Succession Planning at GE


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Case Details:

Case Code : HROB056
Case Length : 14 Pages
Period : 1996-2004
Pub Date : 2004
Teaching Note :Not Available
Organization : GE
Industry : Diversified
Countries : USA

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts

Leadership Development in GE

Succession planning is an ongoing, rigorous and challenging process at GE. GE adopted succession planning right from the mid-1900s. At GE, succession planning was not confined to only the top management, but was applied across all tiers of management.

The managers of GE's various businesses were encouraged to identify potential candidates and fulfill their development needs, and transform them into efficient leaders ready to take up top jobs at the company. As part of CEO succession planning, GE shifted its key candidates from one business to another to enable them to gain experience across all its businesses.

The company used mainly annual performance reviews for identifying potential candidates, until the early 1980s. However, after Welch took over as the CEO, the succession planning process at GE became a more systematic process, with the use of various analytical tools and the involvement of the top management in leadership development and succession planning.

Since early 1980s, the annual Human Resource Reviews (popularly called Session C) had been at the heart of succession planning at GE. The Session C process was reportedly given as much importance as financial monitoring in GE...

The CEO Succession Planning Process

The succession planning by Welch for his post had started way back in 1994, when Welch, with help of Bill Conaty (Conaty) and Chuck Okosky (Okosky), both vice-presidents, HR and Executive Development, created a list of essential qualities, skill and characteristics an "ideal CEO" should posses. The list mainly included elements such as integrity and values, vision, leadership, experience, edge, stature, fairness, energy, balance, insatiable appetite for enhancing knowledge, courageous advocacy, and most importantly, stomach to play for high stakes and being comfortable operating under a microscope...

Immelt Makes His Mark

During the first two years as GE's CEO, Immelt had to face many problems on account of September 11, 2001 attacks, the Enron debacle, and the global economic slump during the early 2000s, which affected the company's earnings severely. As a result, GE for the first time in ten years, failed to report double-digit earnings growth in the fiscal 2002 (Refer Exhibit IV). Though Immelt was not held responsible for the company's problems during this period, as most of them were triggered by the external environment, nonetheless he had to deal with the crisis...

Exhibits

Exhibit I: An Overview on Succession Planning
Exhibit II: The Welch Era at GE
Exhibit III: GE Under Jack Welch
Exhibit IV: GE & its Subsidiaries - Financial Highlights (2000-2003)
Exhibit V: Business Restructuring under Immelt
Exhibit VI: Major GE Initiatives under ACFC

 

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