CASE STUDY

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Aon Hewitt Top Companies for Leaders is one of the market’s most comprehen-sive global research stud-ies on leadership, offering

cutting-edge insights on the fundamental and innovative lead-ership and talent practices of top-performing organizations. In 2011, General Electric Company ranked 11th on the list of global winners.

In 2014, it hit No. 1.It takes a lot for a company

with more than 300,000 employ-ees worldwide to change course so comprehensively in so little time, but GE has done it, says Lorraine Stomski, global lead for Leader-ship and Assessment, Aon Hewitt. “They really have reimagined not just the products and solutions they offer in the market, but how to structure themselves in a learn-ing and development perspective to help employees be the best leaders they can,” Stomski says.

“Aon Hewitt says three things make a good leader: self-awareness, resilience, and being engaged and

engaging,” says Jessie Leisten, consultant, Insights & Inno-vations Talent Practice, Aon Hewitt, and top global project director for the Top Companies survey. “GE checks off all those boxes. They reflected on how they do leadership strategy, and now they’re back at the top.”

For a company that has always prided itself on leadership as a key differentiator, coming in 11th in 2011 was just one more sign that GE needed to make significant changes in the wake of the Great Recession, says Raghu Krishnamoorthy, GE’s vice president of Executive Develop-ment and chief learning officer. “We saw [raising] the ranking as a con-sequence, not an objective,” he says. “We had to re-engineer the entire organization, and that required our whole philosophy to change.”

Three Pillars of Cultural Transformation“GE is going through a trans-formation to become a faster, more agile and more flexible,

customer-centric organization,” explains Janice L. Semper, man-ager, Executive Development at GE, and one of the principal architects of the company’s culture change efforts. “We call it simpli-fication, but it’s more than just weeding out management layers and re-engineering processes. It essentially means, how does an organization with a global pres-ence operate differently in a world that is both extremely dynamic and uncertain?”

GE changes its methods of nurturing leadership to fit into this broader initiative, which is based on three fundamental pillars.

The first is FastWorks, a set of tools, principles and behaviors based on lean startup methodology. GE uses FastWorks both internally

and externally to see problems from the customer’s perspective and test assumptions through rapid experimentation and iteration. “People are embracing the idea that making a mistake and learning from it is not failure,” Semper says. “You can use it to approach your work in anything you do.”

The second pillar is a set of redefined corporate values, known as the “GE Beliefs,” that capture the mindset behind this new way of working:

n Customers determine our success.

n Stay lean to go fast.n Learn and adapt to win.n Empower and inspire each

other.n Deliver results in an uncer-

tain world.

Imagining ChangeGE re-engineers itself to become the Top Company for Leaders

“GE integrates its values into everything that touches talent, from who we bring in to how we develop people and assess their development,” Semper says. “We’ve just completed an interview guide for recruiters to help them bring in talent that’s already aligned to the GE Beliefs. We have detailed behavioral statements around each belief for our emerging, experienced and executive levels of leadership. We’ve created a new guide for our talent review process, which covers succession planning, to ensure it aligns with the beliefs. And our training programs are now based on the beliefs.”

The third pillar is an overhaul of GE’s performance manage-ment system. Instead of relying on traditional review meetings, it now

more closely resembles an ongoing conversation between managers and employees. Even the name has changed: Instead of performance management, it’s called perfor-mance development—suitable for an approach in which the manager is more a coach or facilitator and colleagues are encouraged to give each other feedback.

“Those who have responsibil-ity for others have to make sure they’re helping individuals connect their work to customers, priori-ties and outcomes,” Semper says. “We’re going in and surgically rewiring the central nervous sys-tem of the company to align with the vision.”

Reimagining Leadership TrainingIf the shift in corporate culture is a rewiring, Crotonville is the labo-ratory. Crotonville is a place—a 59-acre campus 40 miles north of

About General Electric

GE was founded in 1892 with the merger of Thomas Edison’s Edison General Electric Company and the Thomson-Houston Company, both prominent manufacturers of dynamos and electric lights. Today, with headquarters in Fairfield, Conn., GE has locations in more than 170 countries.

307,000 EMPLOYEES

$146 BILLION revenue in 2013

∑ LEFT Fostering personal discovery to connect “who you are” to “how you lead.”

∑∑ FAR LEFT Leaders debrief an improv session in Crotonville’s arts-based innovation lab.

A greater change involves shifts in the training regimen. In addition to case studies and workshops, trainees now study an emotional curriculum that includes analytical skills to help them synthesize data, design thinking skills to make their work more elegant and integrated, and mindfulness skills to stay calm amid chaos. Crotonville has also added jazz, improvisational theater, paint- ing, and other courses designed to help people learn to step out of their comfort zones and think adaptively. This is not your grandfather’s manage-ment training.

“When you need people to think differently, you have to invoke different skills and pull them in a different direction,”

Krishnamoorthy elaborates. “How do you train people in things like courage? I can’t say, here are four principles of courage, now go forth and be courageous. But I can have World War II veter-ans come in and talk to them about what it was like to land in Normandy on D-Day, then have them reflect on what it means to be under fire.”

The effects of this change have a global ripple effect. GE trains employees and customers at nearly 200 locations in 40 coun-tries, including learning centers in Munich, Shanghai, Bangalore, Abu Dhabi and Rio de Janeiro. It also offers leadership develop-ment programs in which talented employees rotate through assign-ments in different parts of the world and different functional areas. These multi-year programs

accelerate early career develop-ment and help uncover their skills and interests, effectively equipping emerging leaders to serve in the 175 countries where GE does business.

“Our leadership philosophy is that everyone is a leader, and the people in these programs are encouraged to operate at a higher level because they’re expected to,” Krishnamoorthy says. “They’re also expected to pay back by treating other leaders the same way, to bring them along in turn. That’s one of the qualities we look for when we promote people: ‘Show me who you’ve groomed as a leader.’” Ã

CONTACTS: Lorraine Stomski, lorraine.stomski@aonhewitt.com; Jessie Leisten, +1.847.442.4002, jessie.leisten@aonhewitt.com

New York City where GE holds executive meetings and conducts intensive training for employees with the most leadership potential. As Krishnamoorthy explains, “It’s a necessity to go to other training courses, but it’s a privilege to be invited to Crotonville.”

But Crotonville is also a con-cept, he adds: It’s the source of GE’s leadership thinking, a global ideal of performance, and a cata-lyst that enables the company to reimagine itself for the future. In so doing, Crotonville is also reimagining itself.

“Traditionally, trainees came to Crotonville and received a heavy dose of what GE wanted from them,” Krishnamoorthy says. “But as we hired increasing num-bers of millennial employees who are oriented toward social learning

Aon Hewitt Top Companies for Leaders®Launched in 2001, the Aon Hewitt Top Companies for Leaders survey explores and evaluates:

n How organizations assess, select, develop and reward leadersn How leadership strategies align with the execution of leadership practicesn What organization and cultural factors are fundamental to building and sustaining a strong leadership pipeline today and in the future

The resulting database contains insights from more than 2,300 organizations in 40 countries.

METHODOLOGY What sets the Top Companies for Leaders sur-vey apart is its methodology. Any company can take the initial ques-tionnaire to evaluate its programs and practices, then work with Aon Hewitt to understand the results and benchmark itself against top companies. Organizations that follow multiple best practices in leadership and talent development qualify for detailed interviews of C-suite and line executives that flesh out those best practices and the reasoning behind them. An independent panel of business and academic judges ranks the results.

HIGH PARTICIPATION For the 2014 survey, 74 percent of orga-nizations in North America—and about the same percentage globally—volunteered their CEOs to participate in interviews, says Jessie Leisten, top global project director for the Top Companies for Leaders Survey. She adds, “The high level of participation speaks as much to the CEOs’ dedication and commitment to talent development as it does to the credibility of the survey.”

Our leadership philosophy is that everyone is a leader, and the people in these programs are encouraged to operate at a higher level because they’re expected to. They’re also expected to pay back by treating other leaders the same way, to bring them along in turn.

“ and connectivity, we discovered that they need to be inspired to be retained. We realized we needed to curate their journey here, carefully plotting the experi-ences they go through so they leave with expanded horizons.”

That curation included changes to Crotonville’s physical campus. The White House, a bar where people traditionally met in the evenings, is now Café 56, a coffee shop and gathering place open all day for reflection and networking. An unused carriage house from 1900 has been repurposed as a kitchen-cum-dining-hall where teams can cook their own meals as a bonding activity. Monday night receptions and Wednesday night visits from food trucks serving international treats create new opportunities for interaction.

π BELOW The White House, one of the original buildings at Crotonville, is home to Café 56 and The Loft—unique, comfortable spaces where GE leaders collaborate and reflect.

∂ RIGHT Transformational learning experiences are designed to inspire participants to think, act and lead in new ways.

∑ LEFT The Crotonville leadership insti-tute was founded in 1956 to serve at the forefront of think-ing in leadership, culture, strategy and innovation. Some of GE’s best-known initiatives—Lean Six Sigma, WorkOut, Simplification, and FastWorks—took shape here.

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