Wharton@Work

August 2012 | 

People First, Strategy Second

People First Strategy Second

General Electric is known for its extraordinarily successful leadership development system. High profile succession stories, in which top-level executives are replaced internally within one business day, have solidified the company’s reputation as unparalleled in talent management. In fact, GE shares its "playbook" with those outside the company who are eager to emulate it. But as Senior Wharton Fellow Ram Charan explains in his recent book The Talent Masters (Crown Business, 2010), "You can't truly emulate without deep knowledge.

"What these executives often don’t grasp are the subtler factors that make the system work, which are instinctive and take place routinely in GE culture: the straightforward and candid discussions through which leaders get to the heart of issues, the linkage of business processes with talent processes, the social systems that integrate the seemingly discrete meetings into a constant process — in short, the elements that characterize talent masters."

After 40 years each spent working with and for the company, Charan and co-author Bill Conaty take the reader inside GE, and four other companies identified as newcomers to talent mastery, to reveal the actionable tools and techniques that set them apart. As Charan notes, "If you want to become a talent master, to take your organization’s leadership development to the highest level, you need to understand the guts of these companies, the subtler factors that make these systems work. Our book puts you in the room where real conversations about people are going on. You’ll learn from a first-person perspective."

Charan continues, "If businesses managed their money as carelessly as they manage their people, most would be bankrupt. But for the great majority of companies, talent management remains hit-or-miss, governed by superficial criteria and outdated concepts, depending as much on luck as on skill." Talent Masters, conversely, review people "as thoroughly and regularly as they review operations, business performance, strategy, and budgets. Once you've seen at a very deep level how companies who do it well make it happen, we provide a Talent Mastery Tool Kit so you can bring this learning to your organization immediately. In the fast-changing global marketplace, talent will be the big difference between companies that succeed and those that don't."

High-Potential Leaders

The Talent Masters, explains Charan, was written purposely, although not exclusively, for the Executive Education market. “The executives who attend programs such as High-Potential Leaders and the Advanced Management Program are already working on their own development. After all, a drive to continuously learn and improve is an indicator of leadership potential. My role as an educator and an author is to accelerate that growth. By teaching the discipline of personal development and identifying the specific, unique areas that need to be developed, I can help them get further faster. The Tool Kit in The Talent Masters isn't just for developing the leadership capabilities of others; it also provides a way to develop yourself.

Does your company have the culture of a talent master?

The Tool Kit offers a range of actionable ideas and templates, including leadership pitfalls, actual powerful and effective feedback letters, how-tos for ensuring smooth successions, and twelve key true-or-false questions that can help you determine where you stand today on leadership development.

Those questions include:

  1. Senior leaders are heavily involved in recruiting and developing talent at all organizational levels.
  2. Leaders at every level are vigilant about spotting new talent in the ranks, not just among the people reporting directly to them. They see it as a major part of their job.
  3. Judgments on leaders are based on hard evidence and cross-checking of observations by multiple people.
  4. Leadership development is attacked as intensively as delivering financial results.
  5. Developing other leaders is expected and rewarded.

Putting people first — investing thought, time, and resources into true talent and leadership development — may be the single most important strategy to pursue.

(Note: This story first appeared in the December 2010 issue of Wharton@Work.)