP09221 Puja Ashwini PGP09220 Sagar Rathee PGP09227 FABRIKAM

CASE BACKGROUND GE- World’s largest leading diversified business

1878: Founded by Thomas Edison

1930: Pioneer of centralised corporate control

1950: Decentralised multidivisional organisation

1970: Leader in strategic planning

1990: Model of lean and agile global competitor

• Widely known for following model of modern management practice • GE promoted top leader from it’s own organization • Introduced by Charles Coffin, the executive development practices which became the foundation of the GE’s well known culture • Observers called it GE, “a CEO factory”

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MAJOR ACTORS Ralph Cordiner, CEO 1958

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Implemented decentralisation plan and built Crotonville as a part of it Designed a new corporate system, known as Session C Created Position levels(PL) , a succession plan for managers

Fred Borch, CEO 1972

Introduced Executive Manpower Staff, which helped him manage GE’s executive as a corporate resource

Jack Welch, CEO 1981

• Concentrated on restructuring of the company • Eliminated over 100,000 jobs • Work out initiative • Annual employee surveys • New view on recruiting

Jeff Immelt, CEO 2001

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a) b) c) d) e)

Focused on 5 key elements as growth strategy: Technological leadership Services acceleration Enduring customer relationships Resource reallocation Globalisation

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Jeff Immelt, CEO 2001

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SESSION C: New Corporate System Session C discussions focused on plans for promoting “highpotential” employees, remedying “unsatisfactory” ratings, and implementing succession plans

Employees filled the a self evaluation form Managers prepared an Individual Career Forecast Each sub ordinate was rated on a scale of 6 (high potential to unsatisfactory) Main 3 outputs: • Individual evaluations • Career forecasts • Succession plans

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Executive Manpower Staff Implemented by Fred Borsch The system was implemented to help manage GE’s executive as a corporate resource EMS focused only on jobs classified as PLs(Position Levels) 13 to 27 (top 2% of GE’s employees) EMS consultants were called to participate fully in Session C reviews These consultants were to compile a central corporate inventory on management talent, then track all “highpotentials” Through this process HR professionals eventually became the third member of each business manager’s inner circle, along with the finance manager

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Welch’s Initiatives Position Levels were collapsed into 7 broader employee bands

MDC, BMC, EDC courses were recognized as preparation for next band promotion Introduced the “Work Out” initiative, around 200,000 employees met 2 or 3 days to discuss how a particular area of work could be made more efficient Managers were evaluated not only on their performance against objectives, but also on how they lived up to GE’s values Welch added a disciplined performance management analysis to Session C

Vitality Curve

Top 20%

Highly valued 70%

Least effective 10%

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PROBLEMS Turnover of GE’s most valuable employees was low In 2003, HR data analysis showed that attrition from the highly valued 70% employees had increased Should the vitality curve system be modified to differentiate within this group? Was it time to question the entire concept of performance ranking at GE?

GE did not yet have the reputation to make it the employer of choice internationally Should GE compromise the clarity and simplicity of GE’s management bands and create more levels in the organization, particularly abroad?

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RECOMMENDATIONS Focus more on the highly valued 70%, introduce new awards system for them

increase the frequency of clearly defined job promotions

Increase global recruitment

Expand the Position Level bands for other countries

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THANK YOU Group 2 SECTION D

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