Friday, April 24, 2009

GE's Track Record Churning out CEOs

General Electric has a tremendous record developing talent that goes on to lead other companies. Many CEOs have worked for GE at some point in their careers. This article about Bob Nardelli's troubles at Home Depot and Chrysler reminds us that not all GE executives go on to great success elsewhere. Some, such as Bill Anders or Larry Bossidy, enjoy a great deal of success. Others stumble. Why might some executives succeed while others do not? Here are a few theories:

1. The most effective executives may go to companies that resemble General Electric, i.e. large diversified conglomerates (while less successful executives may be trying to make the leap to companies that are quite different than GE (such as a retailer).

2. Some executives may have excelled at GE because of the support network that enabled their success. In other words, they did not excel at GE simply because of their own talent, but because of the people surrounding them and the culture/systems of GE that enabled their success. It is often hard to discern whether a star at GE is capable of excelling without the support network around them.

3. Some GE executives may have tried to transplant GE processes and systems without sufficient adaptation to their new company's industry, strategy, and culture. Others may have had more success because they engaged in more effective adjustments of the "GE way" to fit their new external and internal environment.

3 comments:

michaelburns.livegreen said...

Interesting article, the question that comes to mind is this a board issue or a CEO issue. Is the board responsible to ensure that the CEO is capable of and has the support system to succeed or is this an issue where as a potential CEO you need to evaluate the situation and determine if your corporate training will be suitable to allow you to succeed? I believe the answer is it requires both, but who should own a higher percentage of the blame and more importantly when making these type of decisions involving who or which style will have a greater chance of success what are the critical factors, corporate style or industry experience?

Michael Roberto said...

I think that many Boards become enamored with the thought of hiring a "superstar" from outside the company, particularly if their firm is struggling. They may not always think through some of these potential pitfalls as thoroughly as they should.

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