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Business English: GE's bright sparks take the lead
The US multinational, famed for producing top executives, is rethinking how it trains its next generation of leaders"I was told two things about this group," the lecturer announces. "This is GE: one - don't be boring; two - don't make them touch."
A chuckle of self-recognition ripples round the 60 General Electric managers. They should be in good humour. They have just enjoyed a good lunch outdoors. The sun is shining. Down in the valley, the Hudson river is glittering. The presenter is compelling and witty. Finally, their presence at Crotonville, a 45-minute train ride north of Manhattan, for this residential course is a sign that they are in the ascendant at one of the world's largest and best-known companies.
Indeed, Crotonville (officially, the John F Welch Leadership Development Center, named after GE's high-profile former boss, though no one ever calls it that) is at the heart of what may be GE's most important production line: the one for leaders.
Only one person can be chief executive, but although the attrition rate of the top 650 managers in the company is low, at under 3 per cent annually, GE alumni crop up in executive suites across the corporate world. They include the current chief executives of ABB, Honeywell and Boeing, for instance. The chances are high that they completed a Crotonville course. Jeff Immelt, who has just passed his 10th anniversary as chief executive, was taught in "The Pit" - the main lecture theatre at the New York campus - by his predecessor Mr Welch, who himself took a one-week marketing course there in the 1960s, as a young manager.
Fifty years ago, training was founded on chairman Ralph Cord¬iner's "Blue Books" - a set of gruelling instructions about how to manage. "It was a lot about telling," says Peter Cavanaugh, operations manager at the centre. "Now it's more about reflection."
But Crotonville is no Trappist retreat, fixated on the values of a Cordiner or a Welch. To help kick off the courses, Susan Peters, GE's ebullient chief learning officer, challenges participants: "Are you using the same cell phone you used five years ago? No, because capabilities have changed and your expectations have changed - and that's the same with leadership."
GE has itself spent two years re¬thinking the physical infrastructure of the site, and what and how it teaches future leaders. More than ever, they are likely to be drawn from non-US markets, in line with the shifting emphasis of the group's operations. In the process, GE has to work out how to tap the energy and sharpen the expertise of its international workforce, while instilling a common culture and purpose.
The thoroughness of the group's re-examination of its leadership development would put many business schools to shame. In spring 2009, the group invited management thinkers - from Colonel Thomas Kolditz of the US Military Academy at West Point to Insead professor Herminia Ibarra - to dinner with GE officers, to discuss the future of leadership. That September, 35 senior GE executives fanned out around the world to gather views on how others were developing leaders. They visited about 100 organisations, including the Chinese Communist party's central school, Toyota, Embraer, and the Boston Celtics basketball team.
On the basis of what it learnt, GE reworked its "growth values" - external focus, clear thinking, imagination and courage, inclusiveness, and expertise. Mr Immelt relaunched them at a meeting of the top 650 executives in Florida last January, updating its curriculum accordingly. "Externally focused" leaders, for instance, are now trained not just to cultivate customer relationships but to analyse global trends and spot opportunities.
GE offers two broad types of training: "programmes", which mix job rotations and classes; and the more traditional one- to three-week residential leadership courses. It aims to ensure staff can apply what they learnt in the lecture theatre once they are back in the office or factory.
In line with this trend away from a physical "corporate university", GE has devolved more training to take to its research centres around the world. Of 25,000 employees who took a "Crotonville" class last year, 15,000 never visited the bucolic campus. The challenge is to ensure both that the curriculum is taught consistently - and that it remains relevant to top managers. About half of the top 5,000 are likely to be non-Americans by 2021 against 35 per cent today and 17 per cent ten years ago.
All the courses have "a Crotonville feel", whether they take place in Bangalore, Shanghai or, in due course, Rio de Janeiro, where a new GE research centre is being built. GE also tries to offset national differences that might hamper training. For example, having spotted that US managers were good at talking, but perhaps not as good at listening, GE "now majors people on listening", says Ms Peters: "It's something we have to really work on, to equal the playing field between our American leaders and our non-American leaders."
The group disputes the suggestion that it uses a "cookie-cutter" to churn out American or Americanised leaders to follow the last three chief executives, Reg Jones (who was actually born in the UK) and Messrs Welch and Immelt.
Expatriate managers for GE in markets such as India and China are supposed to look for their successors locally. The approach reflects that: local trainers adapt courses to local sensibilities, while managers in the classes are encouraged to feed in their regional perspective.
The message seems clear. Ralph Cordiner might not recognise the modern Crotonville. But just as new innovations are emerging from what used to be the periphery of GE's empire, so GE is sourcing its leadership training - and increasingly the leaders themselves - from well beyond the Hudson valley.
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The Financial Times, 29.12.2011
© 2011 The Financial Times,
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