Tuesday, April 17, 2012

General Electric: How to Find Great Leaders From Within

Imagine you are the CEO of a multibillion dollar company and you are faced with a major crisis. You've discovered that your company has sold 1 million refrigerators with faulty compressors and a recall is required. You need some to manage the replacement of the faulty compressors; who are you going to call? (Not ghostbusters).

In this situation, many companies would have delegated this task to an experienced executive. General Electric (GE) was not one of these companies; instead, they enabled a budding 33-year old manager with no recall experience to lead the initiative. [1] Long story short, the budding manager successfully coordinated the replacement of the million defective refrigerators and is now the CEO of GE. His name is Jeff Immelt. 

Jeff Immelt has often attributed his promotion to CEO to this particular event. On one hand, it is about being at the right place at the right. On the other, it is also about the current leaders identifying opportunities and putting the up-and-coming managers in the right positions. That's exactly what Jack Welch, the high successful and venerable CEO that preceded Jeff Immelt, thought. Mr. Welch took a lot risk in appointing Jeff Immelt to deal with crisis. At the same time, Mr. Welch saw an opportunity to test Jeff Immelt's leadership abilities and stretch his capabilities. Don't get me wrong, Jack Welch had a lot to lose. Poor handling of the recall crisis could have had detrimental ramifications for GE. But Jack Welch trusted Jeff Immelt and that is a sign of great leader. 

I've read my fair share of praiseworthy stories regarding Jack Welch. GE's stock price increased 4000% over the two decades that Welch presided as CEO. [2] But perhaps his greatest asset was identifying great talent, trusting them, and putting them in position to succeed. So for those that aspire to become leaders in your respective companies, push yourself. Go beyond your comfort zone. Ask your managers what you can do for them and learn as much as you can. When the opportunity presents itself, "kill it". Remember, luck is when preparation meets opportunity.

References:
1. Colvin, Geoff.  How to Build Great Leaders. CNN Money. 20 Nov 2009.
2. Leung, Rebecca. Jack Welch: I Fell in Love. CBS News. 11 Feb 2009.

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