Steve Kerr holds the distinction of being the first executive formally recognized as “chief learning officer” at a major corporation. The title was granted by Jack Welch, General Electric’s famed former CEO, who objected to the acronym that would have accompanied the title “chief education officer.” The difference in designation is not trivial. It was the difference between passivity and action, noun and verb.
As the former leader of GE’s vaunted Crotonville operation, and now CLO of Goldman Sachs’ Pine Street learning arm, Kerr brings an active, collaborative and strategic perspective to the role he has held for more than a decade. He believes that CLOs can maximize their impact by running firm-wide learning initiatives, encouraging “boundaryless” thinking and even participating in the development of smart compensation and reward systems.
Kerr recognizes that there are “a finite number of ways to be distinctive” and suggests that CLOs should endeavor to strengthen their organizations’ chosen competencies. However, he explained that many companies that consider customer intimacy a distinctive competency must begin to think and act differently.
“You don’t have a single customer,” Kerr said. “People say, ‘Listen to the voice of the customer,’ but there isn’t one voice. Customers speak with many voices. GE, for instance, sells to Boeing, but GE sells lighting and plastics and aircraft engines. Not only are there different people at GE making these things who have product knowledge, but you have many people at Boeing signing off. The customer doesn’t have any control over who is buying the aircraft engine. He is buying lighting, for example. So part of the answer is, you need teams of people in order to be in touch with the many voices of the customer.”
Kerr explained that at both GE and Goldman Sachs he has arranged for individuals in different roles, departments and divisions to come together and learn more about one another’s areas of expertise. Customers and other key constituents also are invited to participate in learning events, widening the perspectives of professionals engaged in difficult and demanding business relationships. Such efforts facilitate cross-boundary collaboration and successful cross-selling.
Goldman, for instance, can meet its promises to “bring the whole firm” to a client relationship, whether the services necessary to address the client’s challenges involve investment banking, foreign exchange risk management or some other relevant capability. “What that means is—more than most investment banks—Goldman has the ability to assemble multi-functional, multi-divisional and multi-locational teams to generate client value,” Kerr explained.
And while perspectives, skills and capabilities are critical to success, Kerr believes incentives are the most important factor influencing motivations and enabling collaboration. In other words, account-focused people should be given rewards in relation to their ability to address a wider range of customer challenges. They should not be merely incentivized to sell a particular product or division’s products, as is common in business today. “You are telling people, ‘Don’t do this to be a martyr. Do this because it’s in your own best interest,’” Kerr said. Whether the incentive is “splits” (similar to a “finder’s fee”) to encourage divisional collaboration, corporate profit sharing or some other set of approaches, the point is to ensure incentives are aligned with action.
Kerr said that GE’s “elephant hunters” once concentrated their energies on selling aircraft engines above all else because of the prestige and financial awards associated with this big game. Even as GE began to measure its selling activities more carefully and it became clear that the so-called “after-market” of spares and service contracts was the true engine of profit, aircraft engines remained the prize. As it turned out, GE’s growth potential in the field was not truly realized until the company began recognizing and rewarding the quieter, yet more profitable, sellers of service.
“I think there is no substitute for self-interest,” said Kerr of what it takes to make change initiatives scale and endure. “In the beginning, you can fund it. Charismatic leaders can excite. You can give people venture fees to get started. In the end though, you have to have work that is satisfying, or you have to have people feel that doing this thing—managing the change, not going back—is in their own best interest. The most single important predictor of whether change will last is whether the measurements and rewards are aligned with the desired behavior.”
Jeff Thull is president and CEO of Prime Resource Group, and a strategist and valued adviser for executive teams of major companies worldwide. He can be reached at email@example.com.
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