Emerging markets like China and India are the new playground for companies like General Electric. Susan P Peters, Vice-president (executive development) and Chief Learning Officer, GE, believes India provides an ideal case study for lessons in leadership. In an interview with Vikram Johri, she shares her views on the Indian market, how GE weathered the recession, and what strategies the company is deploying to locate and retain talent.
How does the human capital landscape look globally, and in India?
The truth is, really outstanding talent, anywhere in the world, is always difficult to find, to attract and then to retain, because those are the people that everybody wants. When we talk about the war for talent, we are really talking about this subset of the population that everybody’s going after. The talent landscape, historically and today, tends to be differentiated as you look for people best suited to a particular business. India, on top of that, adds a multiplier effect, because the country is growing at 7.5 per cent. There are so many opportunities here that the best talent has many choices. So, the talent landscape is competitive for the best everywhere, but even more so in India.
And that’s true for China as well…
Yes, that’s true for China as well. China has already gone through the initial growth phase. If you were to say that China has had the first wave, then India at the moment is undergoing a tsunami of opportunities. India and China are for us two economies that we pay a lot of attention to, relative to understanding our current talent, the pipeline of their opportunities and their movement in the company, and then external talent.
Speaking of the talent market on the whole, do you think companies are finding it easier to locate talent now than in the past?
I think this is very different across the world. It’s a little tight right now in the developed economies. The markets have slowed dramatically, there has been what many of us have called an economic reset, and, therefore, many employees have chosen to stay put. In India, on the other hand, the economic reset has been only marginal — in areas like financial services and manufacturing — but for the most part it’s been continuous growth. Attrition data in the developing markets is still high, but it went way down in the developed markets.
Having said that, our retention strategy should have very little to do with what is happening in the market. It should be about providing people with interesting, challenging opportunities; the chance to work with peers, managers and leaders that they respect and like; and the belief that they will continue to grow. That’s what retains people in any market.
How does GE use internal mechanisms such as the Crotonville facility and Session C programme to retain talent? What benefits accrue from these programmes over the long term?
We think about development in a very broad way. Session C and Crotonville are really the underpinnings of our development strategy. Many people think about development as providing training and getting people to go to courses, which is a part of the Crotonville facility, but we also think about development in terms of the kinds of experience you get every day that will give you breadth and take you out of your comfort zone. That is the kind of stuff we think about in Session C. Crotonville and Session C, I would say, are like bookends to development. Through Session C we take a look at all the individuals in the company; and GE has over 150,000 professionals all over the world, more than half of them based outside the US. Employees fill out a form online in which they articulate their goals, their leadership qualities and capabilities. So we are looking at what the employee has done and how he has done it. Every one of those employees will then have a one-on-one review with the manager and the manager’s manager. We then ask if the employee needs more exposure to, say, strategic initiatives, and that helps the employee develop day after day. We give the manager coaching on how to have those discussions with the employee.
The other side of that bookend is the actual physical training that happens through Crotonville; and when we say Crotonville, we refer not only to the place in New York where the programme is based, but also the term that we use for all internal leadership training. For example, we do a lot of Crotonville training here in India, in Germany, in West Asia and so on.
The concept of forced ranking, which was very popular under Jack Welch, seems to have diluted under Jeff Immelt. Is that because it didn’t work over the long term?
I would say if you don’t evolve your performance management practices, they tend to get stale. So, a part of phasing out forced rankings was just a natural progression in performance management. Also, when we used forced rankings in the 1990s and early 2000s, we realised over time that it became too simplistic and enabled judgement to be not used that much in the process. We were forced to put people in certain boxes or numbers, and you, as a leader, sometimes did that even when you judged people to be different. And we pay you as a leader to apply judgement, to understand nuances, the grey in people. So, around 2004, we moved to more general guidelines, and subsequently, we said what we care about is performance, which is what you do, and your values, which is how you do it. Those are the two parameters we seek feedback on, and that is where we are today.
Apart from this, how else did the functioning of human resources evolve after the change of guard at GE?
The fundamentals at a company like GE really stand on their own and have little to do with who the leader is. The functional capabilities are very well-established — processes such as Crotonville and Session C. Having said that, I would say that over the last decade, there is a greater stress on how an individual is leading and growing the organisation, and there has been an emphasis on globalisation and the pipeline of global talent.
What lessons did GE learn from the slowdown?
After the fall of Lehman Brothers in mid-September 2008, for the first six months or so, it was a very rocky road. There were several learnings from that experience. We had the chance to relook at everything, and we did. Are our processes too complicated? Do we have enough pre-testing as opposed to post-mortems? So, what we did, through the Session C, is come to the realisation that the financial reset has implications on the financial front but also for leadership. We spent the spring of 2009 articulating who is a 21st-century leader? What do they have to be that’s different from earlier leaders? We did several things. We invited an eclectic group of outside thinkers at our corporate headquarters in June of last year — academics, historians, futurists — and we discussed leadership in terms of how it has been historically, and how it is today. And we came to the conclusion that many attributes of leadership have stood the test of time, but the context through which leadership is done today is actually different. It’s not just the financial reset, it’s globalisation, communication, the interconnectedness of the world. We had 30 attendees of the Crotonville course — very senior managers — go to a 100 different institutions around the world during the month of September. These were academic institutions, think tanks and companies, and the discussions centred on what is critical for leadership in this environment. We took all these inputs and we are in the early stages of articulating what attributes our leaders need to survive today. As an example, we feel that leaders today have to be much more comfortable with ambiguity. Leaders need to accommodate multiple constituents, that is, not just shareholder value but the community implications of a business. Typically, leaders dealt with one dimension, but a complex market like India is a great example of how leadership is not just about business results, but how those results might improve community and infrastructure in India. So, these are the things we are building into our leadership curriculum.
Immelt has spoken about the shift from globalisation to reverse innovation. What role do you see emerging markets play in GE’s growth strategy?
As everyone knows, you used to innovate for the developed markets and then de-feature for the emerging markets. But with reverse innovation, it’s the other way round — use the talent and skills of emerging markets to develop products that can then be made available globally. We have already made some announcements on the reverse innovation we have done in our healthcare business. The Mac 400 electrocardiogram machine, which was developed in India at a price point that made sense based on Indian dynamics and market needs, is now available not just here but in a multiple of other markets including developed markets. This is the first example of many that will come. We will use the depth of engineering talent that is available in India to produce not just parts of a system but entire products. And we hope to achieve that by bringing all our India businesses under one reporting relationship, that is, the new President and CEO of GE India, John Flannery.
