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Leader Factory
GE's
global human resources chief Susan Peters on running the world's most
vaunted leadership development machine
If there's a constant thread
running through the 34 years that Susan Peters has spent at GE, it's been
the company's ability to churn out world class business leaders. A few
months ago, GE Chairman Jeff Immelt announced Peters - - who has served
across businesses ranging from plastics to appliances to NBC -- as the $
147 billion conglomerate's human resource chief. In India recently, Peters
chatted with CD on GE's leadership template, its new leadership
experiments, and the infamous S curve. Edited excerpts:
GE says that developing management talent is its core competence?
That sounds a little arrogant, right? If you think of what it takes to
design, make, sell and service products, it is all about people. So, we can
say we are a technology company, which we are, but you do not have
technology without great people. You do not have the ability to take a
product and evolve it to the market needs of India, Africa, Vietnam. The
idea of leadership development is about taking the people that you have and
making them better so that we make better outcomes for customers. How
has the GE leadership template changed in the last few years?
The challenge in leadership development is to understand which
attributes of leadership are foundational and which you have to change and
improve. Fundamental things might be things like your development theory of
the case. No matter what is going on in the market, your theory of the case
should be the same. And ours is that we believe in meritocracy as our
cultural base and then we believe everyone can and should be a leader in
the context of leadership being about personal development.
What do you look for in leaders in the New Normal?
Well, we actually did quite a bit of research post the financial
crisis. One thing we know about the new normal is that everything is going
to be evolving. We have always expected people to be clear thinkers, now we
expect them to do it in the context of a volatile world. I have to measure
people on their agility. Now we can even articulate clearly what it looks
like to show agility. An example we use quite frequently is external focus,
which is one of our growth values. A decade ago it was used to refer to
customer focus, but in this era it is a much broader set of stakeholders --
government, community, NGOs, regulators.
A lot of GE leaders are hired as CEOs. What are the tenets of leadership
that are inherent in a GE leader?
First, there is a very high expectation around a result orientation and
execution. The executive search community knows that and when your client
wants somebody who knows how to get things done, make things happen, they
often look to the GE leadership chain. Our leaders are strategic and
thoughtful and visionary coupled with an ability to make things happen,
because in the end it is all about outcomes for customers. Some of the
things that happen by osmosis within the company, people just absorb it.
Coaching and development of teams, we obviously measure that and improve it
constantly. When you have been the product of that system and you see your
colleague doing it, you pick it up and you do it. GE leaders tend to be
very ambidextrous. They can think long term and short term, they can do
strategy and tactics, they can think about getting things done but also
think about the big picture and that is a very unique combination.
What is the unique differentiator for GE in terms of people development?
The commitment of our leaders to these things. Leaders create leaders,
HR does not create leaders. Every year, through the Welch era, the Immelt
era, and prior to that even, we go through session C (a tough performance
appraisal and leadership assessment process). We talk about people, what we
can do to help that them develop and improve. The processes that we provide
are very robust, but the time and commitment and the high belief in this
system is a leadership game and they own it. Leaders are expected to train
other people, so if you go for training, most of the trainers are our
leaders.
I was reading an article you wrote in HBR, where you talked about a more
collegial and personal view of leadership rising through the workforce.
What's that?
The way work is done is evolving. For a long time work was done in a
very vertical way. The leader at the top had more information than the
person below them and that person knew more than the person below them and
it is sort of an approach where information was only shared in smaller
bites sizes as you went down. In today's world information is much more
ubiquitous. Everybody has access to what is going on internally and
externally. From a vertical structure, it has become a horizontal
structure. You have a horizontal way of getting things done and therefore
how does work get done best, through collegial connected teams, whether
they are physically together or not. In GE and in many other companies they
are scattered around the world, they are virtual. The way work gets done is
exciting, it is very retentive, people love seeing the outcome of their
work and remembering that they made that happen.
What was this global new directions experiment?
We had a few millenials on various training programs. We literally took
them out of their job and brought them to Crotonville. We taught them
teaming skills and the people who taught them were from a factory in our
aviation business. We made such incredible progress in teaming, where there
are no hierarchial structures and yet decisions are made. So those hourly
workers taught this team how to work together with no blocks. We said, do
whatever you want for three months, here is what we would like at the end.
A group of them in the second group rented a house
in California and they lived together for a week or two just working on the
project. In the very first group it was about what would it take to attract
and retain people like you in emerging markets. And they came back with 200
ideas and they narrowed it down to 70 ideas and then we out eight ideas and
we were actually implementing them as we go.
The way we did it was probably as important as the
outcome. They had so much fun that the next year we took another group. We
were thinking about building simplification in this company through speed
and decision making. Taking some tools of the lean startup approach of the
Silicon Valley and applying it in a big company. They helped us with that.
Most career assignments are quite structured. So
taking the structure away entirely was scary for us and scary even for the
young people who professed that this is their comfort zone, but it is not.
Well here is the end goal, but go figure out how to do it and there is no
boss. It was an experiment and we have to do even more of this kind of an
experimenting with different things in a lot of different places.
What makes GE leaders successful?
Good, intellectual business acumen, no matter what function you are in.
Then you need to have performance with integrity and you have to have a
history of performance. These are like tickets to the game. Once you are in
the game there are thousands of people, how do you get selected to be on
the team? A couple of differentiators stand out. Great leaders have great
peer relationships. They know how to leverage the people around them and
influence them to help get that work done. I would say they have an ability
to articulate the vision of what they want people to do. So they are great
communicators, they can inspire people to work. In today's world, with
people being so distracted, being a great communicator is actually one of
the skills of leadership that has stood the test of time.
A lot of people have tried to copy Crotonville but few have got it
right. What's so special about Crotonville?
Crotonville has been in the GE system since the mid 1950s. We have been
teaching there for so many years which is one of the reasons why it is not
replicable. It is one of the reasons why leaders teaching leaders is so
much a part of the culture of the company. But I would say that one of the
reasons Crotonville is unique and special is that, we impart courses for
multiple businesses from multiple geographies, from multiple functions
across multiple layers. You can have the most junior people there at the
same time Jeff (Immelt), is there. And everybody hits the bar at night and
we run into people and talk in the hallway, so there is a sort of this
magic thing you can't replicate. The second thing is we have been
re-imagining for several years now the Crotonville experience, what we
teach, how we teach, where we teach it and it really has been built to
reflect the new leadership charachteristics.
One of the things we learnt in our research as we
were going through what it takes to lead in today's world is that today's
leader will have to be much more reflective. Now that is not a phrase that
you would naturally think of with big business and GE. Reflection sounds a
little soft. But the truth is that today's world is so fast and there is so
much information that people are not getting enough time to think. So we
have forced more reflection into Crotonville classes.
We role model, we make people do things that are uncomfortable personally
and in groups. We know that development comes out of being outside your
comfort zone, so we try all kinds of things. We not only do training there
in these multiple industry, multiple region and country groups, we take our
leaders to different parts of the world. One of our key classes is the
classical BMC, the Business Management Class. We do three sessions a year.
They were in Thailand, Vietnam, Saudi, Qatar. We sent our team to Africa.
So some of this is just putting people to places that are different and we
know most adults learn by experience. We have changed the classrooms so
that it is a more physically moving. We busted through the walls and put
windows. We want the environment to reflect the realities of the world and
it's more about transparency and openness. So you have to have a very
integrated approach to thinking about this. You start by knowing that you
are never done. So, you never end - you say okay, this program is done,
because that program has to change and evolve all the time. So people who
have been in MDC class of November 2013 and you go in March 2014, there are
going to be differences.
GE has always been a company who has pushed the insider leader. In a
world which is changing so fast and it is all about diversity of thought,
are you still sticking to that inside leader or more open to that than
earlier times?
In the last five years, we have had many more external leaders come
into the company. Banmali Agrawala, our India CEO, is a great example. We
had an expat here, John Flannery, and we knew that someday he would leave
and bringing Banmali in and working with them together for a while was
smart for everybody. While we still have incredible growth opportunity for
GE talent, we also have many more people coming from outside.
The GE S-curve practice has been followed by many companies. But firing
last 10% can be a dangerous practice if not done right as often muscle gets
cut with the fat without distinction. What do other companies don't get?
I have been with the company a really, really long time and through
that whole time there has been some system that has differentiated people.
On average, for the last 20 years the involuntary attrition level has been
around 7%. So you know, 10% is a nice round number but that's not the
truth, the real question that we should be asking is how do you get there.
What we want is to find the best people, put them in the top, recognize,
reward them, grow them, ensure that the people who are really carrying the
company are getting the right feedback and support and training and
development. Those who are not moving apace too get feedback in development
as their first course of action, but if they cannot make it then we help
them leave with respect and dignity. We will always believe in
differentiation. We are more about guidelines than specific numbers. We
want to make sure that people do not do anything silly just to meet the
number. I have to put 10% in this box and I do not really believe this and
we do not want that, we want people to use judgment in the process. There
might be teams in GE who have no people that are on that list, there are
others who have 15%. You have to calibrate, you have to talk about it and
you have to be fair and give people time.
vinod.mahanta
CDET131115
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