Ge Talent Machine

9-304-049
REV: NOVEMBER 3, 2006

CHRISTOPHER A. BARTLETT
ANDREW N. McLEAN

GE's Talent Machine: The Making of a CEO
For more than a century, General Electric (GE) had been recognized as one of the world’s leading
diversified businesses, and regularly found itself at or near the top of America’s and the world’s most
admired corporations. From its founding in 1878 by Thomas Edison, thecompany grew to be a titan
in the world of electrical generation, distribution, and use—and a widely followed model of modern
management practice. GE was a pioneer of centralized corporate control in the 1930s, an exemplar of
the decentralized multidivisional organization form in the 1950s, a leader in strategic planning in the
1970s, and a model of the lean and agile global competitor of the1990s.
Throughout its history, GE always promoted its top leaders from its own ranks. The company’s
much admired executive development practices were rooted in the cultural values put in place by
Charles Coffin, the CEO who succeeded Edison in 1892. Over the next 20 years, Coffin’s commitment
to creating a meritocracy based on measured performance became the foundation for a culture that
was tomake GE “a CEO factory” as one observer called it.1 Throughout the 20th century, this machine
produced a pool of skilled managers that not only met the company’s own needs, but also became a
major source of CEO talent for corporate America. So powerfully enduring was Coffin’s
accomplishment that a 2003 Fortune Magazine article named him “the greatest CEO of all time.”2
On September 7, 2001,when 44-year-old Jeff Immelt was named the company’s twelfth leader
after Edison, he faced a daunting challenge. Not only would he be leading a $130 billion global
company managing businesses from lighting to aircraft engines to financial services, but he would do
so following Jack Welch, a legendary CEO who, over two decades, had generated an average annual
total return to shareholders of morethan 23%. (See Exhibit 1 for selected financial data.)
As Immelt took on one of the biggest management jobs in the world, some wondered whether
GE’s vaunted management development process had prepared him to lead such a complex
organization. But for the new CEO, the bigger question was, how could he ensure that GE’s talent
machine kept developing executives who could continue driving thecompany’s superior
performance?

Building the Talent Machine: History of GE’s HR Practices
Building on the foundation laid by Coffin, GE’s human resource (HR) policies and practices
underwent significant development and change in the last half of the 20th century. Four successive
CEOs each made the development of management talent a high priority, and in doing so, made GE’s
human resourcemanagement processes among the most sophisticated in the world.
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Professor Christopher A. Bartlett and Research Associate Andrew N. McLean prepared this case. The helpful input of Jim Ettamarna, MBA Class
of 2003, is gratefully acknowledged. HBS cases are developed solely as the basis forclass discussion. Cases are not intended to serve as
endorsements, sources of primary data, or illustrations of effective or ineffective management.
Copyright © 2003 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685,
write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No partof this publication may be
reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical,
photocopying, recording, or otherwise—without the permission of Harvard Business School.

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GE's Talent Machine: The Making of a CEO

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