A recent Wall Street Journal article takes a look a GE’s new management plan. In the past, GE has shifted their mangers to a new field every few years following the belief that exposure to all facets of the company would make well-rounded executives, but the company has shifted focus in recent years and plans to keep senior leaders on a one field.
Current Vice Chairman John Krenicki reflects the old model and has worked in chemicals and materials, lighting, plastics, superabrasives, transportation among other industries, but he believes that the leaders of the future won’t reflect his diverse background. He states that “The next leader of GE Energy won’t have a C.V. like mine… Its next leader will likely come up through GE Energy.” In many ways, managers are now tailor-made for their positions. GE spends approximately $1 billion per year training their managers, and its no surprise that Krenicki can name the exact field that will produce GE’s future top executives.
Narrowing management expertise reflects a shift in the market in which streamlining business yields greater results. GE recently pared down their focus by removing fields like plastics and insurance to focus on air craft engines and health care. With greater focus comes the expectation of expertise, and this reaches CEOs and upper management as well, which sometimes means introducing engineers to the realm of management.
GE’s aircraft-engine operation is one of the company’s fastest growing businesses and is currently led by David Joyce. Joyce spent his entire career in GE’s aviation unit working on engine platforms and has extensive practical experience with aviation engineering. Chief Executive Tom Horton once called Joyce from Beijing to ask about an engine maintenance issue, which Joyce could respond to without delay, showing how the new, unique combination of expertise and management executives now hold.
As Susan Peters, who leads executive development at GE, said “People are likely going to be in the jobs longer both for domain knowledge and accountability. It is because of the complexity in the world.”