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How GE chose John Flannery to be the next CEO

How GE chose John Flannery to be the next CEO

How the company has systematically developed succession planning for CEO.  

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Susan Peters as the head of HR at GE, the major responsibility is to deliver for investors, customers, and employees, the most important responsibility is to help develop the leaders of GE throughout the organization – with a special focus on senior leaders. Susan spent most of her career on leadership development and today GE announced the most important project she 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. She adds 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 quoted 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 GE 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.

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.

Questions asked to the CEO.

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?

  • How would you position GE to win in that environment?
  • What strategic changes would you drive, including capital allocation or portfolio management?
  •  What do you see as the most beneficial aspect of GE’s culture that would be important for you to maintain? What would you plan to change?
  • What is some of the toughest personal feedback you have received?
  •  What professional or personal experiences have helped shape your global perspective?
  •  How do you learn?

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 changes 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.

 

Source: The inputs have been taken from Linkedin blog by Susan Peters – Senior Vice President, Human Resources at GE

 

  1. Dhirendra
    June 15th, 2017 at 09:02 | #1

    This article is a good example for other enterprises and especially for HR Heads and top management / Board of Directors to craft a succession planning keeping wider stakeholders in mind and adopting a comprehensive and relevant criteria for selection, developing and finally taking right decisions.

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