Question 1: GE claims that it has been able to develop management talent as a sustainable source of competitive advantage. How has it managed to do so? Answer:
GE has been able to develop management talent as a sustainable source of competitive advantage. This is because it has always tried to recruit the higher level employees from within the organization rather than hiring them from outside sources. GE used a very through succession management process. This enabled GE to develop the talent of its management. The way they rigorously and constantly trained the next successor always provided them with an upper hand in the market. GE’s management always kept their eyes open for employees who showed a lot of potential an had the ability to be independent and decisive. Its management was a source of competitive advantage because no other organization gave its employees as much authority and variety of jobs to perform as GE. It always tried to keep its employees on their toes. This was done to keep them motivated and to keep them learning. To keep its management as a source of competitive advantage GE always groomed and tested the leading contenders. It has managed to do so by using several GE businesses as proving grounds. The appliances and lighting sector had long been used as a place to develop manager’s operations skills. Transportation System, Energy Systems, Aircraft Engines sector was used to improve the candidates’ skills to manage through capital spending cycles. And their performance at Plastics and Medical Systems could be evaluated for the candidates’ ability to exploit technological growth, acquisition and globalization. So this is how GE managed to develop its management talent as a source of competitive advantage.
Question 2: Is GE’s talent machine perfectly in balance or does the CEO needs to fine tune it? What recommendation would you give him in the 3 questions? Answer:
GE’s talent machine was perfectly in balance since it had a constant supply of talented employees. Also, its turnover of its most valuable employees was low. This shows that the employees were satisfied with their jobs even through tough times that GE experienced. It always provided its employees with job security. For this reason and many more the turnover of GE employees always remained well below the U.S. Industrial average. Since the CEO always tried to ensure that its employees not only remained loyal, but were also engaged and motivated when things turned around. As businesses always operate in a dynamic environment and as employees are always looking for better jabs in all aspects, it would be wise to develop new or fine tune its existing talent machine even though the talent machine was perfectly in balance. I would recommend that they fine tune the talent machine by developing new HR policies and practices to deal with unforeseen future.
Immelets review of some HR data showed that over the past 18 months, BankAmerica had recruited over 90 GE employees to its headquarter operations. The ones recruited were all from the pool of the highly valued 70%, and not from the top 20%. This group was regarded as the backbone of GE. But since GE had a very transparent succession management system, which showed the position of these employees to themselves they decided to leave the organization. As they thought that, they were being categorized as the just average or middle of the road employees. This ranking was based on the vitality curve which GE used for its performance management. So, the recommendation that I would like to give GER on the 3 questions is that, the vitality curve system should be modified to differentiate within this group as without modifying the vitality curve system it would not be possible to show employees their value in the organization and what they can become. This will definitely help in reducing the turnover if this highly valued 70%. The recognition...