Tuesday, 5 April 2016

Transforming GE- An Interactive Interaction

GE (General Electric) is a company which enjoys the distinction of being founded by the legendary inventor,Thomas Alva Edison.It's a company that has been in existance for 127 years, employing 350000 people in 177 countries.

In order for any company to survive long, there  is a need to change and reinvent itself periodically to be relevant in the current time ( an aspect discussed in my blog 'Business Agility-(http://hrdian.blogspot.in/2014/02/business-agility.html  ) . GE has been known to be a forerunner in implementing new ideas and concepts in management.Other companies tend to blindly adopt or follow something since it is GE that has introduced them.GE has had no problems discarding a management practice that has outlived its value or is not relevant anymore.In recent times GE decided to do away with the appraisal system modelled on the dreaded 'Bell curve'.GE was the first to introduce it that culminated to a sacking of the employees at the bottom of the curve who are deemed 'nonperformers'.

In the NHRD meeting held on 21st March 2016,  the interaction  and discussion was with two senior level executives of GE , one from HR and the other from the line viz Mr Raghu Krishnamurthy, VP(HR)-GE Health care and Mr Milan Rao President & CEO of GE Healthcare-India & South Asia.Moderating the discussion was Mr Raj Narayan  a former senior level executive of GE, presently with Amazon,.The method adopted was not only interesting but also very effective in  reaching out to the audience unlike the customary talk by the speaker of the day.Accordingly, Raj asked  specific questions to Raghu and Milan on various aspects of the GE culture and the challenges of transformation in a 127 year old company.Opportunity was given to the audience also to pose questions..

To a question on culture, Raghu opined that 'culture'is not sacrosanct.If you deem it so, nothing will change.Culture is often an assumption and when you change the context, change becomes possible.When Gandiji was thrown out of the train in South Africa or when Rosa Parks sat on the seat reserved for 'whites' in a  bus in the US, they changed the context and did not accept the 'culture'as it existed.A lot can be achieved through  changing the context by changing the (1) Goals (2) Resources (3) Constraints and (4) Leadership.

The next question posed was "what are the trials and tribulations experienced while moving away or discarding a set system (latest being the Bell curve based appraisal system) ?

Answer:   GE has adopted six sigma, nine block leadership talent grid and other concepts and also moved on with the times.The appraisal system modelled on the Bell curve was introduced in 1976 when Jimmy Carter was the President of USA. A lot has changed since then. Today, the decisions on appraisals affect employees working in 177 countries with  diverse culture.One important focus of the change was to ensure that no activity is done like an annual ritual. The dynamics of  change is so swift in the present days that it can be compared to that of  a hockey match.The boss is too far removed to give complete, holistic feedback.Therefore GE  has made changes in the system which enables "anyone to give feedback to anybody,"  The feedback would be ongoing and continous.

An App has been created for this purpose that provides touch points with a lot of people other than just your manager.The goals and objectives that tend to change midway has been replaced by 'priorities' (focus being on pivoting the priorities). The new system provides 'insights' instead of 'feedback.' with opportunities to get insights from anybody. The new model has enabled faster decions on whether to continue doing a thing or consider changing it.

Question: The change in appraisal system meant a change in scenario from one of  'fear and trepedition' to one of a relaxed environment. How did the HR team respond to it?

Answer: The biggest resistance to the changes came from HR.How do we connect this to compensation ? they asked.It has taken two years to reach where we are now.It will take another two years for the new system to become robust.This needs to be socialised as a continuous process.

Question:  How do you link rewards to performance after the changes?

Answer: Rewards are now linked to outcomes which are in turn linked to financial parameters.

Question: GE has trained over 10000 leaders world wide.How do you develop the people pipeline? What plans do you have for developing middle managers across geographies?

Answer: Developing of leaders is top priority and the board of Directors itself gets involved in the process. It discusses succession planning atleast thrice in a year.The future leaders are classified in to tier 1, tier 2 and tier 3 and the same is reviewed at various levels.The list gets refreshed every quarter and attention is given to the emerging talent, software talent and the need for going in for outside talent.Leadership development opportunities are provided and the indirect channel accomplishment extend to other geographies.

Question: How big a role does mentoring and coaching have in the company? Who does it?

Answer: We expect HR persons to be the direct coaches to their line managers.Mentoring is basically given to those in the tier 3 list.The onus is on the employee to seek advice from whomever he feels can help him.

Question ( addressed specifically to Milan Rao): During the course of your career, you have moved between various industries and across geographies. What has HR done to make your life easier or difficult?

Answer: Moving from one company to another is challenging in view of cultural differences. The movement from Airtel to GE meant encountering totally new clients and exposure to an unstructures American Multi national as against a very structured scenario in Airtel.The key factor is that the person making the change has the capability of accepting the differences and  imbibing  the essence of the new environment. For me, the first six months was the most difficult.At this time, the "Trust & Collaboration Workshop"organised by GE on the Stephen Covey principles helped considerably. The HR person, Mayank encouraged and supported me in understanding the GE culture.The training program organised by HR for the new recruits joining from outside  along with the internal promotees was useful in giving you a feeling that "you are not alone" and that there are others in the same boat grappling with similar issues.

A negative feedback or an area of improvement for HR is the lack of initiatives for preparing employees for the mid career transition.Coaching and mentoring discussions with people who have gone through the experience would be very beneficial in alleviating the problem.

Questions from the audience 

Question: Is GE doing anything for inculcating entrepreneurial spirit amongst employees?

Answer:  GE has been promoting the learn, adapt,pivot and change model of entrepreneurship amongst employees.If an employee has an idea that costs $100 to implement,initially $5 would be sanctioned for the prototype.In case this is developed successfully, $15 would be extended for the pilot.The approach is to constantly throw opportunities and encouragement for new ideas.HR needs to study the entrepreneurial spirit amongst line managers and take steps to inject people with this spirit wherever lacking.One can get inspiration from new age technology companies like CISCO and the start ups to get a varietyof thought processes.

In line with the current economic scenario, leaders are encouraged to unlearn and relearn, moving away  from a capex world to an opex world - teaching them to be less conservative and not dwell on the 1% risk .It involves loosening  them and  get them to explore leadership in nonobvious avenues that include teaching courage,speed and exposure to talks from experts of National stock exchange.

Question: On the one side, it is said that today appraisals & rewards are linked to business outcomes.In this connection I have an incident to share.My daughter,apart from being a professional in US, is interested in music and playing the piano.Recently at a function, she got an unexpected opportunity to play the piano on stage along side Beyonce, the celebrated singer & song writer.
Later, at the time of her appraisal discussion, her boss pointed out that she had left out the Beyonce episode amongst her achievements and promptly included it. Is this approach correct and acceptable?

Answer: The focus of the performance rating is on the 'impact' and not the 'person.' Performance management is in a way a celebration.- "a celebration of you".Against these parameters, keeping in mind the impact, we are open to including these as part of achievement.

Question:  What are the diferences in the rating parameters between earlier and now?

Answer: Earlier while we were looking at ratings of "Excellent", "Very Good"etc, presently the focus is on the impact- Whether the appraisee "exceeds impact", makes "meaningful impact" or a "low impact".

Question: What are the changes in the GE beliefs?

Answer: Earlier, we used to call the core, "Values" while now it is called "Beliefs".When we asked people what they wanted to change about the values; after discussions, it all came back to the same old core beliefs. The word "Belief" is more flexible and gives the suggestion  that it can change with time and environment.

Overall, the NHRD monthly interaction,  on an interesting  subject, on a pleasant evening with good ambience was a very rewarding experience for all those who attended. It stood out for the quality of content and a lively interactive audience.



  1. If a company like GE with its great and long history, can change with the times, including minor yet impact changes in its management and work culture, then why not our companies here, most of who want the employees to just perform, perform, perform or perish!!! Loved that bit about the pianist employee "performance" and "impact"and the response : "The focus of the performance rating is on the 'impact' and not the 'person.' Performance management is in a way a celebration.- "a celebration of you”. " Are our companies hearing this???!!! Because here, performance appraisal is such carrot and stick and "personal" (rather than personnel) exercise that is held to hang like a Sword of Damocles on the employee's head!!! Thanks Rajeev, for sharing yet another well documented, well presented and very interesting session!

  2. Dear Padmaja, a feedback from you makes one's day! All the efforts of note taking & summarizing becomes worthwhile and motivates one to keep writing.Thank you so much!