GE’s Talent Machine: The Making of a CEO - Case Study
Report of Findings and Recommendations
For: Professor Ernest Jewell
MGT 500 Human Behaviorin Organizations
Table of Contents
Human Resource Management for Growth
The Vitality Curve
GE, the world’s largest and most well know electricity producer and distributor had always excelled over its competition in many feats. Among them, was their ability to develop and sustain world quality managers and CEOs. What led GE to produce these talented and more than capable leaders was the amount of emphasis they drove in developing top notch management. Twelve CEOs since Thomas Edison as the inaugural leader of the company and many of them with major contributions to management development helped GE position itself to successfully maintain growth in both revenue and profit through most of the 20th century. Among those CEOs were Charles Coffin, Ralph Cordiner, Fred Borsch, Reg Jones, Jack Welch, and Jeff Immelt. Methods implemented by each of these capable CEOs allowed for GE’s ongoing success. Coffin, who immediately succeeded Edison as CEO in 1892, spent the next 20 years devoted to creating a meritocracy within the organization to reward employees promotions based on performance. This became the foundation which went on the make GE “a CEO factory” (in 2003, Coffin was named “The Greatest CEO of all time” by Fortune magazine). Ralph Cordiner, committed to a thorough decentralization GE into 100 department-level businesses which increased company management efficiency. In addition to this contribution, Cordiner built the first corporate university dedicated to support management education and upgrade GE’s on-the-job development process. Fred Borsch’s worked to include harnessing the decentralized management structure to implement a bold new round of diversification that allowed GE to expand into new businesses such as nuclear power, computers, and plastics. Reg Jones introduced a more formal and structured approach to strategic planning which served as an upgrade to Session C and EMS reviews. This further increased the development of managers. Among Jack Welch’s contributions, one of his most noted was the development of the “Work Out” initiative which saw over 200,000 company employees meeting for two to three days to discuss how their particular area of work could be made more effective. This initiative not only increased company efficiency but allowed for individuals to step up, voice their once reserved thoughts and take over the reins of management positions. Welch also moved EMS consultants from headquarters out into the field to help business leaders develop their talent and personally was responsible for the professional development of 600 SEB members. Jeff Immelt targeted technology skills as a key organization development requirement during session C reviews and also implemented resources reallocations by investing in businesses that were heavy in human capital (skills and expertise). These CEOs during their tenures with GE took the responsibility of management development seriously and were successful of implementing methods to do so each in their unique way.
The main reason for GE’s constant success was its talent to use sustainable human capitol as competitive advantage, combined with continues improvements in the human resource strategy, creating a culture with strive for operational excellence. GE used a variety of tools, helping them to maintain being a cutting edge organization by constantly looking out for new management talent, hiring from within the company. The following points were analyzed: Human Resource...
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