GE Talent Management: Aligning Hiring With Strategy

GE moved more engineers into its senior executive band in response to the CEO’s concern that tech-oriented managers were underrepresented in senior management ranks.

Image courtesy of GE.

New research into the challenge of how to hire the best people and hold on to them says that there are six key principles to success:

• Aligning recruiting efforts with strategy;
• Making sure the company’s talent management practices fit with each other;
• Making deliberate effort to embed corporate culture into talent management processes such as hiring methods and leadership development;
• Getting involvement by managers at all levels, including the CEO;
• Figuring out the best balance of the company’s global and local needs; and
• Finding ways to differentiate the company from its competitors.

One company that’s especially good at that first principle — alignment with strategy — is General Electric.

The GE example and overall research is explored in the article “Six Principles of Effective Global Talent Management” in the Winter 2012 issue of MIT Sloan Management Review.

“Corporate strategy is the natural starting point for thinking about talent management,” write the authors. “Given the company’s strategy, what kind of talent do we need?” GE’s growth strategy, they continue, is based on five pillars: technological leadership, services acceleration, enduring customer relationships, resource allocation and globalization.

But implementing that strategy “may have less to do with strategic planning than with attracting, recruiting, developing and deploying the right people to drive the effort. According to CEO Jeffrey Immelt, the company’s talent management system is its most powerful implementation tool.” An example:

For instance, to support a renewed focus on technological leadership and innovation, GE began targeting technology skills as a key development requirement during its annual organizational and individual review process, which GE calls Session C. In all business segments, a full block of time was allocated to a review of the business’s engineering pipeline, the organizational structure of its engineering function and an evaluation of the potential of engineering talent.

In response to Immelt’s concern that technology-oriented managers were underrepresented in GE’s senior management ranks, the Session C reviews moved more engineers into GE’s senior executive band. Talent management practices also helped to drive and implement GE’s other strategic priorities (for example, establishing a more diverse and internationally experienced management cadre).

The MIT SMR article is authored by Günter K. Stahl, Ingmar Björkman, Elaine Farndale, Shad S. Morris, Jaap Paauwe, Philip Stiles, Jonathan Trevor and Patrick Wright.

The authors have a broad range of affiliations: INSEAD, Tilburg University in the Netherlands, Cornell University, Judge Business School at the University of Cambridge in the UK, the Aalto University School of Economics and Hanken School of Economics in Finland, Pennsylvania State University, Fisher College of Business at Ohio State University and Erasmus University Rotterdam in the Netherlands.

Their research looked at 33 multinational corporations, headquartered in 11 countries, and examined 18 companies in depth.