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In recent years, GE has faced severe business challenges — the company’s $200 billion market cap is half of what it used to be. Still, an area of enormous strength is the way the company identifies and builds leaders, as the large number of CEOs who once worked for GE testifies. Much of the credit goes to GE’s corporate learning programs, executed through a learning facility in Crotonville, N.Y., the oldest corporate university in the United States. As business becomes more global, how is leadership development at GE changing? How does GE use technology to teach leadership? What impact will the influx of the Facebook generation have on the way leadership is taught? Susan Peters — GE’s chief learning officer and vice president for executive development, and a speaker at the upcoming Wharton Leadership Conference on June 16 — discussed these questions and more with Knowledge@Wharton.
An edited transcript of the conversation appears below:
Knowledge@Wharton: Could you give us an overview of corporate learning at GE?
Susan Peters: At GE, we have been involved in learning and development for more than 60 years. We have the oldest corporate university in America at Crotonville, N.Y. GE purchased the property in the mid-1950s and we started teaching management there at that time in courses that were 13 weeks long. I know that’s a bit hard to believe. Of course, we have evolved; today the longest course we teach there is three weeks long. But the truth is that if you think about education, it is a fundamental and very deeply rooted part of our corporate culture.
To give you an overview of what we do, we have an umbrella approach that we call GE Global Learning. We break it up into three buckets. The first is leadership. The second is skills, which is driven by function — finance skills, marketing skills, etc. The third bucket is business. What we are trying to teach there is the knowledge that is specific and needed for a business or industry. As you know, GE is in a wide range of industries from aviation to healthcare to financial services so we have to teach specifics within each of those industries. If you look at those three buckets and aggregate them all, including all the training and programs, we spend about $1 billion a year in training at GE.
Knowledge@Wharton: How do you define your objective in teaching leadership?
Peters: The mission of our leadership effort is to inspire, connect and develop the leaders of today and tomorrow. That is our objective. We seek to do this through the Crotonville experience. If we do a good job with the people who come through the Crotonville classes, there is a huge multiplier effect. They go back and hopefully do the same thing — inspire, connect, and develop the people who work for them, and who might not be able to physically attend a course in New York.
Knowledge@Wharton: Who is your primary audience? At what level of the organization do you develop leadership? Is training offered throughout the company or do you target a certain segment?
Peters: Our leadership development programs run all through the organization. Let me segment the GE population for you. We have about 290,000 employees. A little less than half of them are professionals; the others are folks who work in the factories. The effort I’m talking about applies almost exclusively to our professional population. So let’s assume we are talking about 150,000 people — half of whom are located outside the United States. Those 150,000 professionals around the world are our audience.
We take a stair-step approach to leadership learning at GE. First, we have a suite of on-demand courses that are available 24/7 through your computer. We have an enterprise-wide license with several vendors to provide material. We ensure that this content covers a wide range of topics from management skills to project skills — we use a lot of video, material with downloading capability, etc. We have encouraged people to use those avenues for one-off or on-demand or lunch and learn programs. But I wouldn’t say this is the essential part of our leadership learning. It’s foundational and it is available.
The next group up consists of essential skills. We have 13 offerings involving leadership skills that everybody should have, including presentation skills, project management skills, understanding finance in a generic way, and so on. These courses are managed through the Crotonville staff but are delivered at GE businesses around the world. This is done through a TTT — Train the Trainer — concept. The integrity of the course is maintained because the Crotonville staff ensures that the person teaching it has been trained and certified.
One step above that, we have what we call cornerstone courses. These are programs where individuals physically come to a GE facility and spend time there. These courses are one week long and are offered around the world. There are four key courses. We have a Foundations of Leadership course that would happen early in somebody’s career, let’s say, during the first one to three years. Then there is a Leadership Development Course, a New Manager Development Course, and an Advanced Manager Course. Those courses span the first 10 years of your career, so you would be going to them maybe every other year or every third year.
Then we get to the executive level courses. These courses are all three weeks long and they are offered only at Crotonville — there is a Manager Development Course, Business Management Course, and the Executive Development Course. Those titles of MDC, BMC, and EDC have been in GE since the 1960s, so they have quite a historical aspect to them and quite an internal brand.
The final course we offer is for teams. So we offer leadership courses to everyone and at all levels.
Knowledge@Wharton: As you go up the stair steps, as it were, what kind of numbers are you looking at? You started with 150,000 professionals. Can you give me a sense of scale?
Peters: The usage of the on-demand programs varies from year to year. You might find 50,000 to 60,000 people a year do some sort of on-demand learning. The essential skills course involves 35,000 people. As for the rest, about 9,000 people a year go through courses in which you physically stay at the GE facility. You fly to Crotonville, N.Y. or to Munich, Germany, or Shanghai, China or wherever we are offering the course.
Knowledge@Wharton: Crotonville, of course, is famous. As you said, it has been the hub of GE’s educational activities since the 1950s. How many other centers has GE developed around the world to be focal points of learning for the company?
Peters: We have leveraged the fact that we have global research centers in Shanghai, China, in Munich, Germany and in Bangalore, India. We teach often at those places. They have become our home away from home, if you will. We do a lot of our Crotonville leadership teaching at Munich, Shanghai, and Bangalore, but also at other places around the world. In those cases it is often at a hotel facility. The Crotonville facility in New York is the only one that is residential. We have 188 rooms on the property. In the other locations we would have the participants staying in a local hotel.
Knowledge@Wharton: It is interesting to hear your comments on the global nature of learning at GE. Have you found that as you develop content for teaching leadership that the cultural context changes? In other words, are some things lost in translation or are you able to use the same content in different parts of the world?
Peters: The first thing, as we design or update courses, is that this is done by a global team. The team would typically get together in either Crotonville or Munich or, recently, Bangalore to do this sort of design or redesign. Often it is a redesign — you have to always tweak these classes to ensure that they include the most contemporary content and curriculum. So they start with global input.
The second element is that I have somebody on my team who is headquartered in Munich and another who covers Europe, the Middle East, and Africa. Somebody on my team is headquartered in New Delhi and she covers the Asia Pacific region. Their job is to ensure that as the course content is taught in the local environment, it is taught with the appropriate cultural overtone. The essence of leadership, we believe, is the same around the world, so we don’t change the fundamentals or the content. But there is always the cultural aspect and those local leaders ensure that it is embedded in the course.
Knowledge@Wharton: How widely do you use technology in your leadership development efforts? What has your experience been? What are the pros and cons?
Peters: The answer is somewhat bimodal. There is an element of our teaching that we recognize will always be face-to-face and, therefore, probably less technology sensitive. I don’t suspect that we will ever go to a place where we have only technology based learning or e-learning. We really believe that the “inspire, connect, and develop” happens with real impact when people are physically together. A tremendous amount of sharing happens across functions and geographies when people are physically together. An example of a course at Crotonville would be that there could be 40% or 50% non-U.S. participants from multiple businesses and industries, across multiple functions.
The other bimodal piece is that we really are trying to leverage and embed technology into learning. I mentioned earlier the availability of on-demand materials and how we are trying to get people to download podcasts or other kinds of content that people can access and listen to in the car, etc. Some of that is just educating people on what is available and how to do it and making learning a part of everybody’s day all the time.
We have built at our Crotonville facility several technical tools that are very helpful. We use TelePresence, which enables us to have a leader from another part of the world speak to a class in real time. We also have a virtual collaboration room, which enables people to work with teams in Crotonville simultaneously with a room that is structured the same way anywhere else in the world. We encourage people to learn and use new tools when they come to Crotonville or take classes, and to that end it is things like we actually have them do their report using Webex or WebCams on their laptops so that they are comfortable using those tools not only in the learning setting, but also in their business setting when they go home.
We have Kindles. We have global newspapers available on portals around the place so that people can — with touch screens — open the China Daily Times as they are sitting in the lobby of our education building. A lot of this is to demonstrate that these tools are now a part of our lives and that learning isn’t just about leadership but it’s about the use of new technology.
Knowledge@Wharton: What is your approach to team-based learning?
Peters: That is a course about which we feel really confident. We started the program in the spring of 2006 and piloted it that year. It was the first time that GE really pushed the senior level leadership team training. By that, I mean the general manager of a P&L unit and his or her entire team came to the training. It is a one-week class. We call it LIG, which stands for Leadership, Innovation and Growth. It basically is the team taking time to learn about current environmental or business issues and building their ongoing strategy for their growth playbook, which is really their three-year strategy outlook. It is an enabler for business teams to build their strategy.
What might some of the content be? When we first did it in the 2006, 2007, and 2008 time frame we were doing things like market segmentation, innovation and building adjacencies. The content that we are building for these teams now is much more reflective of today’s environment. We are focusing on themes like seeing around corners, scenario planning, and peripheral vision. We always have some innovation and globalization element to it. We always teach leadership. This enables people to get current thinking from thought leaders around the world. Then they go into a break out and say, “How do we apply this to our environment? Where do we want to be in the next year or two or three?” Because they are doing it as a leadership team, we have found it to be very impactful.
Knowledge@Wharton: You mentioned earlier that you spend about $1 billion on corporate learning at GE. How do you measure the return on your investment?
Peters: I am thrilled and privileged to work in an environment where the leadership team innately believes that the learning, the effort, the time, the money and the resources we put into learning have an inherent payback. So I can spend my time developing curricula and content on how we inspire, connect, and develop leaders instead of figuring out whether we are getting the payback.
Now we believe we do get payback because our businesses continue to grow and evolve. We have certain courses that we follow up with and we do a lot of pre- and post- work with the managers of people who go to these classes at Crotonville. We set the stage with the managers as to what they should expect the individual to experience while they are in the class and then after the class, expecting the manager of the attendee to know what they learned and, therefore, leverage that with that person upon return. But we don’t spend a lot of time saying, “Did I make a specific financial or numerical ROI?”
Knowledge@Wharton: A new generation — whether you call it Gen Y or whatever — of people who have grown up on the Internet and with social media is entering the workforce. As these younger people join companies like GE, are you changing your approach to learning in any way? How do you see the evolution of learning at GE taking place?
Peters: I do think the Millennials are bringing with them a different perspective on learning. We mentioned earlier that we have continued to evolve in the use of technology and tools such as podcasts, enabling people to put content on their MP3 players or whatever tool they want to use, even though they might physically be coming to a site in Crotonville or Shanghai or wherever. One of the ways we are doing it is to ask them a lot about what they want.
For example, we redesigned our Foundations of Leadership class a year ago and it was done with the input of Millennials. Those are the 20-somethings that attend that course. We did a heavy voice to the customer on both content and delivery mechanisms and approach. And as we redesigned the course it was really with their input and effort. We are constantly asking people what do they want more of and less of … every speaker in every class is rated and evaluated so we understand what’s current and contemporary from that class’s view. As those classes skew over time toward people of that age bracket, we are learning and taking feedback from them.
We have also made changes at Crotonville. Some of it is just updating the breakout rooms so that there are more technology tools in the breakout rooms as opposed to flip charts. Now everything is done online — we have created an internal Facebook type of capability that allows groups to establish themselves. Then they interact during the time that they are a part of that class, obviously, just a bit prior to the class, during the class, and then it enables post class discussion. But if you go into the breakout rooms now there is technology and screens that are much more active and whiteboards that can connect around the globe. This is an ongoing investment that is pretty significant, but it reflects the expectations of the Millennial group.