General Electric

Q1. Does GE’s human capital development strategy support its overall strategy? How?

GE leverages HR to its maximum degree by ensuring that HR staff are aware of GE’s overall business strategy and its finances, marketing, and operations so its selection of human capital will align with those goals. It is not simply enough to select capable people but the right kind of capable people that fit in with the overall organizational culture of GE. To achieve this objective requires extensive benchmarking of overall performance, and while GE operations may be decentralized, personnel are evaluated based upon strict standards, including manager evaluations, forecasting of their overall career plan, and succession planning to assume a seamless transition. When Jack Welch assumed the helm of the organization, he added additional requirements, such as requiring all managers to rate employees on a curve (which meant that even adequate performances might be classified as failures), as well as rating employees on how well they conformed to the overall organizational culture which drove GE’s strategy.
Q2. What advantages and challenges does GE have in pursuing this human capital strategy? Why is it able to be more effective in this approach than other firms (consider your own company as a comparison)?
GE’s approach focuses on building talent and promoting from within, after recruiting candidates from a very specific pool of applicants and schools. Given the importance of homogeneous organizational culture this makes sense for GE; the downside is this can create a silo mentality and limit diversity for the organization, including demographic diversity. For many other firms, particularly forward-thinking organizations such as Google and Facebook, such a strategy would not be fruitful, given that information and talent-focused organizations that derive their value from new ideas require outside input to thrive. Given the case study was written in 2006, the changes that have been fostered in recent years, particularly in the shift to online marketing and commerce, and the pace of change within business as a whole, suggests that the lessons of years ago are not applicable today.


References
Bartlett, C. & McLean, A. (2006).GE’s talent machine: The making of a CEO. Harvard Business
Case Study.