GE Capital The evolution of leadership: How GE links leadership to strategy

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1 The evolution of leadership: How GE links leadership to strategy viewpoint

2 The evolution of leadership: How GE links leadership to strategy In the more than 130 years GE has been in business, the economic climate has changed more than a few times. There have been booms and busts, new competition, major policy shifts, and game-changing innovations. And many of these changes presented us with new challenges and opportunities, necessitating strategic adjustments along the way. During these times, we ve also found it important to revisit the mix of leadership capabilities the company needs to thrive, mapping them closely to our evolving strategy and culture. We do this by regularly evaluating our leadership expectations within the context of our strategic goals, aligning what we do as a company with how we do it. We believe that this process gives leaders throughout GE a clear understanding of the leadership capabilities required of them. And we believe this clarity of purpose has led to GE s success in developing leaders that sustain our integrity, stability, and profitability. The evolution of leadership: How GE links leadership to strategy viewpoint 2

3 We have always believed that building strong leaders is a strategic imperative. When times are easy, leadership can be taken for granted. When the world is turbulent, you appreciate great people. Jeff Immelt, Chairman and CEO, GE Strong leadership is an important ingredient for any company, in any industry, under any market conditions. Good leaders provide employees with direction, motivation, pride, and a sense of purpose. They communicate confidence to the market and strength to competitors. And when aligned with the company s strategy, strong leadership can mean the difference between success and failure. Because no two companies are the same, however, there can be many different definitions of leadership. Every company has different strategic objectives that may change as markets or the economy shifts, and a unique workforce that responds to a different mix of incentives. And because of this, defining the exact leadership capabilities needed to succeed can be hugely challenging. That s why GE invests in understanding the leadership skills, capabilities, and values needed to drive success at any given time. The way we do this is by periodically redefining leadership within the company by identifying the specific leadership qualities that align with our corporate culture, values, and strategy. We believe that this process contributes in part to GE s global reputation as one of the best companies in the world at developing leaders. And we believe that this process, or one like it, can help all companies cultivate the leadership capabilities they need to succeed. Changing times, changing capabilities Leadership is something that is expected, to varying extents, from all GE employees. We enable this by telling people what s expected, helping them to get there, and holding them accountable. In this way, leadership, both inside and outside the company, is part of our corporate culture. But in today s global business environment, things change quickly. To stay a leader, we too must change quickly. Businesses reevaluate their strategy, their technology, and their talent in response to shifting markets, says Susan Peters, GE s Chief Learning Officer. It s the same thing with leadership. To continually provide our leaders with a clear set of behavioral expectations under these changing conditions, we periodically review the key leadership capabilities that map to our culture and our strategy. For example, in 2009 we embarked on one of our most comprehensive reviews of modern leadership to date. We gathered points of view from all over the globe from inside GE and from some of the world s most respected organizations. Internally, we conducted focus groups and dialogues with our existing leaders at all levels. We asked what makes a successful leader in the current environment, what things work, and what things don t. Externally, we sent 35 of our senior executives across the world to gather points of view on how leadership was changing in response to today s business conditions and global trends. We met with more than 100 organizations, including multinational companies, small start-ups, universities, and military institutions. And we listened to every point of view, reviewed perspectives, and compared them to our existing culture and the strategic direction of our company. Redefining the capabilities that matter Through this process of gathering perspectives and insights, themes began to take shape. And within those themes, capabilities and behaviors started to emerge. When defining our leadership expectations, we purposefully avoid using personality traits. We do this because we believe that while some are born leaders, leadership can also be taught. And if we are to train the next generation of leaders from within GE, and continue to train our current leaders, we must know the capabilities, not the personalities, they need in order to be successful. The evolution of leadership: How GE links leadership to strategy viewpoint 3

4 Through this work we discovered that in today s GE, and for today s global, transparent economic environment, our values and leadership capabilities are indistinguishable. They are one and the same. And they are embodied by what we identified as our Growth Values: Clear Thinker Inclusiveness External Focus: Is in tune with customers and environment, connects with stakeholders, and is educated on global issues Clear Thinker: Embraces and adapts to uncertainty, connects strategy to purpose and inspires, uses knowledge and instinct decisively, and hits commitments Imagination & Courage: Generates innovative ideas, takes risks and learns from success and failure, and challenges bureaucracy Inclusiveness: Welcomes ideas, listens and is humble, collaborates with respect to individuals and cultures, and drives engagement Expertise: Has domain expertise, continuously develops self and others, and leverages technology Always with unyielding integrity These Growth Values reflect GE s strategic aspirations and expectations for organic business growth. And they describe the way in which GE believes that growth can be attained. They are the corporate values that we reinforce in many ways throughout the company, but they are also quite clearly the capabilities that we expect all leaders to demonstrate through their words and actions. How often a company revisits its values and leadership capabilities depends on the size of the company, its growth trajectory, and how quickly the market conditions are changing. Some companies may want to tie the refresh cycle to their strategy cycle, which is often five years. And some start-ups in accelerated or growth markets may want to review their leadership requirements even more often. The important thing is not to let the defined leadership capabilities fall out of alignment with corporate strategy or the needs of the market and workforce. Integrating leadership throughout the company After leadership capabilities are established, it s important that everyone within the organization understand them, and put them into practice. We believe that posting them in a conference room or sending out a company-wide is not enough. So GE integrates the Growth Values and the leadership expectations into every aspect of the company, from operations to performance reviews to training. Of course, leadership roles within the company vary widely. So each Growth Value has a set of behaviors that define expectations for various levels of leaders throughout the company. These behaviors are included in our performance reviews. This is part of GE s belief that all of our employees should be measured not only by what they do, but also by how they do it. In addition, GE embeds the Growth Values into every class taught at Crotonville, the company s leadership institute. This ensures that as we teach leadership, we are reinforcing our Growth Values and building the capabilities of our leaders to demonstrate these behaviors. Leading change For any company, evolving macroeconomic forces, shifting global objectives, and changing market conditions will require adjustments in business strategy, which will in turn require that leadership skills evolve. And knowing the exact skills your organization needs at any time is critical to the success of your company. At GE, we align leadership development closely with strategy. And we do this by regularly revisiting the leadership capabilities we need to achieve our goals and integrating them throughout the organization. The process that GE uses to define our values and leadership expectations helps our leaders understand and articulate our strategic vision. And it gives them a roadmap for how to drive it to completion. Without it, leadership approaches throughout the company would vary widely, and potentially fall out of alignment with our strategy and our values. And that s why GE doesn t leave leadership to chance. The evolution of leadership: How GE links leadership to strategy viewpoint 4

5 GE Capital (NYSE: GE) works on things that matter. GE Capital offers businesses and consumers around the globe an array of financial products and services. Providing more than money, GE Capital brings insight, knowledge and expertise to every loan and lease. Not just banking. Building. For more information, visit or follow company news via Twitter Copyright 2012 General Electric Capital Corporation. All rights reserved. This publication provides general information and should not be used or taken as business, financial, tax, accounting, legal or other advice. It has been prepared without regard to the circumstances and objectives of anyone who may review it; therefore, you should not rely on this publication in place of expert advice or the exercise of your independent judgment. The views expressed in this publication reflect those of the authors and contributors and not necessarily the views of General Electric Capital Corporation or any of its affiliates (together, GE ). GE does not guarantee that the information contained in this publication is reliable, accurate, complete or current, and GE assumes no responsibility to update or amend the publication. GE makes no representation or warranties of any kind whatsoever regarding the contents of this publication, and accepts no liability of any kind for any loss or harm arising from the use of the information contained in this publication. GE, General Electric Company, General Electric, General Electric Capital Corporation, the GE Logo, and various other marks and logos used in this publication are registered trademarks, trade names and service marks of General Electric Company. You may not use, reproduce, or redistribute this publication, any part of this publication, or any trademark or trade name without the written permission of GE. The evolution of leadership: How GE links leadership to strategy viewpoint 5