Stall Points: Most Companies Stop Growing Yours Doesn't Have To by Bever van Derek

Author:Bever van Derek [van Derek, Bever]
Language: eng
Format: mobi
Publisher: Yale University Press
Published: 2008-04-27T14:00:00+00:00

Fig. 10.1 Increasing importance of talent mix management: percentage of executives sourced externally in selected companies

You may wish to monitor this metric in your firm, but you'll likely have to calculate it first. In our experience, few companies have included data such as this anywhere on their dashboards.

It might be a point of interest to note that the "diversified manufacturer" in the center of the exhibit- -12 percent external talent quotient, 10 percent CAGR (compound annual growth rate)- -is General Electric. It's somewhat predictable by now that GE should be in the "sweet spot" on a management metric; what may not be as well known is the strategy that the company adopted to achieve this level of diversity in its most senior ranks.9

On becoming CEO in 1981, Jack Welch created the Business Development Program as a management change mechanism within the firm. The program was structured as an autonomous consulting unit reporting to the corporate office and placed under the direction of Gary Reiner, then as now the firm's chief information officer. The intent of the program was to complement the firm's coveted entry-level development programs with an entry portal for top-tier midcareer talent. Candidates were actively sourced from the strategy consulting majors, as well as from a range of investment banks and more specialized professional services firms. Individuals were screened on the basis of analytic horsepower, teamwork, and star quality leadership potential, and successful candidates could then join the internal consulting arm, the Corporate Initiatives Group, or the internal mergers and acquisitions advisory, the Corporate Business Development Group.

Following an eighteen-to-twenty-four-month rotation in these groups, incumbents would be placed in high-profile operations and line positions. One HR manager reported to us: "From the line perspective, we love to see these people. We put them into key jobs, and they hit home runs. . .. Business units get the advantage of the outside perspective along with the certainty that these people are a good internal fit with GE culture."10

At our last look into this program, it had been enormously successful at leavening the firm's senior executive band. Approximately 3–5 percent of the top band of the firm had entered through the program, and about 75 percent of the program participants were still with the firm after three years, a very strong performance in what could have been an extended exercise in culture shock.

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