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GE Opens the Doors to Crotonville

The conglomerate recently allowed the media a rare chance to tour its famed management-development center in Crotonville, N.Y., in hopes of dispelling what it believes are misperceptions about how it develops its people.

Monday, November 23, 2009
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The stated purpose of the event was to give journalists an "inside look at how GE develops leaders." And an inside look was certainly provided earlier this month, as members of the media toured General Electric's famed leadership-development campus in Crotonville, N.Y., sat in on classes and queried GE leaders about their experiences. 

Nestled in the sylvan hills of upper Westchester County, with spectacular views of the Hudson Valley, the sprawling 59-acre campus includes two classroom buildings; a dormitory containing 188 rooms, a dining facility, a 4,000-square-foot fully equipped gym and meeting areas; and a converted farmhouse known informally as the "White House," which is used for after-hours socializing by attendees.

Of the 9,000 or so mostly manager-level and above people who attend courses at Crotonville each year, all but a handful -- about 250 -- are GE employees, says Sue Peters, GE's vice president of executive development and chief learning officer. The non-GE'ers usually work for GE customers.

Despite the economy, more employees than ever are cycling through Crotonville -- so many that the dormitory is routinely overbooked, forcing GE to accommodate the overflow at a nearby Marriott, she says.

Peters kicked off the media day by discussing GE's efforts to prepare its managers for dealing with what she described as a "reset" post-financial-crisis world, although the crisis wasn't the only impetus, she added.

"Even if the meltdown hadn't occurred, there's still so much going on in the world, in terms of technology-related developments and changing modes of communication, that we felt we needed to take another look at leadership development," said Peters.

The recession hasn't been kind to the Fairfield, Conn.-based conglomerate. Its GE Capital unit suffered big losses amid the financial meltdown; meanwhile, the company was forced to lay off nearly 30,000 of its 330,000 employees worldwide. GE's stock price has lost roughly half its value since 2007.

GE recently convened a group of well-known writers, professors and consultants at Crotonville to meet with the company's senior leaders, including Chairman and CEO Jeffrey Immelt, to discuss the challenges of what it calls "21st Century Leadership." The group included historian and bestselling author Doris Kearns Goodwin, who spoke about Abraham Lincoln's ability to cope with extreme pressure, and a futurist who discussed the commonalities between the leadership styles of Mother Teresa and ... Adolf Hitler.

"They were extremely different examples, obviously, but [the futurist] noted how they were both passionate in the pursuit of their vision and were such able communicators that they could get otherwise disinterested parties to follow them," said Peters.

GE is now at the point where it's putting together a standard against which to measure its managers on 21st century leadership, she said, with core competencies such as "big thinker, develops self and others, globalist, listener, communicator [and] networker."

At the same time, GE wants to clear up what Peters said are misperceptions about how the company develops its people, among them that forced ranking, or "rank and yank" -- the practice, popularized by former CEO Jack Welch, of ranking employees into groups based on their performance and then removing the lowest-performing group from the organization -- continues to be GE's primary method of performance management.

"There's a lot of misunderstanding of how we evaluate people here at GE," said Peters. "We do not force people into a box."

Jay Ireland, CEO of GE Asset Management, who spoke about his experiences at Crotonville, noted that "everyone thinks GE is like the U.S. Army, that it's an 'If you don't do this, you're out!' kind of environment.

"In fact, you're allowed to make mistakes here, as long as you demonstrate that you're learning from them," he said. "Outsiders don't realize how much time we spend on our people here, developing them and working with them."

GE offers a number of courses at Crotonville for different levels of its leadership, said Peters, including a three-week business-management course offered three times a year, with each class consisting of approximately 50 up-and-coming executives.

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Each class focuses on solving business challenges; the current class is studying ways to use GE's new "Healthymagination" initiative to increase the success of the company's GE Healthcare division. Healthymagination is GE's effort to develop new health-related products and services, and identify best practices for improving health outcomes and reducing healthcare costs.

Course attendees, who come from GE business units around the world, spend their first week at Crotonville delving into leadership principles in seminar-style classes.

Media observers watched a class in which the first part of the morning was spent on attempts to invent new toys and games from a random collection of objects, including Legos and bottles of bubbles. The participants then broke into groups of three or four to discuss ways to become better listeners and communicators.

During the second week of the business-management course, the teams visit various GE locations around the world to talk to managers and employees about Healthymagination, said Peters. The third week is spent back at Crotonville, working in teams to develop Healthymagination-related products or services.

Attendee Kevin O'Neill, chief financial officer of GE Healthcare International, said the course is invaluable because it lets him have face-to-face interactions with colleagues he wouldn't otherwise meet.

"It's giving me the chance to reflect on my management style, learn from others and network," he said.

Bill Pelster, a principal and talent-development leader at Deloitte, says his company is modeling its own leadership-development efforts on GE's program.

Deloitte has just broken ground on "Deloitte University," which -- when completed in 2011 -- will be a 750,000-square-foot facility on 107 acres in Westlake, Texas, near Dallas, that will serve as the hub of the global consulting firm's leadership development efforts, much like Crotonville, he says. 

"The consensus is that, among publicly held companies, there's no one who does leadership development better than GE," he says. "They've built it into their corporate culture and it receives consistent attention from their top management, year in and year out."

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