WM: How did you keep morale up when everyone in the media was making bets on who would win?
Conaty: We just banned running for office. In fact, running for office still is the kiss of death at GE, because when you have people running for office you have competition going on within the house. We are competitive as hell, but we want to direct that at our real competitors. So when the media got involved, we just let them do their thing. But internally, we just kept drilling down and watching the top three individuals at the time.
WM: But how did you make sure that the three candidates didn’t start competing with each other in a negative way that affected morale?
Conaty: Jack told them within the final six months that, No. 1, we were putting their replacements on the job. There would be one winner, and the two that didn’t get the job would have to leave. Putting their replacements on six months in advance was more of a shocker for them than it was for us. We also got the opportunity to see how they managed their successors.
WM: These individuals represented some of your strongest talent. Isn’t there something to be said for trying to keep the two candidates who didn’t get the CEO position?
Conaty: There is, but in this case we felt—and Jack felt stronger than I did on this—that the level of interest in the candidates as future CEOs of other major companies would just be intolerable for us. While I personally was trying to make the case that we could retain two of the three, Jack listened to me, gave me my day in court, but decided that the pressures to leave would be too intense. And he was absolutely right. There were companies that were holding their CEO positions open at the time—3M was one of them, so was Home Depot. And there were a couple of others. I think Jack felt that when he took over as CEO, there was an internal horse race. There were five or six candidates in the running and he just found that environment and internal competition to be distasteful and dysfunctional for the company. He also felt that you have to give one person the job and not have somebody looking over their shoulder hoping they slip on a banana peel.
Workforce Management, July 23, 2007, p. 28 -- Subscribe Now!