Training and Development - The GE Way


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Case Details:

Case Code : HROB072
Case Length : 18 Pages
Period : 1981-05
Pub Date : 2005
Teaching Note : Available
Organization : General Electric Company
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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"Great people build great companies. Talent development is not a slogan at GE, it is a way of life."1

- Jack Welch, Chief Executive Officer (1981-2001), General Electric Co. in 2005.

"Developing leaders, developing people takes three things. It takes leadership commitment, it takes disciplined processes and it takes commitment to people. It works for us." 2

- Bob Corcoran, Chief Learning Officer, General Electric Co. in 2004.

"There is reason to believe that they are a better training ground than we are."3

- Nitin Nohria, Professor, Harvard Business School in 2003, commenting on GE's ability to develop managerial talent.

Introduction

In 2005, General Electric Company4 (GE) was one of the world's biggest conglomerates with a presence across 160 countries, 11 varied businesses and employee strength of around 307,000. Some of its businesses were large enough to make it to the Fortune 500 list on their own. GE had not only survived successfully for 133 years5 but had also consistently generated great value for its shareholders, despite its size. GE was the only company with a continuous listing in the Dow Jones Industrial Average6 since the original index was constructed in 1896. GE had won many accolades as the world's most respected company7 in appreciation of its people management and sustained profitability.

One of the factors that contributed to the company's success was its ability to train and develop its multinational, diverse workforce in a successful manner.

GE was one of the first companies to establish a management development center to train and develop its employees. During the 1980s, this center put the company on a growth trajectory that very few corporations could match. It inspired many other renowned companies like Boeing Co., Home Depot and Toyota Motors to model their training centers on the one at GE.

In the media, GE has been referred to as a "captain-of-industry university" or "the leadership factory" in recognition of its ability to produce exceptional leaders who went on to became CEOs at other Fortune 500 companies (Refer Exhibit I).

Training and Development - The GE Way - Next Page>>

1] Ellen Florian Kratz, "Get Me a CEO from GE", Fortune, April 18, 2005.

2] Tim Sosbe, "Bob Corcoran: The Power of GE Education", Chief Learning Officer, www.clomedia.com, March 2004.

3] The GE Talent Machine, http://www.economist.com, October 23, 2003.

4] Headquartered at Fairfield, Connecticut, USA. GE had revenues of $152.4 billion and profits of $16.6 billion for the year 2004.

5] Thomas Alva Edison (Edison), the inventor of the incandescent light bulb set up The Edison Electric Light Company (EELC) in 1872, to conduct experiments on electricity. In 1879, he invented a carbon-filament lamp and direct current generator for incandescent electric lighting. The EELC comprised a number of smaller companies involved in different businesses ranging from power stations and wiring grids to electrical appliances. The EELC merged with The Thomas-Houston Electric Company in 1892, to form General Electric Co.

6] The Dow Jones Industrial Average (DJIA) a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the Nasdaq. The DJIA was invented by Charles Dow and is the oldest and single most watched index in the world.

7] Financial Times & Price Waterhouse Coopers have been drawing up the Financial Times /PricewaterhouseCoopers World's Most Respected Companies ranking annually since 1997. The survey adjudged GE as the No. 1 company from 1997 to 2004.

  

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