Blog: How GE chose John Flannery to be the next CEO

Strategic HR

How GE chose John Flannery to be the next CEO

The company had strategically worked out every single move, including the date of transition way before it happened. Read here to know how GE did it
How GE chose John Flannery to be the next CEO

Hours later when various news agencies have flashed about the announcement of GE’s current CEO Jeff Immelt stepping down, and John Flannery taking over, GE’s Senior Vice President, Human Resources Susan Peters in her LinkedIn Blog Pulse wrote on how GE went about in choosing John as their next leader.

6 years – that’s the time GE took to finalize who will take over from Jeff. In 2012, writes Susan in her blog, the company chalked down the Job Description and over the next few years kept on evolving it. The focus was on attributes, skills, and experiences which are key characteristics of the next CEO. This was created based on the work environment, company strategy and culture. Research papers and articles were read, re-read to understand the best attributes required for the top job. After all, Jeff Immelt’s 16-year old legacy is difficult to break even. “We pulled our internal and external research together to create our “enterprise leadership capabilities,” a list of competencies essential for GE’s next great CEO. Our process reflected the recognition that CEO success is less about what they know going in and more about how fast they learn, experiences they have had, and their resilience,” wrote Susan. 

Describing it as the most important project, she wrote that today’s work environment demands greater leadership. To GE, the most effective leaders are the ones who can operate across multiple contexts and turn chaos into opportunities which make it evident for leaders to have ‘courage, grit, and resilience’. “Like all big decisions at GE, we did our homework. To say our CEO succession process have been deliberate is an understatement. It has been 6+ years in the making with relentless focus and discipline.”

In 125-year of GE history, there has been only 10 CEOs – with an average tenure of 12.5 years. Prior to Jeff, John F Welch, Jr was the Chairman & CEO from 1981 to 2001. GE focuses on internal stakeholders for their key positions always, and their succession planning strategy was marked with carefully pointed roadmap with instructions to the T. Not just the business, a great leader will have an impact on the hundreds of thousands of employees who will look up to him/her. 

Here’s the timeline Susan shared on her blog on how GE zeroed in on John Flannery

2011

  • Management Development and Compensation Committee (MDCC) dedicates portion of every meeting to CEO succession
  • Candidates moved into CEO preparatory roles
  • Initial draft of leadership criteria for the next CEO is completed


2012

  • Leadership criteria for next CEO is refined
  • Includes the previously identified internal candidates, the CEO succession list expands to encompass other key leaders.


2013

  • Board plans for summer 2017 as timing for CEO transition
  • CEO candidates appointed to larger leadership roles


2014

  • MDCC dedicates additional time to CEO succession, including pre-Board sessions
  • Successor criteria continues to be refined in light of the business environment and strategic needs of the company


2015

  • Board visits, providing candidates with increased exposure
  • MDCC and Jeff Immelt ensure targeted development and growth plans for all CEO candidates
  • External candidates reviewed, including detailed profiles on the top 10
  • Board refines list to focus on internal candidates only; Following review of external candidates, Board determines internal candidates had best attributes to lead company
  • Board reaffirms summer 2017 as timing for CEO transition, with Chairman transition to be completed by January 2018


2016

  • Board visits continue. MDCC work intensifies. Final candidates confirmed
  • Jeff Immelt intensifies in-depth coaching work with final candidates
  • Final candidates have increased exposure to investors and media
  • Board finalizes succession roadmap
  • 360-degree leadership assessment on all candidates
  • Detailed roadmap developed for summer 2017 CEO decision and transition 


2017

  • Board interviews individual candidates - early May
  • Individual candidate questions by Board to understand their vision for the company
  • Final review and evaluation of candidates against strategic needs of the company
  • Board voted on CEO on June 9, 2017


Few questions asked to the potential CEOs: 

  1. What would your current leadership team say they most appreciate about how you lead them?
  2. How would you position GE to win in that environment?
  3. What strategic changes would you drive, including capital allocation or portfolio management?
  4. What do you see as the most beneficial aspect of GE’s culture that would be important for you to maintain? What would you plan to change? 
  5. What is some of the toughest personal feedback you have received?
  6. What professional or personal experiences have helped shape your global perspective?
  7. How do you learn?


Susan writes that “in John Flannery, our company’s next CEO, the GE Board has selected a life-long learner and a strong operator with global experience. He is someone who possesses the capabilities needed to lead, empower and inspire. Over 30-years with GE, John has shown that he thinks big, dives deep, and is both adaptive and resilient. One of John’s hallmarks is how he engages the people and teams he leads.” 

(The inputs for this article have been taken from the LinkedIn Blog Post shared by Susan Peters, Senior Vice President - HR at GE)

Topics: Strategic HR, C-Suite, Leadership

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