Learning to Lead – Fiasco at General Electric

The leadership industry has studiously avoided studying the biggest debacle in its history: leadership learning at General Electric. Big mistake. How to learn if not from our failures as well as our successes?  How to learn to do things right without taking a long, hard look at what went wrong?

The contours of the story are familiar. In 1956 GE purchased a lovely, leafy parcel of land in Crotonville, an hour outside New York City, with the intention of transforming it into a world-class campus for learning to lead and manage. Crotonville became in time a pet project of legendary CEO Jack Welch, who would visit monthly to lead programs for rapt audiences craving a taste of GE’s secret sauce. Its secret sauce for developing leaders and managers ostensibly second to none. For the hundreds of thousands who worked at GE, a trip to Crotonville was, as the Wall Street Journal recently wrote, “an ardent desire and a treasured accomplishment.”*

But as everyone not living in a corporate cave knows by now, in recent years, most under the decade and a half tenure of Jeff Immelt, Welch’s handpicked successor, the trajectory of GE has been straight down. Its stock price is a fraction of what it was. Its assets are a fraction of what they were. The company has been booted from the Dow. And after dumping the man who inherited Immelt’s mess, John Flannery, whose own tenure at the top lasted just fifteen months, the board replaced him with Larry Culp. In an unarticulated rebuke to the temple of learning at Crotonville, Culp was the first outsider to lead GE in its 126-year history.

I should emphasize the obvious: that during its decade of decline GE’s board did little or nothing – too rudderless or too powerless to provide a corrective. Though handsomely rewarded, very handsomely rewarded, for their time and trouble, board members were mostly content to follow their leader’s lead, even as, hands held, they fell off a cliff. (Cautionary note: Immelt was both chief executive officer and chairman of the board. Not generally a good idea.)

If GE had not been so foolishly enamored with what had been crafted at Crotonville, and if GE had not been so steep in its decline, and if GE were not so oblivious to the irony of what transpired, there would be no story here. Similarly, if the leadership industry would give this case the scrutiny it deserves, there would be no lessons yet to be learned. But truth is we still don’t know what happened. How it happened that an atypically longstanding, and singularly heavy, investment in developing the world’s best leaders and managers went so badly wrong.

The Wall Street Journal closed a long, detailed article on GE this way:

“To Flannery, Immelt, Welch and the others schooled in Crotonville, Larry Culp’s ascension punctured a deep and abiding conviction: General Electric made the greatest managers in the world, who could run anything better than anyone else. When the company they loved needed them most, though, the heirs to Edison’s ingenuity had run out of ideas. In the cruelest of codas, the last CEO of America’s great industrial conglomerate would be an outsider.”

It’s a sad story – one that says at least as much about what is happening in the leadership industry as about what did happen at General Electric.

——————————————————————————————————————————

*Thomas Gryta and Ted Mann, “Burned Out,” Wall Street Journal, December 15-16, 2018.

 

 

Leave a Reply

Your email address will not be published. Required fields are marked *