Training the Top at GE

General Electric’s leadership training alumni include the CEOs of 26 of the largest companies in the United States. GE does not use an ROI metric to evaluate its leadership development programs, but the market does. A Harvard Business School study of 20 GE-trained executives poached by other companies between 1989 and 2001 found that 17 produced an instant spike in the hiring company’s stock price, with an average gain of $1.1 billion across the group.

“We don’t want to lose people and we work hard to provide them with opportunities,” says Jeffrey Bucklew, the company’s manager of executive development. “Compared with other companies, we are extraordinarily open about those opportunities, and if their ambitions outstrip what we can provide, we are honest about that. When we lose big names, there is some little upside in being able to increase talent attraction and draw in the best candidates. It helps our reputation as a great place to build a career.”

Although GE’s best practices for leadership development are widely studied and emulated by other companies, the results are rarely duplicated. “The gap between GE and other companies in leadership development lies in an operating system that is wide across the organization and deeply rooted, and in the commitment of top leadership,” Bucklew says. CEO Jeffrey Immelt spends 30 percent of his time on leadership development. HR owns the global learning organization, including the entire leadership development curriculum.

GE runs with 197 corporate officers worldwide who lead the large revenue-generating businesses or critical functional groups. Most of these have spent at least 12 months in training and professional development. In 2006, GE launched its Leadership, Innovation and Growth course for senior business leaders worldwide.

Participants are selected through the annual “Session C” process, a leadership analysis that includes a specialized performance review. Human resources owns the Session C agenda, but the business leaders control and conduct the actual reviews.

“Immelt, senior vice president for HR John Lynch and vice president and head of executive development Susan Peters basically spend all of April visiting the 20 businesses in GE doing Session C, and then they do videoconference follow-ups,” Bucklew explains.

The top 197 executives move through three cornerstone courses lasting two to three weeks each and progressing through three levels. For the third course, Immelt chooses the topic. “Last year, it was the regulatory environment, so this was an action-focused course on how we can do better in working with the regulatory agencies and other related issues.” Bucklew says.

An additional course is a weeklong training program for intact leadership teams of 15 to 20 people. The course focuses on marketing, leadership, segmentation and innovation. “We use an outside speaker—usually a top expert from one of the top business schools—and an inside speaker,” Bucklew reports. “At the end of the training, the team submits a report to Immelt about what the team learned and what they plan to do to implement that learning.”

With half of its revenues and employees outside the U.S., GE is now focusing on leadership development abroad. A team from Crotonville, GE’s corporate training facility in New York, is permanently based in China to serve Asia, and another team is based in Europe.

Workforce Management, June 9, 2008, p. 23 — Subscribe Now!