Diversity in Corporate America

GE's African American Forum

Jeffrey Immelt, chairman and CEO of General Electric Co., is an engaging speaker. Dressed in standard business attire but for a jacket—light blue shirt, blue tie and dark pants—his presentation was highly anticipated at the African American Forum’s Global Diversity Symposium XII weekend in Washington, D.C., in August. “The company . . . is in solid shape for the future,” he tells the audience.

The forum is a diversity initiative that GE executives wholeheartedly endorse as a vehicle to ensure that GE has a consistent, qualified and dedicated talent pool of African-Americans. “It’s hard to describe this forum to someone, the energy, the excitement,” says Deb Elam, GE’s diversity leader and a leader in the AAF.

Indeed, it is hard to believe that hundreds of Black GE employees from all over the globe gather yearly for a weekend of empowering seminars, networking and inspiring speeches. One intern, attending for a second year, comments that the symposium is where he can meet managers and talk to those in key positions about his career aspirations. “I found out about a program in finance,” he said excitedly. Currently working in insurance, his goal is to work in the finance field.

The Beginning

The AAF began as a meager gathering of African-Americans wishing to support each other, network and explore strategies for obtaining key managerial positions in the company. The group’s Web site, http://ge.console.net, says the seeds of the initiative were planted with a letter from an African-American executive, Mike Shinn, then a program manager for Recruiting & University Development, to Jack Welch, chairman and CEO, in December 1990. Employees first gathered in 1991, expressing their concerns about advancement in the company, asking if they were valued and if their work was being recognized, and wanting to do something to stir the pot. Welch issued a challenge to the 90 to 100 African-Americans assembled: “What are you going to do about cultural diversity in GE?”

Reportedly, Welch went back to his all white executive board and berated them for lying to him when they said there were no qualified Blacks for key positions, because he had just left a room full of them. The story goes that he challenged the white executives to go out and engage the Blacks in the company and identify who can step into leadership positions.

The AAF, meanwhile, set about planning an initiative for GE. They studied best practices and like initiatives at other companies, such as Xerox and AT&T. At a follow-up meeting that year, the AAF was born. By November, an interim structure was instituted. By 1993, AAF was a reality, with the full support of Welch and all GE executives. Its mission was to “strengthen African-American employees at GE through professional development, career management, mentoring, exposure and networking [that] will enable retention and growth.”

The mission statement also expresses the Forum’s a commitment to community and the neighborhoods where employees live, to encouraging youth to excel in science and math and to heightening the profile of GE as an employer of choice. “I think what is distinctive about General Electric’s approach to diversity is that it is very practical and it’s very hands-on and it’s very focused on getting individuals trained to be leaders of the company,” says Pamela Thomas-Graham, president and CEO of CNBC and a leader in the AAF.

The first diversity symposium, hosted in Washington, D.C., in 1993 under the theme, “AAF: Coming Together to Share and Learn,” set the stage for this very successful protocol. Today, African-American men head two of the 11 businesses comprising GE. Several senior executive positions are also held by African-American women, including Thomas-Graham and Paula Madison, president and general manager of KNBC, the second largest television station in the NBC family. KNBC is located in California, one of the top five television markets in the country.

The 2004 AAF Symposium

This year’s symposium drew the AAF’s largest gathering ever, with more than 1,000 attendees. The theme was “Transforming 21st Century Leadership: Only GE . . . Only AAF.” As usual, all of GE’s executives, Black and white, were present.

A key component was a drive to raise money for the Lloyd Trotter Scholarship fund, named after the president and CEO of GE Consumer & Industrial, one of the company’s most successful businesses. Trotter is a founding member of the AAF. Last year the fund raised $81,000 and supported 22 students. Proving that GE acts on suggestions emerging at the annual AAF symposium, GE’s new humanitarian initiative in Ghana also took center stage. The initiative was developed and implemented by the GE Foundation as a result of concerns addressed at last year’s symposium. The foundation has pledged $20 million over five years to build infrastructure and provide health care, clean water, roads, etc., in the West African country.

Yibrah Tesfazghi, an Eritrean who oversees GE Energy’s business in Namibia, Egypt, Tunisia, Angola, Libya, Nigeria and South Africa, heads the initiative. Tesfazghi spoke of the cultural, political and economic pros and cons of doing business in Africa, stressing the continent’s potential and noting that GE will be in the forefront of securing business opportunities.

INROADS, a national mentoring organization, presented AAF and GE with its National Account Award. The AAF is the largest of INROADS’s 700 organizational supporters. Currently, there is at least one intern from INROADS in every GE business.

The AAF’s role in GE’s challenge

Introduced by “high potential employee” Tammee Thompson, who has been fast-tracked in the AAF for key positions, Immelt is relaxed, upbeat and smiling. He recounts the accomplishments of each business in the company, beginning with comments on the new three- to five-year plan. “My job everyday . . . is to get up and sell the company. . . . I can sell this stock! [The company is] in fabulous shape,” he jokes.

Ahead, however, lies the “challenge of our lifetime,” Immelt says. “To take a great operating culture, a great financially disciplined operating culture, and transform it into a market-focused commercial enterprise, that is a challenge. That is our challenge,” he says. Meeting that challenge will require a “complete transformation of the culture, teaching new leadership traits . . . measuring people differently . . . building capabilities,” he says. GE will have to become a more global company with expanded growth of 7 percent or 8 percent. The formula, he stresses, lies in culture, capabilities and funded commitments.

AAF will play a key role in helping GE meet its challenge, Immelt says. “Every year that I get together with the leadership of AAF, I see a better team. Every year when I come to this meeting I see people that are more engaged in the company. . . . It is critical for us that you continue to progress,” he tells the gathering. While commending AAF for its contributions to GE, he stresses that more has to be done. For one thing, AAF has to do a better job of keeping employees with the company, assisting them in the formative years of their career with GE so that they emerge ready for key positions. “If we find that we’re still losing people in that pathway between years 2 and years 10 and the AAF is not stopping that, then we’re not doing our jobs. You’re not doing your job,” he says. “That’s the part of the deal you gotta own!”

With the global economy becoming even more global, 10 years from now GE will be a company “that probably has 400,000 employees and 60 or 70 percent of them are going to be outside of the United States,” Immelt says. GE has to be prepared for the consequences of that in terms of leadership, and in that regard, the AAF has to lead the company in many ways, he notes. Not only will the company need more qualified persons that look like the global customer, but it also will need those persons sooner rather than later. “Recruiting has to be there and I can help control that. And we do a pretty good job of recruiting diversity . . . promoting people,” Immelt says. However, when employees graduate from a training program, work in the field, then, in five or seven years begin to look in earnest to advance to key positions, the AAF becomes critical, he insists. “[AAF must] help people make it through this career, the volatility-routed career, and make sure we can promote them and continue to grow them for the future,” he says. If the AAF cannot meet this challenge, Immelt comments, “ . . . then we’ve wasted money bringing you here.”

Looking Ahead

Three key elements make the AAF model work, says Trotter of GE Consumer & Industrial:

• Sweat equity—ensuring that leaders are willing to take on the extra burden of mentoring;

• Fitting the objectives of the initiative with the objectives of the business. This is accomplished by developing potential faster, thereby making the company stronger while developing people who give more back to the company; and

• Education and exposure—ensuring that employees are educated and have the opportunity for education. “We can then give them the necessary exposure to managers and executives that will assist in the advancement of their careers.”

He insists, however, that none of this would mean anything if the company’s leadership did not embrace the concept. “The whole key is the total buy in of the leadership team,” he says. And, even with the above elements in place, the future will be a continuous work in progress—continually reinventing the AAF and continuing to raise the standard and dialogue of diversity and inclusion, he says. “It’s all about people and people development. It’s all about people growth that ultimately ties to the business objectives of how we’re gonna win,” he says.

Diversity at GE - From workers to suppliers to customers

GE’s commitment to diversity does not end with its work force. The company also seeks to identify a diverse team of vendors to ensure that it “focuses on the development and inclusion of all capable suppliers,” according to official company statements. In building this team, GE targets small, small disadvantaged and women-owned small businesses as defined in Part 19 of the Federal Acquisition Regulation.

Diversity, beginning with the work force, makes sense, says Art Harper, president and CEO of GE Equipment Services. “It’s the right thing to do. But even if you don’t believe it’s the right thing to do, it’s the smart business thing to do,” he says. He stresses that his customers are increasingly diverse and are looking to work with companies that demonstrate diversity in their work force. “I’m seeing on the other side of the table more people that are diverse and global, and they want to see on the other side of the table people that are very diverse and global as well,” he says. Having a diverse team lends itself to having a diverse supplier pool, Harper adds. “If you have a diverse team they tend to make different decisions about who the suppliers are, who you use. It becomes a much more open situation for suppliers.”

The supplier diversity initiative applies to GE’s operations companywide. Its key components include GE’s sponsorship of Dartmouth University’s Tuck Minority Business Enterprise Program (MBEP) and Advanced Minority Business Program, as well as the GE Small Business College. The Dartmouth University programs are designed for minority and female business owners. Each offers training in a variety of management issues. GE contributes content to each curriculum. The GE Small Business College is a 10-part educational and networking seminar for senior officers. Minority business owners and owners of businesses operating in economically distressed areas in particular are recruited for participation.

Suppliers can sign up for GE’s diversity vendor program at the company’s Web site, www.ge.com.

By Tanya Radford