CORPORATE LEADERSHIP COUNCIL

MAY 2001
www.corporateleadershipcouncil.com
CASE PROFILE

GEs Session C
Leadership Talent Assessment

FEATURED COMPANY

EXECUTIVE SUMMARY
COMPANY:

GENERAL ELECTRIC

HEADQUARTERS:

FAIRFIELD, CONNECTICUT

INDUSTRY:

DIVERSIFIED MANUFACTURING

2000 EMPLOYEES:

313,000

2000 SALES:

$129 BILLION

! In the face of rapidly-changing business priorities and leadership

requirements, General Electric Co. (GE) faces an imperative to
ensure the depth and continuity of corporate leadership talent and
executive succession.
! Session C is the primary element for leadership potential
identification and development planning at GE. The annual
process is a rigorous CEO-led audit of leadership talent and
produces a snapshot of the firms leadership bench.
! Leadership talent assessment and development have enabled GE
to create a talent-focused culture and earn recognition for
excellence in future leadership development practices.

CHALLENGE AT HAND

HR SOLUTION

In an environment of rapid change and talent mobility, leadership

continuity is critical in safeguarding the competitive strength of the
organization. Most firms have found themselves ill-prepared to
achieve this: in a 1998 survey only three percent of 6,000 executives
occupying top 200 positions at 50 large US firms strongly agreed that
their organizations develop talent quickly and effectively.1

Overview of GEs Leadership Talent Planning Cycle

Several aspects of General Electrics (GEs) business intensify its

need to ensure strength and continuity in corporate leadership. In
recent years, GE has been:
! Diversifying and expanding its operating markets
! Continuing global growth
! Venturing into new economy businesses

Traditional approaches to leader identification, including succession

planning practices such as position-person replacement charts, have
become inadequate as GEs leadership needs have changed rapidly.2
The company faces a common challenge: to build a process that
identifies talent from every source and explicitly develops required
competencies to generate flexible pools of leadership candidates.

The foundation of GEs leadership development is an annual cycle of

strategy and talent planning activities that explicitly consider the
availability and development of the talent required to deliver against
corporate strategy. This annual cycle is represented in Figure 1.
6

FIGURE 1: GES STRATEGY AND TALENT PLANNING EVENTS6

JAN
Executive Retreat:
To define business
strategy and discuss
best practice solutions
FALL
Sessions S-1 and S-2:
To examine 3-year
business outlook and
talent requirements

This leadership identification and development process requires

several features in order to effectively fulfill its purpose:3,4,5
! Alignment with corporate strategy and culture To produce an

executive cadre that supports GEs strategic direction and values.

! Multi-level, cascaded stewardship To ensure that GE sources

talent from across all its many operations.

! Rigorous assessment against key competencies To support the

validity of talent assessment across GE divisions and the targeted

development of competencies that are key to GEs strategic vision.
! Central ownership of talent To facilitate the efficient

allocations of GEs development resources, and to reinforce

accountability.

MAR ( AND JUN, SEP, DEC)

Corporate Executive Council:
To discuss and collaborate on
next steps against agenda set
at Executive Retreat
APR / MAY
Session C:
To assess and plan
development of current
and future crossbusiness leadership

Session C is CEO-led
audit of leadership
talent to plan leader
development and
succession

Session C is GEs vehicle for identifying individuals across the firm

with the potential to provide future leadership to the organization. It
is also a forum for planning the professional development of these
individuals and for considering succession into management roles.
GEs annual human resources review gives a broad view of the
team its strengths, and its needs. By reviewing the group as a
whole, managers can identify ways to further each individuals
career while supporting the overall goals of the business. Session C
is an essential part of succession planning to ensure a pipeline of
management talent for GEs future

2001 CORPORATE EXECUTIVE BOARD

CATALOG NUMBER: CLC14UII3

Career Management http://www.ge.com

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CORPORATE LEADERSHIP COUNCIL

MAY 2001
GEs Session C Leadership Talent Assessment

HR SOLUTION (CONTNUED)
The Session C Talent Audit Process
During April and May each year, GEs CEO and SVP of Corporate
HR travel to each of GEs operating units to lead Session C: a daylong audit of the performance of the management team and the
potential of rising talent.7 This session has several objectives:
!
!
!
!
!

Consideration of the units strategic outlook and talent implications

Review of the performance of key personnel
Identification of rising talent
Cross-calibration of talent across the organization
Formulation of tactics for handling the top 20 percent
and bottom 10 percent of performers
! Planning for succession into senior roles
! Planing of development actions for high-potential managers
Performance and talent are appraised and discussed with reference to
GEs leadership competency framework (represented in Figure 2).
A 1-to-5 scale is used to rate individuals relative strengths against
these competencies, ensuring that cross-candidate, cross-company
comparisons are valid.8

The agenda for Session C (a hypothetical agenda is shown in Figure

3) facilitates a comprehensive but efficient review of the performance
and potential of unit personnel. It begins with a performance review
of the CEOs direct reports (these individuals do not attend this part
of the session), includes an overall people review (presented by the
units senior functional leaders) and ends with an assessment of the
talent pipeline into and out of the business unit.
16

FIGURE 3: HYPOTHETICAL AGENDA FOR SESSION C16

8.30am 10.30am
Corporate Participants:
CEO
Vice Chairman
Vice Chairman
SVP, HR
VP, Exec Development
Business Unit
Participants:

1. ORGANIZATION CHANGES
" Strategic changes
" Employee movement
2. REVIEW OF DIRECT REPORTS
" Performance/promotability/development
" Question/answer
3. BACKUPS
4. TALENT REVIEW
" New hires/transfers
" Women/minorities
" Key talent retention
" Performance improvement initiatives

Unit CEO
VP, HR

5. CROTONVILLE COURSE ASSIGNMENTS

FIGURE 2: SAMPLE GE LEADERSHIP COMPETENCIES (1996) 9

" Vision
" Customer/Quality/Cost
" Integrity
" Accountability/Commitment
" Communication/Influence
" Shared Ownership/Boundaryless

10.30am 4.30pm
" Team Builder/Empowerment
" Diversity
" Knowledge/Expertise/Intellect
" Initiative/Speed
" Global Mindset

As corporate strategy alters, GE revises its leadership competencies

accordingly. Since these competencies are the frame of reference for
the Session C assessment, talent identification and planning processes
remain aligned with strategic priorities.

Additional Business
Unit Participants:
VP, Business
Development
VP, Power Generation
VP, Finance
VP, Americas
(other direct reports)

6. QUALITY / SIX SIGMA REVIEW

! organization structure, people, process
7. INTERNATIONAL REVIEW
! organization structure, people, process
8. SERVICE REVIEW
! organization structure, people, process
9. GROWTH REVIEW
! organization structure, people, process
10. TALENT PIPELINE

Source: Council hypothetical, The Next Generation (1996)

Session C discussions of employee performance and potential are

based on information from several sources:10
! Individual internal resum and self-assessment

As an element of performance at GE, all employees complete a

one-page resum form, detailing career history, skills and
development needs.11 The document also shows ideal next moves,
as discussed with the candidates manager.12

At Session C, GEs CEO and other participants use a reference tool

that displays a snapshot of each individuals performance and
potential. A two-page review document is compiled for each
individual to be discussed, consisting of four elements:
! Career background/experience
! Promotability/performance ratings
! 360-degree feedback summary

! Chronological In-Depth Structured (CIDS) interview

GE conducts CIDS interviews with senior staff to inform transfer

or promotion decisions. These intensive interviews (lasting up to
five hours) examine key accomplishments, failures and mistakes in
the course of the individuals career.13 The interview generates an
assessment and development report.
! Performance appraisal

! List of identified strengths and development needs, with possible

developmental actions to be taken

A representation of a two-page review document is shown in
Figure 4. These review documents are the stimuli for between five
and ten minutes discussion of each key business unit leader by the
executive team.17

Performance appraisals are completed by the individuals direct

managers. They include the individuals own reactions to the
assessment14 and 360-degree feedback from managers, peers and
staff, illustrating relative strengths and weaknesses.
! Latest career potential assessment

A manager two levels above the reviewed individual formulates an

assessment of career progression/potential.15
2001 CORPORATE EXECUTIVE BOARD

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CORPORATE LEADERSHIP COUNCIL

MAY 2001
GEs Session C Leadership Talent Assessment

FIGURE 4: SESSION C INDIVIDUAL PERFORMANCE / POTENTIAL REVIEW DOCUMENT COUNCIL HYPOTHETICAL

This two-page spread of performance and potential data guides discussion of each individuals performance during Session C.

Background section gives context

for discussion of managers current
performance.

Manager

Peer

Staff

GE Service: 20 years

Promotability / Performance
Promotability 1 .
Performance A .
Trend Upward .
Accomplishments
! Delivered $25m cost

reduction through Six Sigma

efforts; expect $46m in 2001
! Eliminated management
layer
! New power system study
contracts in Turkey,
Pakistan, China, Japan, etc.

Vision

Focus

Customer

Integrity

Accountability

Communication

Diversity

Team-buiding

Gas Turbine
Steam Turbines
Turbine, Tech
Gas Turbine
PG Mktg Prod Mgr
PG Engineering
PG Customer

Knowledge

Design Engineer
Development Engineer
Mgr, Turbine Design Engr
Mgr, Gas Turb Dev Engr
Prog Mgr, Adv Machine
Mgr, Adv Engineering
GM, Engineering Projects

Boundaryless

Key Courses
MDC 92 & BMC 96

Experience
85-88
88-89
89-92
92-94
94-97
97-99
99-

4
3

Initiative

BS Mechanical Engineering,
Clarkson 81
MS Mechanical Engineering
RPI 85

2
1

Background / Experience
Education

360-Degree Data

Global Mindset

Bob Young
VP, Power Generation Engineering

Leadership ability evaluated

against corporate standard, not
requirements of specific role

Development / Actions

Performance/potential ratings allow

company-wide cross-calibration of talent

Strengths

Development Needs

Plans/Actions

! Superior tech skills

! Broad industry knowledge
! Understands regulatory

! Can be perceived as micro-

! Global BM course
! Meet with reports to

Promotability
1 Highly promotable, significant leadership potential
2 Promotable, significant leadership potential
3 Effective; limited promotability
4 Too soon to call
5 Improvement needed

environment
! Proven success with
customers
! Builds/challenges highperforming teams

Performance
A - Exceeds; B - Fully meets;
C - Partially meets; D - Fails to meet

Career Interests

managing; needs to find ways

to drive change while
modeling the values

discuss 360 issues

! Continue to improve

executive-level
presentation skills

! Involvement in commercial

strategy will support interest

in/potential for career growth
in Sales/Country Mgmt/Mktg

! Leadership role in Mktg

! Global Sales/Country Mgmt/Mktg

Future Assignment
! VP, Marketing

Development actions determined

based on assessment of individual
need and career aspirations

Source: Corporate Leadership Council hypothetical, The Next Generation (1996)

HR SOLUTION (CONTNUED)

FIGURE 5: HYPOTEHTICAL PERFORMANCE/POTENTIAL MATRIX

Potential
High
High

Keys to the Success of Session C Assessment and Planning

! Senior Stewardship Drives Talent Development

The CEOs committed and high-profile stewardship of talent, and

his requirement that other senior leaders be fully invested in talent
development, ensures that there is an ongoing focus on leadership
readiness at GE and that the process is rigorous and efficient.
! Central Oversight Ensures the Integrity of Talent Grading

The product of Session C is a nine-box matrix that compares the

suitability for promotion of all of the considered individuals. The
matrix plots managers bottom-line performance against their
ability to lead according to the GE values, as shown in Figure 5.
The matrix provides a snapshot of the health of the leadership
talent bench across GE. The CEOs familiarity with the content
of Session C at each business unit prevents grade inflation and
calibrates ratings across divisions, ensuring that the matrix that is
ultimately produced provides a realistic picture to guide succession
planning and appropriately focus developmental activities.

Dearing, M.
Tell, B.
Otey, P.

Townes, J.
Cain, R.

OBrien, C.
Lamp, D.
Kramer, M.
Hoh, L.

Hudson, P.
Nicol, T.
Famous, E.

Reilly, S.
Snow, D.
Sampson, R.
Rucker, D.
Stich, M.
Raker, L.
Mendez, C.

Low

Performance

The intimate involvement of the CEO in Session C talent

assessment and planning is the defining feature of GEs leadership
development process. The CEO invests a significant amount of
time in talent-related activities such as Session C in his time as
CEO of GE, Jack Welch acknowledges that most of his time has
been spent on evaluating people: Im the top personnel guy
,
around here.18 19

Low

al-Hassan, A.
Jones, K.
Gonzales, B.

Source: Council hypothetical, The Next Generation (1996)

! Clear Accountability for Talent Development

At the conclusion of Session C discussions, the CEO and senior

executives agree and sign off on developmental actions for each
individual. These actions address the areas in which individuals
need to develop their talent to assume leadership positions across
GE. In effect, the corporate headquarters at GE owns the top 500
people and rents them out to the firms businesses.20 Training
and experiential development opportunities might include:
!
!
!
!
!

Taught courses in technical or managerial skills at Crotonville,

GEs corporate training facility
Taught courses external to GE
Lateral job moves across regions, functions, or business units
Promotion to positions of greater/different responsibility
Assignment to special task forces or project teams

2001 CORPORATE EXECUTIVE BOARD

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CORPORATE LEADERSHIP COUNCIL

MAY 2001
GEs Session C Leadership Talent Assessment

HR SOLUTION (CONTNUED)

High-Quality Leadership Bench

! Clear Accountability for Talent Development (continued)

GEs processes of leadership identification and development have

produced a cadre of strong executive talent that has stewarded GEs
own growth and also been targeted for key leadership positions at
several other well-respected companies.

GEs ability to create accountability among managers for the

development and quality of the talent pipeline is key to its success
in maintaining a strong leadership bench. Along with the weight
attached to talent development by order of senior executive
involvement in Session C, more explicit methods are used to
ensure that all leaders are committed to nurturing GEs next
generation of leaders.
Managers are expected to coach their reports towards career goals,
a process that cascades from the CEO and senior executive team to
every professional-level employee at the company. Performance
appraisals include a negative variable for those executives who fail
to foster the development of talented employees, or who impede
the movement of these employees across the business. In addition,
compensation and career opportunities reflect individuals records
,
for talent development. 21 22
One of the things I evaluated people on was whether there
were four people who could fill someones position If I had
a great manager who didnt have strong candidates that could
do his job, Id make a very explicit deal. Id say You can
have six months to find people who can perform at a higher
level or [you can] develop it in your own people. Ill provide
any help you need. But if those people arent here in six
months, Im going to get rid of you because I cant have you
making the numbers but not getting people ready to lead. 23
Dick Stonesifer, Former CEO of GEs appliances business

Deep, honest, frequent performance reviews are difficult, even

painful, which is why most companies dont do them. But they are
clearly one of the reasons why GEproduce[s] so many
outstanding managers. 28
Geoffrey Colvin, Staying Smart/Managing Companies
and Careers in the New Economy Fortune

In Business Weeks late 1990s list of the 20 most sought-after

executives by search firms seeking new CEOs, five of the candidates
were at GE. Among other high-profile appointments, 29,30 the firm
has recently seen its business leaders take new positions as Chairman/
Chief Executive of 3M,31 CEO of Home Depot32 and President of
TRW, Inc.33

Commercial Success
Over the last ten years, GE has achieved steady positive growth
(see Figure 6), whilst effecting substantial change in terms of its core
activities and operating markets, restructuring, expanding globally
and acquiring ventures at a very high rate (averaging more than 100
acquisitions per year since 1997).34
35

FIGURE 6: GES GROWTH RECORD (1991-2000)35

! Targeted Individual Development Actions

Session Cs rigorous grading, ranking and development planning

process allows GE to identify its most talented staff and ensure
targeted development for these individuals. Of the 3,000 managers
considered, approximately 360 are selected to attend the
companys leadership training programs at Crotonville.24,25 At
these courses, the CEO and senior executives are regularly and
heavily involved in facilitating and teaching, offering participants
exposure to key leadership roles.26

$140

12.0%

$120

10.0%

$100

8.0%

$80
6.0%
$60
4.0%

$40

2.0%

$20
$0

0.0%
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

LESSONS LEARNED

Revenue ($bn)

Net Profit Margin (%)

Talent-Driven Corporate Culture

GEs portfolio of integrated talent review and development processes
and the CEOs high-profile leadership of these processes has
succeeded in creating a definitively talent-focused organization.
While Session C is not solely responsible for effective leadership
development at the firm, it is the anchor of the process, and has a
great impact on the organization and its staff.
Every time I go to a meeting, every time I run into a group
of people, Im not only learning what theyre trying to tell
me, but Im appraising them For us, every meeting
becomes a Session C. 27

In recognition of its financial success, and the ability of its leaders to

formulate and execute on strategies that have stewarded its
continuing global expansion and diversification and its entry into new
economy markets, GE was voted Fortune magazines #1 Most
Admired Global Company in 2000.36
In a business environment where the quality of an organizations
leadership and intellectual capital are key to its reputation and
competitive health, the admiration afforded to GEs business practice
is testament to the companys ability to successfully incubate and
develop leadership talent.

Dennis Dammerman, CFO, General Electric Co.

2001 CORPORATE EXECUTIVE BOARD

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CORPORATE LEADERSHIP COUNCIL

MAY 2001
GEs Session C Leadership Talent Assessment

Elizabeth Chambers et al, The War for Talent, The McKinsey Quarterly No. 3 (1998). http://www.mckinseyquarterly.com
John Beeson, Succession Planning, Across the Board (1 February 2000). Obtained through Dow Jones Interactive.
3
Best Practices in Career Path Definition and Succession Planning, Best Practices LLC. http://www.best-in-class.com
4
Edmund Metz, Designing Succession Systems for New Competitive Realities, Human Resource Planning (January 1998). Obtained through Dow Jones Interactive.
5
John Beeson, Succession Planning.
6
Author Unknown, The House That Jack Built, The Economist (18 September 1999). Obtained through Dow Jones Interactive; Ram Charan, GEs Ten Step Talent Plan,
Fortune (17 April 2000). http://www.fortune.com; John Byrne, How Jack Welch Runs GE, Business Week (8 June 1998). http://www.businessweek.com.
7
Corporate Leadership Council. CEO-Led Talent Audit, The Next Generation. Washington: Corporate Executive Board (1996).
8
ibid.
9
ibid.
10
Brad Smart, Extract..Talent Machine, The Economic Times of India (26 September 1999). Obtained through Dow Jones Interactive.
11
Stratford Sherman and Ani Hadjian, How Tomorrows Best Leaders Are Learning Their Stuff, Fortune (27 November 1995). Obtained through Dow Jones Interactive.
12
Nicholas Stein, Winning the War to Keep Top Talent Fortune (29 May 2000). Obtained through Dow Jones Interactive.
13
Brad Smart, Extract..Talent Machine.
14
ibid.
15
ibid.
16
Corporate Leadership Council. CEO-Led Talent Audit.
17
ibid.
18
Geoffrey Colvin, Staying Smart/Managing Companies and Careers in the New Economy, Fortune (2 August 1999).
19
Brad Smart, Extract Talent Machine.
20
Robert Fulmer et al, Developing Leaders: How Winning Companies Keep on Winning, Sloan Management Review (October 2000). Obtained through Dow Jones Interactive.
21
Noel Tichey and Eli Cohen, The Teaching Organization, Training & Development (1 July 1998). Obtained through Dow Jones Interactive.
22
ibid.
23
Ann Monroe, Dennis Dammerman (General Electric CFO), CFO (1 September 1998).
24
John Byrne, How Jack Welch Runs GE.
25
Nicholas Stein, Winning the War to Keep Top Talent...
26
ibid.
27
Ann Monroe, Dennis Dammerman (General Electric CFO).
28
Geoffrey Colvin, Staying Smart/Managing Companies and Careers in the New Economy.
29
Noel Tichey and Eli Cohen, The Teaching Organization.
30
Nanette Byrnes, What Really Happened to the Class of GE, Business Week (13 November 2000). Obtained through Dow Jones Interactive.
31
Michael Arndt, McNerney: A Short Jump from GE to 3M, Business Week (18 December 2000). Obtained through Dow Jones Interactive.
32
Justin Bachman, Former GE Executive Named New Home Depot Chief Executive Associated Press Newswires (5 December 2000). Obtained through Dow Jones Interactive.
33
Author Unknown Former GE Executive Selected as TRW President, Associated Press Newswires (11 November 1999). Obtained through Dow Jones Interactive.
34
http://www.hoovers.com
35
http://www.hoovers.com
36
http://www.fortune.com
2

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views expressed herein by third-party sources do not necessarily reflect the policies of the organizations they represent.

2001 CORPORATE EXECUTIVE BOARD

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