Has GE lost its leadership development mojo?

The cover story in the current Business Week asks a stunning question: “Can GE Still Manage?” There have been many stories over the last few years about today’s GE not performing like the GE of old, or at least the GE of Welch.

What makes this story stunning is that it doesn’t focus on stock price or the performance of various GE units. It doesn’t even suggest breaking up GE. Instead the question is about the one thing that seemed like a sure thing for GE: leadership development.

There’s a lot of history behind today’s leadership development at GE. The idea that GE’s most important product is leaders, not light bulbs or even progress, has been around since Charles Coffin at the turn of the Twentieth Century.

Two men are primarily responsible for the way GE does leadership development today. Jack Welch and Bill Conaty. Conaty was head of human resources at GE for thirteen years.

The crown jewel of the program is the leadership development campus at Crotonville, just up the Hudson from New York City and a 45-minute drive from GE headquarters in Connecticut. Nine thousand managers attend programs there every year.

The core process is “Session C.” That’s the rigorous annual review of the performance and potential of GE managers. Some writers call it “notorious.”

Today, Jeff Immelt thinks that GE needs to rethink both the critical skills for our changing world and the processes for developing leaders. So it’s time for a little creative destruction.

If there is a company with a track record of creative destruction, it’s GE. GE’s leaders from Coffin to Welch and now to Immelt have been willing to rip out legacy processes and structures, just about at the time when everyone else is adopting them.

The goal is to change the details while hanging on to two things that all companies who are good at leadership development seem to do. GE will probably continue to provide lots of training and lots of development opportunities. What will probably change are the frequency and delivery methods.

GE will probably also continue to make leadership development a priority for all managers. Develop yourself. Develop your subordinates. That takes lots of time and discipline, but it’s perhaps the only essential for effective leadership development.

Will GE succeed in changing a process that has been its strength for decades? “We’ve always done it that way before” and “Why change something that works so well?” can block progress at GE as much as anywhere.

Will the change be successful? If there’s any company you’d want to bet on, this is the one.

But there are no guarantees. You’re only as good as your last bout of creative destruction.

Wally Bock

Wally Bock is a coach, a writer and President of Three Star Leadership.