Do leaders create a successful business culture or does an innate framework need to be in place first? The two are inextricable, says Susan Peters, vice-president, executive development, and chief learning officer at General Electric. She briefs Ross Davies on some of the guiding principles that continue to see the group foster its talent and innovate – even in difficult economic times.
As platitudinous as it may have become, the following aphorism still rings true: an organisation is only as good as its people. However, in line with the changing face of the workplace, the area of talent management has become a multifaceted sphere, with each organisation holding its own set of benchmarks and metrics.
Speaking to The New York Times in 2012 on the topic of innovation in the workplace, Susan Peters, vice-president, executive development and chief learning officer at General Electric (GE), stated: "We evaluate employees not only on their accomplishments, but also on their ability to reflect the company's guiding principles."
As one of the world's largest and best-known multinationals, GE has long been identified as a forerunner in the field of talent management, buttressed by a long-running leadership development programme. But, according to Peters, its 'guiding principles', while rigorous, have evolved in conjunction with the needs of the marketplace.
"The emphasis on evolution really reflects world events of the last few years," she says. "That doesn't just go for the global financial crisis, but also the rise in globalisation, pace of communication and the new virtual workplace. We have tried to learn from these trends and transferred those lessons into the community of leaders we have."
Collaboration with stakeholders
A stuttering international economy has indubitably served as a learning curve for multinationals. In September 2009 - a year after Lehman Brothers' collapse - GE dispatched several of its senior executives around the world to consult over 100 organisations - from Toyota to the Boston Celtics basketball team - and pool ideas about developing next-generation business leaders.
Such events also prompted the group to re-evaluate the notion of external focus, corporate responsibility and collaboration with its strata of stakeholders.
"These days, external focus is not just about the line of sight to customers and shareowners, but also a much broader set of stakeholders," says Peters. "Whether they are governments and local communities or regulatory agencies and non-profit organisations, leaders need to make their decisions in the context of these stakeholders. Most people would agree that there is a wider range of ramifications that need to be considered than in the past; 20 years ago was certainly a much simpler time."
This approach also revolves around the idea of flexibility. Business leaders serving in uncertain times need to display agility, long-sightedness and direction. This, in turn, chimes with the idea of imagination and courage - that a company should be prepared to take risks on an individual and plural level in order to reap higher rewards.
"It is something that's easy to put on paper, but harder to put into operation," explains Peters. "We want leaders who are willing to voice their ideas, and who also have the courage and conviction to turn them into something real and actionable for the group as a whole."
Crotonville: the epicentre of GE culture
Evoking the entrepreneurial spirit of company founder Thomas Edison, GE's central ethos is based around the idea that "anybody at any level within the organisation can be a leader". Individuality, as a company hallmark, can then be harnessed to inspire cumulative productivity.
"We look at leadership development very much like our technology teams look at product development," says Peters. "Our philosophy firstly revolves around the idea that every individual that improves themselves and develops their skill sets will grow in confidence. Then, with higher expectations of themselves, and the people around them, we all rise collectively. Everybody has a part to play in that chain."
GE has at its disposal Crotonville, the oldest corporate university in the US; located approximately 45 minutes from New York by train, leadership programmes run throughout the year on its 59-acre campus. Notably, ex-alumni include current CEO Jeff Immelt and his high-profile predecessor Jack Welch, who studied there during the early 1960s, and Welch's predecessor, Reg Jones, was a participant in the first class at Crotonville in 1956.
"In many ways, it is the epicentre of our culture," explains Peters. "While we have been evolving the expectations of our leaders, we have to concurrently evolve the experience they have in the classroom. This has meant reimagining our curriculum, physical spaces and overall development experiences to ensure that they reflect contemporary pedagogy in terms of the way people want to learn."
Since buying the Crotonville estate in 1956, GE has expanded its leadership programmes beyond the environs of the Hudson Valley to throughout the world. In line with globalisation and the group's presence across several markets, this has proven to be judicious. Aside from the US, it now has research centres in Shanghai, Bangalore and Munich, while another facility in Rio de Janeiro is on the brink of completion.
According to Peters, the theoretical aim of such bases is to create a shared experience among leaders - incumbents and potential candidates. How easy is it to accomplish this in light of GE covering so many disparate industries in different regions (its workforce amounts to roughly 300,000 employees across 164 countries)?
"Our mission is to connect the leaders of today and tomorrow," she says. "We have this incredible melting pot of ideas that we are trying to leverage. We also feel pretty strongly about bringing people together - even in these challenging economic times, people still come to these locations for face-to-face training, rather than just doing everything online."
GE has sought to further innovate its workforce through its Global New Directions initiative. Launched in 2011, the scheme takes 20-strong teams - predominantly comprising Generation Y individuals - from its various businesses, functions and geographies, and sets them out on a three-month assignment to brainstorm and identify new ways of attracting, developing and retaining its international talent pool.
"These teams work in a self-directed way, meaning they have no boss per se," explains Peters. "They have done some incredible things, particularly when it comes to connectedness. We have also had them look at how we can create a culture of speed - a huge advantage in today's world. It's been really successful and we will continue to develop it in the future."
The group also uses the GE-McKinsey Nine-Box Matrix - a framework first developed in the 1970s as a way of evaluating different business units and ensuring the company prioritises investment in individuals. This, in turn, allows for the parlaying of talent and feedback into concrete performance and results, as Peters explains.
"The measurement is essentially based on what you do and how you do it," she says. "Then everyone ends up being put in one of those nine boxes, based on a three-tier rating system. The feedback they then receive focuses on those qualities I mentioned before - imagination and courage. It forces, in effect, a differentiation."
Above all, it would seem, leadership should be bound to an entrenched culture of meritocracy and inventiveness. As identified by Peters in the New York Times interview, employees are then measured on their "capacity to take risks in championing ideas, learn from the experience and drive improvement".
"Our overarching leadership philosophy is based on nurturing and training," she says. "We can help you get there, give you opportunities, but we are very clear from the outset that the leader will then be held accountable. That is what you want a meritocracy to ultimately achieve."
Thomas Edison would surely approve.