GE case:

1. Why do so many conglomerates fail? What is GE doing that allows it to add

value? ( Tu Anh)

Ngoc: Weak company performance, low ranking in industry

Linh: Not enough human capital when expands
Note: Create HR conflicts in company culture
Many conglomerates fail because of poor leadership, not focus on talent development,
give less ownership to employees,

GE:
Build Meritocracy culture: people is core competency
human capital as a competitive advantage, this combined with continuous
improvements in the training and development of staff

Retaining best people by helping talents grow: ( give the opportunities and career
development plan )

- Decentralization: give chance for managers to show their ability

- But also require ownership, engagement and skills from managers→ Investing in
Employee Training and Evaluation:
+ To meet the huge management development task, Cordiner built the first
corporate university, Crotonville, to support management education
+ Introduced an on-job development process- Session C discusion
( career interests & development needs) which generated evaluations,
career forecasts and succession plans for the managers at GE.

2. If GE claims it has been able to develop management talent as a sustainable

source of competitive advantage, how has it managed to do so? ( Mr. Kun)

+ Recruitment
Hire disciplined, self-motivated and mobile candidates from Midwestern engineering
programs, night schools, MBA rebounds, former millitary officers.
Recruitment programs to build future leaders :Entry level leadership program( both bachelor
and master level)
+ Training
A new recruit program, investing more in training, building corporate university,
+ Development
 - Have disciplined organizational development such as session C that linked to strategic
priorities and managers held accountable.
- Create Intensive personal development like EMS reviews that includes Open dialogue
to know about aspiration or expectation dialogue; Honest feedback and Transparent
plans.
- Have powerful informal processes including identifying and following talent and
personal mentoring.
+ Tracking, build Corporate Talent Inventory and Deployment processes: Session C
transparency, Norm of giving up the best (GE owns, businesses rent). And Informal
Tracking network: entry-level leadership program
+ Evaluation/Reward
- Clear standards, objectives and metrics such as metrics change with priorities, "nine
block" summary about performance and value + capability and promotability.
- Use leveraged recognition and rewards like Executive development course, the annual
goal-setting meeting for GE's top 600 leaders in Boca Raton.
- Remove bottom performers by using Vitality curve (20/70/10)

R
3. Is GE’s talent machine perfectly in balance or does Immelt need to fine-tune it?
What recommendations would you give him on the three questions he is
contemplating at the end of the case? ( Ms.Ngoc)

Immelt realized that GE’s talent machine needed to be fine-tuned in some parts. He
wanted the employees to engage and be motivated when situations turned around while
also remained loyal to the company.

My recommendation to his concerns:

- Vitality Curve:

+ Consider providing some additional trainings/coaching/engagement activities for the

70% group (they are the “backbone of GE”), especially regarding skillsets and
leadership - not only for top 20%,.

+ 10% need to be re-defined with suitable function

+ All good work results (even big or small) needed to be recognized, give them
opportunity and have system to expose those employees to management board.

+ Have mentor – mentee program, understand employees’ expectation and have clear
career talk to motivate them. 2018, GE has abandoned this method. (Force Distribution
Evaluation – in this case, 20-70-10, top 20 to promote in the next level, 70 receive
bonuses, 10 fired).
- Recruitment:

+ Spread current Commercial Leadership program to Universities with international

MBA students, open for foreigner candidates.

+ Develop a Recruitment Program that features leadership training, probation period to

supervise/lead a team and a good compensation package and rotational opportunity
around functions.

+ Do labour supply market research: GE is well-known in US, but less popular in the
ASIA/EU market => should consider some marketing methods to increase their image
and attractiveness to the talent pool in EU

- Executive Bands:

+ Expand the different levels in the organization again with multiple skillset requirement
levels. The more levels in the organization, the more opportunities that Immelt could
give to qualified candidates (especially non-US) to become managers. Also, he could
consider providing employees with psychological rewards that are more cultural-related.

+ Explore Exchange-manager program: give GE’s leaders chance to learn and know
how others doing in various countries, and apply good practices to their role

Note: Set clear requirements for each (ex set KPI)

Restructure position/ department -> more opportunities for employees to develop

4. What is it about GE’s system that has made it effective? How much of it is
transferable? roleccessful people development system? ( Mr. Linh + Ms.Linh Vu)

4.1 What is it about GE’s system that has made it effective?

Cordiner: 1956

- 1956: Use 10% of earning before tax to invest to its university Corotonville
- Corporate system “Session C”:
+ Employee full fill employee evaluation, and then have face to face with
their boss to agree on career development plan
+ Manager prepare Individual Career Forecast, rating subordinates from
high potential to unsatisfactory
+ Design Organization & Staffing Plan: 3 replacement for his own position
and subordinates
- Design an objective performance evaluation with 29 Position Level (PLs)
Frech Borsch (1963)

At this time, GE expand business to Nuclear Power, Computer, Plastic

- He create Executive Manpower Staff (EMS) report directly to CEO, focus on Pls
13-27 (2% of GE total employees)
- Ask EMS consultant to participate fully in C-Session review
=> HR become 3rd member of business manager’s inner circle, belong finance
manager

Reg Jones (1972)

- He introduced 1 more system: 43 strategic business units (SBUs), which is more
formal and perfunctory than EMS and Session C
- Add another organization level: Sector

Jack Welch (1981)

- Restructure to be #1 or 2, or be closed or sold
- He restructures the PLs of Cordiner => 7 broader employee bands
- Create a process to make work better in every department called ‘Work out”
- Implement annual survey
- 1980s not get many MBAs because turnover is high
- He start new evaluation: Not only performance, but that managers live up GE’s
value or not

Jeff Immelt (join GE in 1982, become CEO from 2001)

- Focus on technology skills of Session C, develop engineering talents

- Open new channel of communication
- Transfer manager to marketing and sales to develop customer relationship skills
of C Session
- Develop key persons to implement his strategic globalization goals
- Allocation resources into human capital (skill and expertise) rather than physical
capital (plant, equipment)

- Vitality curve: Many backbone senior managers quit company with high ranking
70% in EMS, should question again the performance ranking of GE?
- Recruitment: Should attract more MBA? Should attract more international?
- Executive bands: International managers feel not many chance to be promoted
=> should open more levels abroad?
=> other way to reply to employee who needs recognition and reward?
Conclusion:
- System is developing over period depending on goals of GEs on every CEOs
generation
- They use HR tool like EMS, PLs, SUBs, (linked to text book it would be
considered as Strategy Map, HR Score-Card, Digital Dashboard)
- System is measurable, first measurable on the result and in the later CEOs
measurable on value of GE
- System frequently adjust based on feedback of staff
- This system help to build a long-term career development plan for their employee
especially High Potential staff, throughout many year they have a source of
internal C-level managers, who continuously develop what have been done in
previous generations

4.2 How much of it is transferable

Tú Anh input: Decentralization strategy: transfer responsibility and authorities for
making decision : transfer budget power, forcast and profit accountability to 100
managers.
- Mr. Linh: Not very understand this question, need support from team member….
Note: giving proof like budget… to answer how much

4.3 What are the key success factors of any successful people development system?
Strong supportive system:
● Session C designed to support managers’ career interests and development
needs, the process generated evaluations, career forecasts, and succession
plans for every single management position at GE.
● HR professionals support to develop talents
● given opportunities and provided support to numerous people, particularly those
with untapped talent or underutilized abilities
Consider talent as the main resource
● compile a central corporate inventory on management talent, then track all “high-
potentials” to ensure they were exposed to a wide range of GE businesses
● check the best talent was being applied to the strategic priorities
● built the first corporate university to support management education

Partnership with HR professionals

● EMS consultants were moved from headquarters out into the field, to help
business leaders develop their talent
 ● HR professionals used networks with EMS peers to facilitate the transfer of
managers across the organization

Meritocracy-based culture
● GE employees were probably the most headhunted group in the world
(BankAmerica had recruited over 90 GE employees to its headquarters)
● almost all of those recruited were from “the highly valued 70%,” not from the top
20% that was the headhunter’s normal target.

Line managers responsible for people development

● get more front-line managers directly connected with customers
● supervise recruitment
Note: Role-model for others, next generation