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A Conversation with Bill Conaty on candor and trust in leadership

September 30, 2011

It is with great honor that Linkage’s Thought Leader Series welcomed HR Legend Bill Conaty for an hour-long presentation on Why Smart Leaders Put People before Numbers earlier this month. Following his prepared remarks, Linkage’s Rich Rosier sat down with Mr. Conaty for a 30-minute Q&A session. In the following excerpt, Bill Conaty discusses how candor and trust have been used at GE to lead to better insights into people’s talent and to pinpoint development needs to accelerate personal growth.

Interested in leveraging the recording of this session in upcoming leadership programs? Contact Linkage at 781-402-5555 for details on our on-demand options.

Rich Rosier: What can leaders of HR/talent management do to convince non-believers that HR and talent management are critical components of the business?

Bill Conaty: It’s sometimes difficult.  I mean, if a CEO is not instinctively interested in talent development and succession, you’ve got to wonder if you’ve got the right CEO.  But what HR leaders can do is really become much more persuasive, much more involved in the business.  I think that one of the things that helped me was that I came from the operational side.  I started with a company in manufacturing operations.  So, I had a real interest in the operational side. 

So, the people piece of it and the HR piece of it became integrated with the operational side.  When operational people—someone like me—come in with an idea about people, they are not perceived as being in on some social cause but rather trying to really make the business better, to make the business more productive.

So, what I think HR leaders can do, is to get very intimately involved with functions outside of HR.  In other words, get in, spend some time with your finance leaders, understand the business levers, understand what really is facing that CEO or business leader every day, and then relate your HR agenda, your vision and your mission to that operational side.  Then, operational people will listen.  I mean, as long as they don’t think you are there for health and happiness or that your job is to run the picnics and benefits. 

You have to raise your game, and the way that you raise that game is not by talking about some esoteric issue that really has nothing to do with what is confronting that business leader at that time, but by talking about something that is directly related to what he is worried about and has to do with talent and people and human resource organization. 

So, I think relating the game more to the business side will enhance that credibility and enhance that receptiveness of a leader to see HR as a legitimate business partner.

Our next question is from Kim at General Motors: Could you please talk about the journey GE took to get candor as part of the leaders’ DNA?  You talked about it being a ten year journey.  What was required to make that happen?

You know, we often talk about challenges and initiatives that come from the ground up.  This one starts at the top and goes down.  And this one really came to life in GE when Jack Welch took over in the earlier 80’s.  We had internal resumes that we reviewed every year in the Session C process which is the human resource review process in GE.  And, everyone would cite a dozen strengths and no development needs. Then, you would say: “Are you geographically mobile?” And even though you wouldn’t move around the block, you would say that you would move anywhere in the world.  And then for career expectation everyone wanted their boss’s job.  They felt the thing to say was: “I want to have my boss’s job.” 

After Jack came in, and this started at the very top of the organization, people would come in with these glowing reviews and say, “Hey, that doesn’t make any sense.  This guy’s got some strengths but I hear that he is a real jerk with people.  I hear that he kisses up and kicks down.  Plus, he hasn’t made his numbers in the last three quarters.  So how can you be presenting someone as a top performer with those kinds of credentials?”  It was a real take back for people who had traditionally just gone through the exercise of saying nice things about people. 

He broke that up.  And the fact that he started with the senior leaders made it a whole lot easier for them to take it down to the next level, and the next level, and the next level once they had gotten some feedback on their own development needs.  So, it took probably a decade to really get true trust and candor in the system.  But this is one that had to start at the top and go down.

I’ve noticed a lot of organizations wrestling with how to develop trust.  How did that trust materialize when the candor is so candid?

I would say with us it was back to this topic of values.  Really making values important in your organization—not just a laminated card that you carry around in your wallet or a big sign over the receptionist’s desk, but things that we spent an inordinate amount of time on developing on what we said were our values.  With, values, meaning how we expect people to behave, what kind of culture we want to create, how people are going to be recognized and rewarded.  So everything we did related to those values and we made those values really come to life. 

And that again happened in the Welch era, where we had four or five business leaders who were successfully delivering the numbers year after year. 

But then we came up with these values because we said hey look, we can do better than just meet the financial numbers.  We should expect our leaders to embrace these values and make this a better organization overall. 

I would say 95 percent of our leaders got that and believed that he was serious about the values.  Some didn’t.  And at the first – we would always have a top 500 leaders meeting the first week of January every year to talk about what we accomplished last year and where we were going forward.  At that meeting Jack cited five individuals, five big leaders who were no longer with us, who always met their financial requirements but didn’t think we were serious about the values.  So, if you can imagine being in that audience, the 500 people that were there, you could hear a pin drop and if there were any doubters leading to that point, there were none left when that discussion ended because there were actual casualties. 

You referenced those early days with Jack with comments like “Well, that doesn’t add up for me because I’ve heard he kicks down and kisses up, etc.” I think that hits on a key point you make in the book over and over and that’s the value of observation by the leaders of what are the skill sets and characteristics of these leaders.  Can you talk more about how practically they make that happen?  And also, do you use formal assessment to argument those observations or do you just trust the observations to get really good data on these individuals?

We did a couple of things.  One, we did lots of informal interventions.  We did 360-degree performance reviews to get the peer/subordinate kind of inputs.  We often involved customers in that too.  In some cases, we involved spouses, which was pretty tricky.  We did that pretty much internally but we also had what we called a tandem assessment process which consisted of two GE certified interviewers who could have come in from an outside business.  So if you were in the energy business for instance, those certified interviewers might come in from lighting and appliances or something.  And they would do a real in-depth assessment on you—right from where you were born, your relationship with your parents, what you did through school and then every single job up through.

So, you would get about a 20-page input on yourself from these two interviewers who would now kind of become your counselors going forward, and we kept it outside the realm of your business so it wasn’t too close.  And you’d also get maybe two or three development needs that would come out of that.  To say, we maybe only do 30 of those a year, we don’t do them on people who we do not think have huge upside.  So start with that.  You’d come out with an action plan of two or three things.  Then, you had cycles of time to work on that and report back.

And, that really got at what the issues were.  So, if you were someone who needed to improve your listening skills, that would come out.  And then this team would work with you to improve over time.  And you’d have to show action that related to it. 

We used informal assessments, formal assessments, but again it gets back to that topic of intimacy—having the CEO and senior VP of HR in the business intimately knowing the top 600 people in the company.  And we said those individuals were corporate assets—they were on-loan to the business but they were corporate assets.  So if we decided to move you from the energy business to the aircraft engines business, we would do it.  Sure, we would tell you, the business leader, but we would do it.  And that was always tough because business leaders wanted to protect their best.  But since all of them had become products of that system, they understood it and it became instinctive. 

Those interviewers from the other business, just to follow-up on that quickly, were those HR people or were they line people?

They were HR people who went through a particular in-depth certification process to be able to do these interviews.  So of the two you’d have a lead interviewer and you would have kind of an associate.  And while the lead interviewer was getting to the root of the resume, the other would be more the scribe. And then they would put together their output of that meeting, which would be about a five or six hour meeting.  You’d get the early draft.  We’d also ask you who you would like us to reference with—plus we’d get our own list.  When we called people they’d start with: “Hey, look, he’s a great guy, I love him, I worked with him.” And you cut through all that and say look we know he’s a great guy.  We know he’s a top performer.  We wouldn’t be doing this if we didn’t think so.  But are there one or two things that could even make him better?  And they’d always come up with something.  So, you knew that input was really valid by the time it got back to you. 

How do you help a leader who struggles with giving candid feedback to their direct reports. Is that innate? Are there things you can do to help develop someone who lacks either courage or whatever it might be to give candid feedback?

That is a good question.  I think the first thing you do is make sure to tell that individual that you think their development need revolves around not being able to give legitimate feedback, and then cite some examples where that takes place. 

If I am constantly getting that kind of feedback from my leadership, I am certainly going to try and address it.  It is kind of human nature though to want to talk about the good things and not the tough things.  And I’ve seen some of the toughest leaders going: “You know, I’m gonna get Rich in here and I’m going to tear into him.” And then I talk to Rich afterwards as the HR person and say, “How did that discussion go?”  “Oh, it was great. A great discussion.” So they get all lathered up to have a big discussion and then kind of fold in the end. 

One of the ways to do that is to be able to do it not just with an appraisal.  You want to do it sometimes with a bonus.  Like I’m giving you a check, I’m giving you stock options, I’m giving you something.  What you find in those cases is that those people’s ears, on the receiving end, are wide open for feedback at that point in time.  If they think it has to do with job security or their job itself they tense up and they are defensive.  So, find ways, if an individual has trouble, where you are actually giving the person some recognition (and it may be in the form of a check, it may be a pat on the back) but you also slide in hey don’t forget, I’ve just told you all these great things, I just gave you a check, but don’t forget you need to still concentrate. Yep, got it boss.  Yeah, I got it.  So, winding that together.

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