Friday, February 27, 2009
Sunday, November 25, 2007
How top companies breed stars
How top companies breed stars
The world's best companies realize that no matter what business they're in, their real business is building leaders. Here's how the champs do it.
Monday, October 22, 2007
Fast Company: Analysis of Paralysis - If your strategy doesn't help employees act, it's not a strategy - Making Ideas Stick
Fast Company: Analysis of Paralysis - If your strategy doesn't help employees act, it's not a strategy
Excerpts
"Keep it simple, stupid." That's the advice every executive has received on how to share strategy with employees. The subtext is often, "Keep it simple, because your people are stupid." But you don't need to embrace simplicity just so your people can comprehend your message. The point of simplicity is more fundamental: Simplicity allows people to act.
More options, even good ones, can freeze us, leading us to stick with the "default" plan. This clearly is not rational behavior, but it is human behavior.
As Barry Schwartz puts it in his book The Paradox of Choice, as we face more and more options, "we become overloaded…. Choice no longer liberates, but debilitates. It might even be said to tyrannize."
Book: Amazon - Made to Stick
Made to Stick book web site
The takeaway is that we spend a great deal of energy trying to spread the word when we would be better served to improve the longevity of the word for the people that it reaches.
Excerpts
"Keep it simple, stupid." That's the advice every executive has received on how to share strategy with employees. The subtext is often, "Keep it simple, because your people are stupid." But you don't need to embrace simplicity just so your people can comprehend your message. The point of simplicity is more fundamental: Simplicity allows people to act.
More options, even good ones, can freeze us, leading us to stick with the "default" plan. This clearly is not rational behavior, but it is human behavior.
As Barry Schwartz puts it in his book The Paradox of Choice, as we face more and more options, "we become overloaded…. Choice no longer liberates, but debilitates. It might even be said to tyrannize."
Book: Amazon - Made to Stick
Made to Stick book web site
The takeaway is that we spend a great deal of energy trying to spread the word when we would be better served to improve the longevity of the word for the people that it reaches.
Chip Heath’s research suggests that sticky ideas share six basic traits.
- Simplicity. Messages are most memorable if they are short and deep. Glib sound bites are short, but they don’t last. Proverbs such as the golden rule are short but also deep enough to guide the behavior of people over generations.
- Unexpectedness. Something that sounds like common sense won’t stick. Look for the parts of your message that are uncommon sense. Such messages generate interest and curiosity.
- Concreteness. Abstract language and ideas don’t leave sensory impressions; concrete images do. Compare “get an American on the moon in this decade” with “seize leadership in the space race through targeted technology initiatives and enhanced team-based routines.”
- Credibility. Will the audience buy the message? Can a case be made for the message or is it a confabulation of spin? Very often, a person trying to convey a message cites outside experts when the most credible source is the person listening to the message. Questions—“Have you experienced this?”—are often more credible than outside experts.
- Emotions. Case studies that involve people also move them. “We are wired,” Heath writes, “to feel things for people, not abstractions."
- Stories. We all tell stories every day. Why? “Research shows that mentally rehearsing a situation helps us perform better when we encounter that situation,” Heath writes. “Stories act as a kind of mental flight simulator, preparing us to respond more quickly and effectively.”
Friday, July 06, 2007
Judgment Call - Warren Bennis says leaders are measured by the judgments they make—and he identifies three key areas where good judgment is essential
Judgment Call
By Warren Bennis
Warren Bennis says leaders are measured by the judgments they make—and he identifies three key areas where good judgment is essential.
There are four areas of knowledge that are critical to making good versus bad decisions: self-knowledge, social-network knowledge, organizational knowledge, and stakeholder knowledge.
Warren Bennis has studied leadership as much as any person on this planet. The 82-year-old distinguished professor of business administration and founding chairman of the Leadership Institute at the University of Southern California has led organizations and been writing, teaching and consulting about leadership for more than a half century. (He is also a former CIO Insight columnist.)
Still, the author of the forthcoming book, Judgment: How Winning Leaders Make Great Calls (Portfolio, November 2007), written with University of Michigan management professor Noel Tichy, says that while scholars haven't ignored the topic of judgment, it hasn't been addressed often enough. Bennis says his latest book "is certainly not the last word on judgment. I can tell you that without any false modesty; I feel I'm just beginning to understand judgment myself."
Bennis notes that we make thousands of judgment calls throughout our lives, from the frivolous to the momentous. Making sound judgments can determine our success in life. But for leaders, he says, the impact of making right or wrong judgment calls is amplified, because their decisions have a direct bearing on the quality of life of so many individuals—as well as on the organizations they lead. CIOs have a special responsibility, he told CIO Insight executive editors Allan Alter and Eric Chabrow, not only because they must execute good judgment, but also because they provide other leaders with the information they need. An edited version of his remarks follows.
By Warren Bennis
Warren Bennis says leaders are measured by the judgments they make—and he identifies three key areas where good judgment is essential.
There are four areas of knowledge that are critical to making good versus bad decisions: self-knowledge, social-network knowledge, organizational knowledge, and stakeholder knowledge.
Warren Bennis has studied leadership as much as any person on this planet. The 82-year-old distinguished professor of business administration and founding chairman of the Leadership Institute at the University of Southern California has led organizations and been writing, teaching and consulting about leadership for more than a half century. (He is also a former CIO Insight columnist.)
Still, the author of the forthcoming book, Judgment: How Winning Leaders Make Great Calls (Portfolio, November 2007), written with University of Michigan management professor Noel Tichy, says that while scholars haven't ignored the topic of judgment, it hasn't been addressed often enough. Bennis says his latest book "is certainly not the last word on judgment. I can tell you that without any false modesty; I feel I'm just beginning to understand judgment myself."
Bennis notes that we make thousands of judgment calls throughout our lives, from the frivolous to the momentous. Making sound judgments can determine our success in life. But for leaders, he says, the impact of making right or wrong judgment calls is amplified, because their decisions have a direct bearing on the quality of life of so many individuals—as well as on the organizations they lead. CIOs have a special responsibility, he told CIO Insight executive editors Allan Alter and Eric Chabrow, not only because they must execute good judgment, but also because they provide other leaders with the information they need. An edited version of his remarks follows.
Monday, July 02, 2007
Social Network Analysis Helps Maximize Collective Smarts
Social Network Analysis Helps Maximize Collective Smarts
This particular exercise followed a yearlong study of social networks in Mars’s sprawling research and development division. Top executives there wanted to improve the company’s ability to innovate and were concerned that their scientists weren’t networking enough with outside colleagues. To find out who was working with whom and how scientists were getting new ideas, they decided to map the group’s professional contacts using a process called social network analysis (SNA). In an online survey, R&D managers were asked to name the 15 people they work most closely with and whom they go to for advice, as well as further details of their professional network.
he company has determined, for instance, which scientists were overburdened (too many people were going to them for help) and is working on eliminating the need to go to senior people to get approval for things.
Looking at the company org chart, it turns out, often doesn’t tell the real story about who holds influence, who gives the best advice and how employees are sharing information critical for success. This all takes on greater urgency as millions of baby boomers prepare to retire over the coming decade.
SNA can help companies identify key leaders and then set up mechanisms—such as "communities of practice" or other groups—so that those leaders can pass on their knowledge to colleagues.
Over the past several years, with help from Krebs and other SNA believers, the corporate world has been waking up to the uses for this once arcane social science. Some of the interest stems from disappointment with efforts to build knowledge management databases that were largely ignored by employees.
SNA can also make the lack of connections (or collaboration) painfully clear.
"People sometimes don’t believe that they are disconnected from the rest of the organization, but in our case, a picture spoke a thousand words," Gulas says.
At Mars, the SNA project uncovered a lack of good communication between the snack food division in New Jersey and the food division in Los Angeles. "We found very few bridges between the two groups, and that lack of communication was leading to duplication of efforts in some areas," says Caroline Ruzicka, who was then group research and development manager for Masterfoods USA, a division of Mars, and has since left the company.
By mapping the social networks in their organizations, companies can find out ahead of time who has necessary knowledge and create ways of transferring it to younger employees before it’s too late.
...networking has been built into the development and performance review process, and scientists have to set goals on expanding their networks.
Those who turn out to be highly connected are often high performers, and conversely, those with few connections often are not performing as well.
This particular exercise followed a yearlong study of social networks in Mars’s sprawling research and development division. Top executives there wanted to improve the company’s ability to innovate and were concerned that their scientists weren’t networking enough with outside colleagues. To find out who was working with whom and how scientists were getting new ideas, they decided to map the group’s professional contacts using a process called social network analysis (SNA). In an online survey, R&D managers were asked to name the 15 people they work most closely with and whom they go to for advice, as well as further details of their professional network.
he company has determined, for instance, which scientists were overburdened (too many people were going to them for help) and is working on eliminating the need to go to senior people to get approval for things.
Looking at the company org chart, it turns out, often doesn’t tell the real story about who holds influence, who gives the best advice and how employees are sharing information critical for success. This all takes on greater urgency as millions of baby boomers prepare to retire over the coming decade.
SNA can help companies identify key leaders and then set up mechanisms—such as "communities of practice" or other groups—so that those leaders can pass on their knowledge to colleagues.
Over the past several years, with help from Krebs and other SNA believers, the corporate world has been waking up to the uses for this once arcane social science. Some of the interest stems from disappointment with efforts to build knowledge management databases that were largely ignored by employees.
SNA can also make the lack of connections (or collaboration) painfully clear.
"People sometimes don’t believe that they are disconnected from the rest of the organization, but in our case, a picture spoke a thousand words," Gulas says.
At Mars, the SNA project uncovered a lack of good communication between the snack food division in New Jersey and the food division in Los Angeles. "We found very few bridges between the two groups, and that lack of communication was leading to duplication of efforts in some areas," says Caroline Ruzicka, who was then group research and development manager for Masterfoods USA, a division of Mars, and has since left the company.
By mapping the social networks in their organizations, companies can find out ahead of time who has necessary knowledge and create ways of transferring it to younger employees before it’s too late.
...networking has been built into the development and performance review process, and scientists have to set goals on expanding their networks.
Those who turn out to be highly connected are often high performers, and conversely, those with few connections often are not performing as well.
Saturday, January 27, 2007
FORTUNE Magazine: What's that spell? TEAMWORK!
What's that spell? TEAMWORK!
Harmony. Cooperation. Synchronized effort. It's difficult, but it can be learned. What's the best way to do so? Watch the great teams very closely - and then join one of your own.
(FORTUNE Magazine) - In 1972 a crack commando unit was sent to prison by a military court for a crime they didn't commit. These four men promptly escaped from a maximum-security stockade to the Los Angeles underground. Today, still wanted by the government, they survive as soldiers of fortune. If you have a problem, if no one else can help, and if you can find them, maybe you can hire the A-Team.
The A-Team went off the air in 1987- still wanted by the government -but television has never produced a better blueprint for team building. The key elements of its effectiveness: a cigar-chomping master of disguise, an ace pilot, a devilishly handsome con man, a mechanic with a mohawk, and an amazingly sweet van. Those particulars might not translate to all business settings. But clear definition of roles is a hallmark of effective collaboration. So is small team size - though four is slightly below the optimal number, 4.6.
And the presence of an outside threat - like imminent recapture by government forces - likewise correlates with high team cohesion. To wit: France and England, which bloodied each other for centuries before they noticed ... Germany. Another universal characteristic of teams is that they're, well, universal. If you work for a living, we're guessing you interact with other humans. (Lighthouse keepers, we'll see you next time.)
If you think this is mushy stuff, marginal to the daily battle of business, consider what is happening atSony (Research). CEO Howard Stringer and President Ryoji Chubachi are trying to restore the fighting spirit (and higher profits) at a company built on decentralized teams. Their theme: Sony United.
This issue also takes you deep inside a six-man team of Marines operating in Iraq; the team that built Motorola (Research)'s RAZR phone; the cutthroat yet symbiotic pack of cyclists in the Tour de France; and the world of an open-source software company. Each of these stories challenges a piece of conventional wisdom.
The fact is, most of what you've read about teamwork is bunk. So here's a place to start: Tear down those treacly motivational posters of rowers rowing and pipers piping. Gather every recorded instance of John Madden calling someone a "team player." Cram it all into a dumpster and light the thing on fire. Then settle in to really think about what it means to be a team.
We're certainly not against the concept of teamwork. But that's the point: All the happy-sounding twaddle obscures the actual practice of it. And teamwork is a practice. Great teamwork is an outcome; you can only create the conditions for it to flourish. Like getting rich or falling in love, you cannot simply will it to happen.
We will go further and say: Teamwork is an individual skill. That happens to be the title of a book. Christopher Avery writes, "Becoming skilled at doing more with others may be the single most important thing you can do" to increase your value--regardless of your level of authority.
As work is increasingly broken down into team-sized increments, Avery's argument goes, blaming a "bad team" for one's difficulties is, by definition, a personal failure, since the very notion of teamwork implies a shared responsibility. You can't control other people's behavior, but you can control your own. Which means that there is an "I" in team after all. (Especially in France, where they spell it equipe.)
Yet this is not the selfish "I" that got so much attention during the "me" decade; it's the affiliatory "I" that built America's churches and fought its wars. Neil Armstrong didn't get to the moon through rugged individualism; there is no such thing as a self-made astronaut. "Men work together," wrote Robert Frost, "whether they work together or apart."
Here's both the problem and the promise of cooperation. Humans aren't hard-wired to succeed or fail at it. We can go either way. In her study of groupwork in school classrooms, the late Stanford sociologist Elizabeth Cohen found that if kids are simply put into teams and told to solve a problem, the typical result is one kid dominating and others looking totally disengaged.
But if teachers take the time to establish norms - roles, goals, etc. - "not only will [the children] behave according to the new norms, but they will enforce rules on other group members." Perhaps to a fault. "Even very young students," Cohen wrote, "can be heard lecturing to other members of the group on how they ought to be behaving."
Economists have long assumed that success boils down to personal incentives. We'll cooperate if it's in our self-interest, and we won't if it's not. Then a team of researchers led by Linnda Caporael thought to ask: Would people cooperate without any incentives? The answer was - gasp! - yes, under the right conditions. Participants often cited "group welfare" as motivation.
To economists, shocking. To anyone who's been part of a successful team, not shocking at all. Life's richest experiences often happen in concert with others - your garage band, your wedding, tobogganing. The boss who assumes that workers' interests are purely mercenary will end up with a group of mercenaries.
No battery of team exercises can fix that situation - especially if they involve spanking your colleagues with yard signs. When a sales office of a home-security company, Alarm One, adopted that practice, a 53-year-old employee later sued for emotional distress. (A jury awarded her $1.2 million in April.)
Again, let the greats show the way. During a public appearance in 2000, an A-Team cast member was asked by a fan to name his favorite co-star. "Listen," Mr. T responded. "That's wrong for me to pick a favorite, because I'm a team player and we were a team. Remember, they say" - here it comes again - "there's no 'I' in team." No, but there is a "T." And pity the fool who forgets it.
Friday, December 29, 2006
FORTUNE Magazine: How one CEO learned to fly
How one CEO learned to fly
Boeing chief James McNerney has now made his mark at three major companies. How? "Help others get better," he says.
NEW YORK (Fortune) -- It's tough to find an executive who has delivered top performance across as wide a swath of business as Boeing (Charts) CEO W. James McNerney. In a 19-year career at General Electric (Charts), he ran GE's Asian operations, its light bulb business and its jet engine business, among others - performing so well that he was a finalist to succeed CEO Jack Welch in late 2000. When he didn't get that job, 3M (Charts) recruited him almost instantly to be CEO; the stock rose 34 percent on his watch. He left 3M to become Boeing's chief in mid-2005, and since then the stock is up 30 percent.
McNerney, 57, spoke recently with Fortune's Geoffrey Colvin about the importance of his father and Jack Welch, how he helps people who work for him grow, why he admires Steve Jobs and much else.
Most people in business and other fields develop for a while and then stop, but a small minority keep getting better for years. Are you conscious of continually trying to develop and improve?
I start with people's growth, my own growth included. I don't start with the company's strategy or products. I start with people's growth because I believe that if the people who are running and participating in a company grow, then the company's growth will in many respects take care of itself.
I have this idea in my mind - all of us get 15 percent better every year. Usually that means your ability to lead, and that's all about your ability to chart the course for [your employees], to inspire them to reach for performance - the values you bring to the job, with a focus on the courage to do the right thing. I tend to think about this in terms of helping others get better. I view myself as a value-added facilitator here more than as someone who's crashing through the waves on the bridge of a frigate.
What have you observed about those who grow and those who don't? Can you tell in advance who they'll be?
No, you can't always tell in advance. It generally gets down to a very personal level - openness to change, courage to change, hard work, teamwork. What I do is figure out how to unlock that in people, because most people have that inside them. But they [often] get trapped in a bureaucratic environment where they've been beaten about the head and shoulders. That makes their job narrower and narrower, so they're no longer connected to the company's mission - they're a cog in some manager's machine.
Do you come across people who think there are some abilities they just don't have in them - think they're simply not constituted to do certain things?
That's a question I think about a lot. Where I've finally landed on that issue is this: The things you expect of people have to be so fundamental that they're independent of people's style, culture ... their function.
So when we talk about the ability to chart the course for yourself and the people you work with, to expect a lot and inspire people, to have the right values, to find a way and deliver results - these are pretty fundamental things. Whether you're an individual contributor in a lab in a far-off place or leading thousands of people in a major services organization, they all apply. And they're compatible with an individual's personality and background.
Before 3M and Boeing, you worked at three of the most famous management-development organizations in the world - Procter & Gamble, McKinsey and GE. Were you trying to put together experiences that would complement one another and make you a more complete business person?
I was conscious of it. I was fortunate to grow up at GE, where that automatically happens to people who are doing well. But if it had not happened to me, I would have raised my hand - because you do need to see more than one thing. It increases your ability to analogize when you see different situations, increases your self-confidence, your situational awareness.
What experiences from your past were most important in your development?
Being GE's Asia leader. I saw the company from the outside in. Jack [Welch] gave me no blueprint, just said, "Asia is the biggest opportunity we've got, and we're not doing much - go figure it out." Tremendously valuable. Another thing I would cite is just working for Welch. He was a hell of a leader - both tough and inspirational. The 3M experience was also a great experience - a group of great people who needed a rejuvenation. A pure leadership challenge.
Besides Welch, which people were most important in your development?
I was lucky to have a great dad. He was a professor and a business leader [CEO of Blue Cross Blue Shield Associations], and he had the Welch characteristic - fearlessness about change, fun with change.
I tend to be inspired by pieces of people. Look at Steve Jobs and his ability to commercialize innovation. That was the struggle at 3M - there's lots of innovation at the company, but how is it commercialized sustainably? That guy is the best I've known at that, and I have enormous respect for his ability to commercialize innovation.
Research finds that great performers in any field tended to receive a lot of early encouragement from their parents.
There was no question that in our house doing well, doing it the right way, school, sports - there was an expectation. One of the things I've taken away from that is that I'm unafraid to expect a fair amount from people. It makes them so much better - you're doing them a disservice if you don't.
I think some of the saddest things in the world are when you don't expect enough from your children. All of sudden they're 21, and they have lower standards than if you'd taken a tougher, higher, bumpier road with them. I pulled that from my father. It probably made me, as my wife tells me, a little overfocused, a little insensitive, a little too goal-oriented, but that's part of the package.
People often draw parallels between sports and other fields. You were enthusiastic about sports - do you see those parallels?
No question, though it's almost trite to say it these days. My sports were team sports, ice hockey and baseball. The whole team dynamic is similar in business. Leadership is earned - the captain earns that role; it's not because he's the coach's son. These are all things we know, but in today's world it's not a bad idea to remind ourselves. When companies lose their way, they lose their way on these fundamental issues of leadership.
Continually pushing oneself to improve is difficult and even painful, and it's largely a mystery why some people do it and others don't. Have you developed any views about that?
[Long pause.] That is such a great question. I do know that there's a restlessness in some people. Go back to Welch. What happened yesterday didn't matter. What happens tomorrow is the only thing that matters, and that's an everyday occurrence.
I don't know if it comes from the toilet training, if your parents do expect a lot of you and you're always restlessly trying to grow and meet their expectations. That's a component. Another is that success and achievement can feed on themselves. It feels good to keep succeeding. It feels great to see the people you work with grow and achieve.
Maybe the ignition happens when you're younger, and then it feeds on itself. The next question is how you give it to people who weren't fortunate enough to have it given to them when they were young. It gets back to leadership attributes - expect a lot, inspire people, ask them to take the values that are important to them at home or at church and bring them to work.
Do those personal issues apply to a whole company?
Yes, institutionally, the ability to be agile enough is the gut issue in leading an organization today. You need a clear-eyed view of what's really happening in your marketplace and with your competition, of what you're really good at and not good at, which has probably changed over the past ten years. How you lead people in a way that makes them feel good about that, because it means job dislocation - that's the gut issue. If you can develop a team with the personal characteristics we talked about, how does that get institutionalized? That's the leadership challenge we're wrestling with at Boeing, and we're bound and determined to get it right.
FORTUNE Magazine: The GE Mystique
The GE Mystique
General Electric matters--but don't just take FORTUNE'S word for it. We asked seven management experts, including four former GE stars, what makes America's most admired company stand out.
Excerpts
GE has set a standard in leadership development in a way that all of us have benefited from. It has also set a standard in candor--that is, dealing with reality and rigor in communicating around the company. Everybody has a real chance to know exactly where they are.
GE is the best school of management in the world bar none.
People love being part of GE. It's like the highest state of being. One reason is that GE really is a meritocracy. It really does reward those who deliver. Everybody sees that it is the most successful people who are getting ahead. That inspires people to stay.
People like working for a company where it's all about them, and about making them as successful as they can be.
It's that obsession with people that requires all GE leaders to spend a huge amount of their time on human resources processes--recruiting, reviewing, tracking, training, mentoring, succession planning.
/Excerpts
(FORTUNE Magazine) - Kevin Rollins CEO of Dell
GE is a major customer of Dell (Research).
About three years ago Michael Dell and I met with GE (Research) management and discussed their leadership development programs. We knew that at Dell we were not growing our own leaders fast enough. We were having to hire from outside--and that demoralized our internal folks.
We wanted to study GE's model. So we sent an executive to go through the GE training program, then created a course tailored for our people. It has worked amazingly well. We have maybe 15 or 20 people in each course, once a year. They're taken offsite for two weeks and are immersed; it's all executive-taught. They come away with renewed energy to be a great leader but also renewed appreciation for the fact that Dell wants them to do well. Michael and I have spent a ton of time out there.
What makes GE the gold standard is the consistency of performance over a very prolonged period. I'm sure Jeff Immelt's pulled his hair out many times when people want to know what it was like to work with Jack Welch; and what's he doing that's like Jack Welch; and Jack Welch, Jack Welch, Jack Welch. But Jeff's a great leader and businessman in his own right.
Kevin Sharer CEO of AMGEN
Worked at GE from 1984 to 1989, as a corporate strategist with Jack Welch and as CEO of the Americom satellite broadcasting unit.
GE has set a standard in leadership development in a way that all of us have benefited from. It has also set a standard in candor--that is, dealing with reality and rigor in communicating around the company. Everybody has a real chance to know exactly where they are. There is no puffery. That is buttressed by rigorous, fact-based, honest assessment of the business situation. There isn't an ounce of denial in the place.
In addition, there's a real pride in being part of GE--a common sense of purpose. It's well known but still worth noting that the operations and financial promises are not "we'll give it our best shot" kind of promises. They're really sacrosanct. Finally, GE is aggressive. They think big and they take risks.
GE has been able to display these characteristics over decades, over CEO transitions, through business cycles. I think the sticking power of the place is a large part of why it's so admired. GE is able to just do it again and again.
Clay Christensen Professor, Harvard Business School
Author, The Innovator's Dilemma (1997).
GE is the best school of management in the world bar none. As innovators, though, I don't admire them very much. They have gotten new growth businesses through acquisition, but in terms of internally generated growth engines, they have not been famous for that in the last ten years.
The advantage of a GE-type structure is that every business unit has a finite life. A single monolithic business unit has a very hard time sustaining itself. But if you can create new growth within the corporate umbrella, then the corporation can sustain its prosperity even though the individual business units are dying. The major growth engine at GE has been GE Capital, which has disrupted the traditional banking structure. So it's been a great growth engine. But the fact that it's been a great growth engine in the past means it likely won't be in the future. That's my biggest worry for GE. I don't see a new engine of growth that's comparable to what they've enjoyed in the past.
One challenge is that the bigger a business gets, the less and less interest it has in small opportunities. And all the big growth markets of tomorrow are small today. I look at GE and the result of the past success is that their business units are now huge. So in theory, they can keep the growth going, but I think they'd have to slice the business up again. I've heard nothing about the awareness of the need to do that.
Chris Kearney CEO of SPX
Senior counsel at GE's plastics business from 1988 to 1995.
I went from BorgWarner to GE. BorgWarner was a conservative, well-run company with a history of solid operating performance. Being thrust from that culture into GE was like the scene in The Wizard of Oz where it turns from black and white to color. Your eyes open to a totally different way of thinking and challenging yourself and the organization. I felt I was working with some of the best and brightest businesspeople on the planet.
There's a lot of GE DNA that runs through SPX (Research), with GE people in key positions. What I've attempted to do is to create the sense of empowerment and lack of boundaries I felt at GE. Jack Welch challenged people not to grow incrementally but to create new markets. I've used that phrase here. Last year I was in China visiting one of our smaller businesses that makes home and commercial heating products. I was sitting in this room in this little factory, and they had the shades pulled and the projector on, and they were doing this slide presentation, talking about how many more products they were going to make in China to send to the U.S. I looked at them and said, "You guys need to get up and pull the shades and look out the window. There's a world exploding right here in your own backyard."
That's something ingrained in me from my GE Plastics days--to look at the world differently and figure out what you're not doing.
Shelly Lazarus CEO of Ogilvy & Mather Worldwide
GE board member since 2000.
I remember once, early on in my time on the board, Jeff Immelt was talking about an acquisition. He said now what they had to do was to "GE-ize" it. Everybody in the company knows what that means. To be able to attract talent--that's only the starting point--then to develop it so they have a pick of leaders who all believe in a common cause and are proud to be part of the institution. I think that is the magic.
People love being part of GE. It's like the highest state of being. One reason is that GE really is a meritocracy. It really does reward those who deliver. Everybody sees that it is the most successful people who are getting ahead. That inspires people to stay. It's a virtuous circle. The fact that the rest of the world also looks at GE and says, "My God, they are so successful, what a glorious company"--it just sort of feeds the sense of pride and belief insiders have to start with.
GE leadership spends a great deal of time thinking about people. That's not common. The head of HR comes to our board meetings because he is considered so crucial. People like working for a company where it's all about them, and about making them as successful as they can be.
Larry Johnston CEO of Albertson's (Research)
President and CEO of GE Appliances from 1991 to 2001.
GE's 100-year-plus track record is simply about having the very best people at every single position. That is its No. 1 core competency. No one has better people. No one else's bench strength comes even close. It's that obsession with people that requires all GE leaders to spend a huge amount of their time on human resources processes--recruiting, reviewing, tracking, training, mentoring, succession planning. When I was at GE, I spent over half of my time on people-related issues. When you get the best people, you don't have to worry as much about the execution, because they make it happen.
Another secret that keeps GE ticking is the culture of lifelong learning at the personal level and the concept of always trying to make everything better at the business level. The philosophy is that there is an infinite capacity to improve. Even if you're the best, you can get better. The real winners never stop wanting to get better.
At GE, a thirst exists to search out best practices. That "not invented here" syndrome just doesn't exist there. When I was in the appliance business, we learned a way to improve inventory processes from a tiny company in New Zealand. We ended up rolling it out across the entire company. It was a multibillion-dollar idea. It wasn't something we invented, but our people were constantly on the lookout for those kinds of ideas. That sets GE apart.
Noel Tichy Director, Global Leadership Program, University of Michigan Business School
Head of GE's Crotonville leadership development program from 1985 to 1987.
Jeff Immelt took over in 2001 with a 20-year run ahead of him. That was a tough time--the end of the bubble, 9/11, corporate scandals. He has been abe to look at the situation he is in and zero-base GE. What do we keep? What don't we keep? Jeff's answer was to propose a new set of values--imagine, solve, build, and lead. These fit with his agenda of moving into whole new sets of businesses, from energy to customized medicine. Jeff is doing what his predecessors did before him: transforming GE to fit tomorrow's world.
The stock price often takes a while to catch up to what GE is doing. The Most Admired survey may be a leading indicator; it appears to recognize that this guy--in terms of technology, globalization, and initiatives like eco-imagination and recommitment to GE's R&D tradition--has turned the dial up considerably.
I talk to a lot of CEOs, and they watch Jeff very carefully. He's also a very easy human being to hang out with.
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