The Sept.-Oct. issue of the Harvard Business Review has an interesting package of articles on the 16-year tenure of recently retired G.E. CEO Jeff Immelt (including an essay by the man himself on what he learned during his time leading the company). One of what may be among his lasting impacts on the company is the campaign to use algorithms to transform the way GE develops and retains its 300,000 employees.
As writer Steven Prokesch notes, GE is now positioning itself as a tech-focused industrial company and has hired thousands of software engineers and other digital natives. These employees tend to have little patience for bureaucratic processes and a thirst to grow in their careers. As a result, GE’s HR team is coming up with a raft of analytics-based applications to help them develop their careers and networks, identify high potentials and match them up with training opportunities. “It’s GE’s version of Match.com,” James Gallman, who helped lead the effort at GE and is now Boeing’s people analytics director, told Prokesch.
GE’s analytics push is focused on six areas of talent management: career and succession planning, training, high potentials, networks, talent retention and cultural change. The tool for career and succession planning is the furthest along, writes Prokesch. It uses data on the “historical movement of GE employees and the relatedness of jobs (which is based on their descriptions”) to help users identify potential new opportunities throughout the entire company, not just in their own business or geography. The app is also intended to help leaders do a better job of succession planning by identifying “nonobvious candidates,” for example. “When we’re thinking about who could possibly fill a particular role, we have a technology that helps us come up with additional possibilities,” HR exec Paul Davies told Prokesch.
GE’s training app, still in the prototype stage, recommends training to help an employee do a better job and advance in his or her career. The company plans to connect it to an existing performance-development app for GE’s salaried employees that provides them with a steady stream of constructive feedback from their managers (Under Immelt, GE did away with the forced-ranking model implemented by former CEO Jack Welch, which has fallen out of favor in most of corporate America).
GE’s HR team is also building an app that uses a technique called the “Pareto frontier” to draw on “outcomes” data such as salary increases, bonuses, promotion rates, etc., to identify high-potential employees. It’s also building an app for networking that’s designed to help employees identify others within the company they can go to for help or advice on a particular problem.
The team is also testing an app for talent retention that’s designed to predict, within a six-month window, when managers and employees in a given function are likely to jump ship. It will identify certain circumstances — such as when a team member leaves — under which people often quit, so that managers can intervene by, for example, talking about the next roles they might play.
Finally, GE’s “cultural change” app would help it identify factors within its organizational structure that may affect its efforts to become a nimbler, more customer-focused entity. For example, the app — still in the early stages of development — would measure whether people serving on large teams feel differently about the company than do people serving on smaller teams.
As Cade Massey, a professor at Penn’s Wharton School, tells Prokesch, although none of these apps will be a magic bullet for talent retention and development, they will give GE much more to rely on than intuition and bias in terms of what works and what doesn’t. “As analytics progresses, it offers a chance to make more rigorous those intuitive methods and to de-bias some of that judgement,” he says.