As the head of HR at GE, I wear many hats. To deliver for our investors, customers and employees, the most important responsibility I have is to help develop the leaders of GE throughout the organization – with a special focus on senior leaders. I have spent most of my career on leadership development and today we announced the most important project I’ve ever worked on… naming the next CEO of GE.
Jeff Immelt has been GE’s Chairman and CEO for 16 years. Over GE’s 125-year history we’ve had only 10 CEOs; an average tenure of 12.5 years. The average tenure of S&P 500 CEOs from 2001 to 2015 was 8.8 years. This is a big decision that will impact the course of GE for years to come. We have millions of investors and hundreds of thousands of employees looking to this leader.
The environment we work in today demands greater leadership. As I’ve written before, the most effective leaders are the ones who can operate across multiple contexts and turn apparent chaos into opportunity. This requires courage, grit, and resiliency. It was through that lens that we built our process and the Board made its decision. Like all big decisions at GE, we did our homework. To say our CEO succession process has been deliberate is an understatement. It has been 6 years in the making with relentless focus and discipline.
So how did we do it?
First, we knew it would take years to move potential candidates through the leadership roles that would develop them. We began intentional moves of key leaders to give them new, stretch experiences with ever increasing exposure to complexity.
By 2012, we wrote the job description and then continuously evolved it. We focused on the attributes, skills and experiences needed for the next CEO, based on everything we knew about the environment, the company’s strategy and culture. We did research; studying over 100 external leaders and articles to get the best understanding of the attributes needed today and in the future. We pulled our internal and external research together to create our “enterprise leadership capabilities,” a list of competencies essential for GE’s next great CEO. Our process reflected the recognition that CEO success is less about what they know going in and more about how fast they learn, experiences they have had, and their resilience.
Also in 2012, the GE Board observed internal candidates and evaluated both internal and external candidates against our key criteria, using multiple sources of data. Our data goes back years and includes candidates’ track-record of leading global businesses and functions, business performance stats, executive reviews, leadership qualities, and feedback from those with whom they worked. After thoughtful deliberation, the GE Board decided on internal succession as the best path forward. Our internal CEO candidates continued to be exposed to bigger, more complex roles that would test them as leaders and develop them for our biggest leadership jobs in the company, including CEO.
In 2013, the timing of the transition was carefully contemplated. We considered our business planning process, the portfolio transformation, and the appropriate period of overlap between the incoming CEO and outgoing Chairman and CEO. Four years ago, the GE Board and Jeff Immelt agreed on a target date of Summer of 2017 as the right time to make the CEO transition.
Our final step? Interviews. Over the past month, the GE Board heard directly from the candidates about how they view the CEO role and their vision for GE. The Board challenged candidates with difficult questions and listened deeply to their thinking. Questions posed included things such as:
What would your current leadership team say they most appreciate about how you lead them?
In John Flannery, our company’s next CEO, the GE Board has selected a life-long learner and a strong operator with global experience. He is someone who possesses the capabilities needed to lead, empower and inspire. Over 30-years with GE, John has shown that he thinks big, dives deep, and is both adaptive and resilient. One of John’s hallmarks is how he engages the people and teams he leads.
While today’s announcement marks change for GE, it is change that has been carefully considered and meticulously planned by the GE Board and Jeff Immelt for more than six years. I encourage you to take a look at the infographic, which provides a more detailed look at our planning process.
At the end of the day these decisions are about people and delivering results for shareholders. Jeff Immelt has been a phenomenal CEO and leader for our company and in this process. It has been a privilege to be part of something so significant, including the now important work of ensuring seamless transitions, business excellence, and growing the next generation of GE leaders to the benefit of our investors, customers, team, and world.
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