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The GE Work-Out

How to Implement GE’s Revolutionary Method for


■■
Busting Bureaucracy and Attacking Organizational
In this issue:
Problems — Fast!
■ Discover...
a simple, highly effective by Dave Ulrich, Steve Kerr, and Ron Ashkenas
change program that has with Debbie Burke and Patrice Murphy
created huge payoffs for
General Electric, Home
Depot, Sears, and General A summary of the original text.
Motors.
is one of the most divided into seven parts:
■ Unleash...
Work-Out to break down
GE successful companies
in the world, with businesses • Section 1 outlines the
hierarchy, eleiminate use- ranging from jet engines to process and the benefits
less meetings, reduce costs,
speed cycle times, and
light bulbs to credit cards. Yet that it provides.
increase profits. every day, thousands of people
at GE face the same problems • Section 2 helps you
■ Build... that confront every other busi- prepare for the normal
a fast-paced innovative ness in the world. What's the skepticism and resistance
culture, develop leaders
who make quick decisions, best way to deliver products to change that is sure to
and create an empowered and services to our customers? arise.
workforce. How can we improve our mar-
gins? How do we stay ahead • Section 3 gives you an
■ Learn...
each of the steps and roles of the competition? How overview of the Work-Out
involved in planning, con- can we make the best use of process and how to plan a
ducting, and implementing a technology? How do we move basic Work-Out.
Work-Out at your business. quickly to new opportunities?
• Section 4 covers the five
■ Overcome...
resistance within the organi- GE does not have all the basic steps in conducting
zation by linking Work-Out answers to these questions, a Work-Out.
to other change programs, but it does have a superb
modeling the change, and process for confronting each • Section 5 covers the four
focusing on the payoff.
challenge — quickly, simply, basic elements of a suc-
and with the involvement of cessful Implementation.
■■ the people who will carry out
the decision. That process is • Section 6 shows you how
Volume 11, No. 7 (2 sections). Section 2, July 2002 called "Work-Out," because it to customize Work-Out to
© 2002 Audio-Tech Business Book Summaries 11-14. aims to get unproductive work fulfill your organization’s
No part of this publication may be used or reproduced
in any manner whatsoever without written permission. out of the system. operational needs.
To order additional copies of this summary, reference
Catalog #7022. Our discussion of Work-Out is • Section 7 gives you the
secrets to making Work- the way of doing business and GE Capital got rid of several
Out pay off for the long serving customers. After an time-consuming, money-
term by creating new introduction by the Chief wasting activities on the spot.
leadership and a new Financial Officer and an Expense reports no longer
culture. outside consultant, 40 people needed multiple approvals.
from various businesses and People could purchase
■■ functions within GE Capital approved software without
broke into small groups and going through the IT organiza-
1. WHAT IS WORK-OUT? started brainstorming. What tion. And a pre-deal process
procedures didn't make sense? was established to see if
Work-Out is a simple, Where were they wasting deals were worth pursuing,
straightforward methodology time? What activities added before going through all the
for cutting bureaucracy and the least value? analytics.
solving problems quickly. Its
genius lies in harnessing the The CFO expected very little At GE and at other firms that
intelligence of workers closest to come out of the discussion. use it, Work-Out is more than
to a problem. GE Capital was one of the a way to solve problems. It
company's fastest-moving, also creates an empowered
The problem can be of almost least bureaucratic units. It workforce, because employees
any type. Work-Out was first wasn't a tired old business can see that their ideas make
used at GE to harvest the low- with 100 years of outdated an impact. Work-Out also
hanging fruit of overgrown procedures. helps to build a culture that
bureaucracies by reducing is fast-moving, focused on
meetings, reports, and the But to his amazement, the innovation, and unconcerned
number of approvals needed to participants filled countless with boundaries. Plus, it
make a decision. It can also pages with notes about areas develops leaders who listen
be used to cut in half process that needed to be improved. to workers and make quick
times in product development, The facilitators asked the CFO decisions, rather than hiding
order entry, employee commu- to leave, and then the group in their offices. All of these
nications, and more. Or, divided the ideas into three benefits have given GE the
Work-Out can be used to bring themes: expense approvals foundation to roll out other
your people together with and reimbursements; materi- initiatives, such as Six Sigma
customers or suppliers to als purchasing; and deal and e-commerce.
develop innovative ways of analysis and approvals.
doing business together. The company has held literal-
The participants split into ly hundreds of thousands
No matter what the challenge, three groups to work on each of Town Meetings to make
the process remains the same, issue. They spent the rest of quick decisions on solutions to
with four basic steps: the day selecting the ideas problems. Welch and many
that were worth pursuing, and outside observers believe that
1. Bring together the people estimated how much money or the program is an unqualified
who know the issues best. time the change would save. success, but there are no hard
numbers to back up that
2. Challenge them to develop The next day, the three groups claim. Welch always refused
creative solutions. met together to discuss their to measure Work-Out, saying
recommendations. After it would die if he started to
3. Make yes or no decisions lunch, the CFO returned, measure and track the results
on the solutions immedi- along with several senior GE it was producing. Instead, he
ately in a public forum. Capital managers. For sever- said he would know "in his
al hours, all 40 participants gut" when it was working and
4. Empower people to carry talked through the ideas one when it was not.
out the solutions. at a time in a "Town Meeting."
After each idea was discussed, Many other companies that
For example, one of the earli- the CFO had to say "yes" or have used Work-Out have
est Work-Outs at GE Capital "no" immediately. measured the results. For
focused on finding and getting example, Zurich Financial
rid of procedures that get in As a result of this Work-Out, Services U.K. had used
2 AUDIO-TECH
hundreds of Work-Outs by the cost-cutting process. It also enable participants from dif-
end of 2001, involving half of can help companies grow ferent functions to gain a
the firm's 6,000 employees. along five key dimensions: broader systems perspective.
The verified savings over the First, it provides a focus on
preceding four years totaled stretch. By forcing people to Third, Work-Out encourages
more than $100 million, and rethink what they are doing, lateral thinking. With the
came from every part of the it also encourages them to process map as a starting
company. In addition, the stretch to a goal or challenge point, participants brainstorm
company achieved gains in that is significantly beyond ways to achieve the goal and
customer service, product their current performance sort through ideas, select the
development, and process level. For example, the best ones, and develop them
improvement. stretch goal might be to cut into recommendations. Work-
the time to develop a new Out begins by focusing on the
Whether its impact is mea- product in half, or to reduce "low-hanging fruit," the easy
sured at the gut level or on a the number of customer com- fixes that can be made to vir-
spreadsheet, Work-Out wins plaints by 30 percent in the tually any process. Every
over CEOs because it helps a next year. organization develops clutter
company return to the way in or inefficiency over time.
which decisions were made in Second, Work-Out helps Work-Out calls these
its early days. In small start- companies to develop systems RAMMPP inefficiencies, short
up organizations, the founders thinking. Work-Out encour- for reports, approvals, meet-
and "first-generation" employ- ages people to take a systems ings, measures, policies, and
ees have an entrepreneurial perspective because few really practices. These are relatively
spirit: They focus on the tasks substantial changes take place easy to find and remove.
that, with or without titles, in a vacuum. In the initial
need to be accomplished. design phase of Work-Out, The simple RAMMPP Matrix
the design team creates a illustrated below lists each
As the organization grows and comprehensive map that type of clutter and the places
develops, internal relation- describes the steps, processes, where it might exist, such as
ships became more defined and subprocesses involved in in your job, your department,
and formalized. This change producing current results. group, company, or in external
is necessary, but over time the This map enables the team to processes. For each RAMMP
structure becomes rigid and identify multiple points of activity, look for ways to get
inflexible, creating more focus for the Work-Out. In work out of it. For example,
"make-work" and impeding subsequent sessions, facilita- identify any meeting you
innovation, and turning the tors help cross-functional could eliminate, schedule
focus inward instead of out- teams create increasingly less often, finish in half the
ward, to the customer and the detailed process maps that time, hold with fewer people,
marketplace. This structure
leads to inefficiency and lower THE RAMMPP MATRIX
productivity.

Work-Out reverses this


process by forcing the organi-
zation back to an earlier
stage, where greater speed,
flexibility, innovative spirit,
and communication across
levels previously existed. It
breaks down barriers that
have slowly and imperceptibly
been built up over time,
often helping companies save
millions of dollars in costs.

It's important to keep in mind


that Work-Out is not just a
BUSINESS BOOK SUMMARIES 3
or replace with a more part, and is accountable to we'll discuss how you can
productive technology, such senior management for the recognize resistance and turn
as videoconferencing. success of the project. it into support.

In addition to generating Finally, the fifth way that ■■


ideas, Work-Out encourages Work-Out promotes growth is
quick but critical analysis of through injection of rapid- 2. OVERCOMING RESISTANCE
ideas to select the most worth- cycle change and fast
while ones for action. After decision making. Most Resistance to change is com-
each brainstorming session, companies move slowly. mon and understandable.
participants use a Pay-Off Managers insulate themselves Here are three of the most
Matrix, like the one illustrat- from failure by relying on staff typical responses:
ed below, to think through reports and analysts for advice
both impact and achievability. and support. For example, at 1. "Been there, done that."
It divides ideas by two crite- the old Allied Signal Most organizations have
ria: "small pay-off" vs. "big Automotive Sector of GE, tried change programs. If
pay-off," and "easy to imple- expenditures over $100,000 this is the problem, try to
ment" vs. "tough to imple- required 26 signatures. Each find rationale for adding
ment." The point is that an sign-off took an average of Work-Out as a way to
idea that might save millions four days, for a total of more create synergy among
is worthless if it is impossible than 21 weeks. At the Town existing initiatives. Work-
to implement. However, an Meeting, business leaders Out is not a program; it’s
idea that offers a small pay-off have to make decisions on a methodology. It is not
can make an impact if it can the spot, without the usual something you do; it’s
be put into action quickly. crutches of time, analysis, something you use to bust
staff opinions, and deep bureaucracy, reduce costs,
After lateral thinking, the consideration. Instead, the speed cycle times, or
fourth way in which Work-Out business leader must listen attack any other problem
helps companies grow is by carefully, ask questions, solicit that needs to be solved.
creating ownership. At the views from other people at
Town Meeting, each team can the meeting, and then make 2. "We’re fresh out of
present a recommendation a decision in a matter of heroes around here."
only if a member is willing to minutes, rather than months. Some executives may
be "owner" of it — to take think they lack the skills
responsibility for driving it Although Work-Out involves or personality to run a
through to completion. The people in finding problems Town Meeting. However,
owner mobilizes the resources, and fixing them, it is just there is no "right way" to
puts together a plan that as likely as any other change run a meeting, and no one
everyone agrees to, ensures program to run into resis- does it perfectly every
that everyone does his or her tance. In the next section, time. Remind them to
approach Work-Out as a
PAY-OFF MATRIX learning experience, one
in which they will get
better as they go along.
If necessary, the CEO
can co-lead the sessions
for the first couple of
managers to serve as a
model for all of the others
to follow.

3. "We’re too small to tack-


le such a monster." If
the time and costs
involved in scheduling a
Work-Out appear to be too
expensive, focus on the
4 AUDIO-TECH
pay-off. For example, a design team, and recruit- data given to team members.
GE Capital Work-Out ing a cross-functional People should be trained in
team recommended team. Work-Out methods to handle
sending automobile-fleet- the mandatory role of facilita-
leasing customers only • Conducting includes tors. Facilitators help the
summary reports of brainstorming, idea evalu- consultant prepare and run
monthly usage, not all the ation, recommendations, the sessions, attend prelimi-
backup detail. The team and approval. nary briefing sessions with the
calculated the cost savings lead facilitator, and meet with
from paper and postage, • Implementing includes team leaders to plan the team
computer time, and han- putting the ideas into sessions.
dling. The total savings practice with follow-up
amounted to several hun- evaluation. In addition, two optional roles
dred thousand dollars, can add value to the Work-Out
which paid for the Work- Now let's discuss the key process, but are not essential.
Out session many times Work-Out roles and the mem- Expert resources are special-
over. bers who perform them. We'll ists who are available during
also note which roles are sessions. The administrator
The best way to understand mandatory and which ones are organizes the logistics of the
any change process, including optional. event.
Work-Out, is to do it rather
than talk about it. One use- Among the most important Participation roles include
ful, fast, and simple exercise, leadership roles is that of team leaders and team mem-
"Wasteful Work Practices" the sponsor. This mandatory bers. Team leaders are
instinctively appeals to most role is filled by the senior responsible for preparing
employees. Each participant manager responsible for all their team for sessions. They
is given a worksheet on which the parts of the organization play critical roles in all phases
to list those parts of the daily involved in the Work-Out. of the Work-Out, providing
routine that don’t make sense. leadership and communication
Then, small groups are formed The sponsor may also fill the among teams and team
where participants share their role of the champion. As a members.
ideas and generate additional separate role, it is optional.
ideas for the Wasteful Work This individual represents the Team members are at the core
Practices list. Teams then sponsor at the sessions and of the entire process. They
select one or two of the best takes responsibility for the gather data, do some prelimi-
ideas and present them to the detailed preparation and fol- nary thinking, and are part of
business leader at the Town low-up to the session. The the team that solves the busi-
Meeting. This entire session champion also organizes the ness problem. There are four
can be completed in a few review sessions at 30, 60, and useful criteria to consider
hours. 90 days after the Town when selecting team members:
Meeting.
■■ 1. Is there a need for this
The facilitation roles particular expertise?
3. PLANNING A WORK-OUT include the Work-Out consul-
tant. An individual who has 2. Should the perspectives of
Before getting into the specifics experience with the process users, recipients, and cus-
of planning a full-blown Work- fills this mandatory role. He tomers be built into the
Out, let's outline the overall or she helps the sponsor team?
process and the key players. make initial decisions about
objectives and then works 3. Who are the potential
There are three main stages of with the sponsor and champi- implementers of
every Work-Out: on to design the session and recommendations?
organize logistics.
• Planning includes identi- 4. Will some members
fying the problem, getting The person who fills the benefit from participation?
upper-level organizational optional role of the analyst
support, organizing a plan helps compile and prepare the Identify likely participants by
BUSINESS BOOK SUMMARIES 5
function or position first, then sample time line for a full- advance planning can be mini-
by individuals whose opera- length Work-Out, and lists mal, because rapid feedback
tional categories are most like- which of the participants are will enable the teams to adjust
ly to further the goals of the involved at each stage. their activities as feedback
Work-Out. It often is helpful warrants.
to provide an organizational In brief, the planning stage
map around each problem to takes 30 days; the conducting An outline of the plan should
identify: stage requires one to three include a business problem,
days; and the implementing such as process improvement,
• Underlying processes and stage is spread over 90 days, and a written goal. It should
business functions it cuts punctuated by the three also describe the estimated
across. reviews. impact if the improvements
are achieved, as well as
• Related areas that are not Now let's discuss the several likely improvement
currently involved but planning stage in more opportunities or problem
could be. detail. Most companies face areas. For quick results, the
an identifiable problem with time line for implementation
• Who will benefit most an unidentifiable cause. Once should be 12 weeks or less.
from achievement of the that problem has been identi-
goal. fied, a senior leader forms a If you do not already know
small design team to agree which business problem to
• Who else may need to be on key issues to be tackled, pursue, there are five ways to
involved. identify participants, commu- generate a list of business
nicate expectations of what issues:
The final group who can play people will do at the event,
a role in Work-Out consists of and prepare business leaders 1. Identify performance gaps
Town Meeting participants. for their roles. in business plans, budgets
This group includes the or other key performance
senior-level management of The design team can also pull measures.
key functional areas; it is together data analyzing root
"optional," but it probably is causes and quantifying the 2. Interview customers, both
best to invite them to partici- potential gains in different internal and external,
pate in the meeting. areas of the Work-Out. If to clarify expectations
there is good communication and identify areas of
The figure below gives a among teams, the amount of improvement.

SAMPLE TIME LINE FOR A FULL-LENGTH WORK-OUT

6 AUDIO-TECH
3. Meet with managers of • Reduce average costs per welcome by the lead
other areas to review repair by more than 10 facilitator, an overview of
processes that cut across percent year over year. the methodology and the
functional boundaries. business issue to be
• Increase productivity by addressed, related back-
4. Benchmark performance 20 percent while main- ground information, and
against competitors. taining service standards. a warm-up exercise
intended to lighten what
5. Ask staff what is limiting • Reduce cycle time for can become a tense and
business results. client proposals by 50 per- anxious atmosphere. The
cent within four weeks. key ground rules and
An urgent and compelling principles include "no
issue makes the best Work- To double-check your SMART sacred cows," "no turf bat-
Out target. The following are goal, estimate its business tles," and "no blaming or
key criteria: impact. This is an estimate of complaining."
the bottom-line impact of your
• It is important and goal. For example, if the goal 2. The Small Group Idea
urgent, not just "nice to is to reduce average costs per Generation phase focuses
do." repair by 10 percent, the busi- on initial brainstorming.
ness impact can be calculated The teams identify the
• The topic is broad enough as follows: topics or opportunities the
for brainstorming, not a session can address by
single, well-defined task 1. Determine the average developing a list of top 10
or narrowly stated prob- cost per repair. ideas or possible opportu-
lem. nities for achieving the
2. Determine the average assigned goal. Once the
• The objective is an number of repairs per ideas have been written
improvement in actual month. down, ideas can be catego-
performance, not just an rized and prioritized using
improvement in an area 3. Multiply these two num- a Pay-Off Matrix, a pow-
like planning or training. bers by 12 and get the erful tool for prioritizing
average repair costs per ideas. As we've already
• Some aspects of the year. discussed, this matrix
improvement can yield allows you to compare
results right away. 4. Take 10 percent of this ideas based on whether
number. they are easy or tough to
The purpose of the planning implement, and whether
phase is to answer one ques- This business-impact number the pay-off is small or big.
tion: What is the objective of provides motivation and
this Work-Out in bottom-line excitement for Work-Out par- 3. The Gallery of Ideas step
business terms? For example, ticipants. It helps them see takes place when each of
"improving customer service" that they are not just engag- the small Work-Out teams
is too vague and unclear. But ing in an exercise, but helping share their preliminary
"implementing the predeter- to put some real money on the ideas with the rest of the
mined customer response bottom line. group at the session. Each
script" is too narrow. team lists its top 10 ideas
■■ on a wall of the meeting
The criteria for a Work-Out room. In the team presen-
goal can be expressed in a 4. CONDUCTING A WORK-OUT tations, the spokesperson
SMART goal statement. That explains the rationale for
is, it must be a Stretch goal. Now let's discuss how you can each idea. This should
It must be Measurable, conduct a Work-Out. There take about 10 minutes,
Achievable, Realistic, and are five basic steps in this followed by a 10-minute
Time-related. stage: question-and-answer
period. As teams’ presen-
Here are some SMART goals 1. The Introduction at the tations are made, partici-
from a variety of organizations: opening session includes a pants should resolve any
BUSINESS BOOK SUMMARIES 7
duplications or overlaps. recommendation. The them into real organizational
Then the group votes on action plan should include change and real results.
the ideas. Participants the name of the person on
use dots or stickers to vote the team who has volun- Four elements of Implement-
for the top four ideas from teered to "own" the plan. ation will produce success:
each team. At this point, the sponsor
and other managers First, make accountability
4. The Action should ask clarifying ques- stick. This means immediate-
Recommendations stage tions as needed to ensure ly confirming who will be
occurs next. For the bal- that they understand responsible for implementing
ance of the time leading what change is being rec- each recommendation at the
up to the Town Meeting, ommended, and to ensure grass roots level. It also means
the teams work to develop that the team has pulling together the team —
the four ideas that explored all the available the champion, team leader, and
received the most votes. options. The sponsor then recommendation owner — that
The teams can do "dry has to make a yes or no will be on the hook for the rec-
runs" of their presenta- decision on that recom- ommendation for the next
tions to anticipate the mendation. If the sponsor eight to 12 weeks.
tough questions and says no, he should explain
challenges they will face the reasoning behind his Second, at the end of the Town
about the risks and decision to the team. Meeting the sponsor needs to
payouts. During this Occasionally, the sponsor move immediately into work
phase, the team should may need to ask the team planning and to confirm
consider the following to do more research before assignments so that there is
questions to strengthen receiving an unqualified one individual accountable for
each recommendation or yes. If this is the case, the each idea. All of the action
action plan: sponsor must set a specif- steps must be assigned and
ic, short time frame for given deadlines. All recom-
• What is the probability completing the work and mendation owners should have
of success? Are there making a final decision. a stake in the business issue
other ways to increase This is not an excuse to being addressed. At several
it? put off a decision for GE units, a two-hour work
months. The sponsor planning session takes place
• Can the plan be tracked might say, "I want to say immediately after the Town
and measured? yes, but we really need the Meeting — before people can
financial implications to get back to their offices or run
• What are the likely be spelled out more clear- to airports. Anyone who can-
objections? ly. Get the numbers and not stay is given some brief
let's meet tomorrow at instructions about putting
5. At the Town Meeting, 8:00, and if they look good, together a work plan with an
each team will present its my decision will definitely assignment that is due in 24
recommendations and be yes." hours.
action plans to the spon-
sor, champion, and other ■■ The third aspect of implemen-
key business managers. tation is the challenge of
The sponsor will then 5. IMPLEMENTING WORK-OUT managing the organiza-
make decisions on the RECOMMENDATIONS tion’s cycle of energy. People
spot. The presentation will encounter all forms of
includes the recommenda- Let's assume that you've held resistance to change, some
tion, the business issue your Work-Out and you've subtle, some not, as they set
that it addresses, the approved an ambitious list of about their assignments.
financial pay-off and recommendations. This is not Sponsors and champions
other benefits, the risks, the end of a successful Work- should support and coach rec-
the way that the results Out; it's the beginning. The ommendation owners through
will be tracked and mea- power of Work-Out lies in tak- these difficulties.
sured, and the action ing the ideas unleashed in the
plan for implementing the Town Meeting and translating Finally, the fourth element is
8 AUDIO-TECH
to provide management champion and the sponsor. If the breakage situation. The
oversight and support. any obstacles have emerged, second Work-Out session
Some goals have a clear scope they can be removed before the identified several solutions
and narrow focus. Others don’t project stalls. over two days, among them the
and, instead, involve making recommendation to use inflat-
major progress on a complex The implementation phase is able airbags to fill the spaces
issue in a short amount of the key to the success of Work- between boxes that caused
time. For example, a program Out. No one will want to do loads to shift and bulbs to
suggested at Armstrong World another Work-Out if the recom- break. Relatively simple
Industries was far too large to mendations approved at the changes in pallet configura-
be implemented on a nation- Town Meeting are not imple- tions — to make them conform
wide basis within 12 weeks. mented successfully. When all more to the configuration of
Instead, the sponsor suggested of the participants perform forklifts — also were recom-
that the recommendation their roles well, the company mended to reduce breakage. In
owner focus on one or two begins to develop a sense of all, the teams identified mil-
major metropolitan areas first, infinite possibility. lions of dollars worth of sav-
and get the program up and ings at the concluding session
running there. ■■ and then implemented them
over the next several months.
To implement the recommen- 6. CUSTOMIZING WORK-OUT
dations, you also need to select FOR YOUR ORGANIZATION Another key variable is dis-
the implementation team tance. One example is from
members. The team needs Of course, not every company SmithKline Beecham, which
people who: is like GE, so it is essential to had several locations scattered
customize Work-Out to your across the U.S. and the U.K.
• Are close enough to the own organization, situation, The issue was structural
front line to understand and problems. This entails reorganization after a merger.
the technical aspects of the considering several key vari- The first stage consisted of a
subject matter. ables and deciding how to two-day session of the top 25
make constructive adaptations. managers. A number of possi-
• Have the potential to chal- ble organizational designs were
lenge the status quo and One variable is time. Some considered, and the team
be innovative and creative. problems are too complex to be approved one overall design.
handled in a three-day session, Stage two was a virtual Work-
• Are likely to participate much less a one-day blitz. In Out in which people were
actively and effectively in such cases, an "extended" solicited for their ideas on
a team without trying to Work-Out may be used. GE organizational design and how
dominate it. Lighting used this approach to that design might reduce costs.
reduce product breakage. Each unit in the overall group
• Are strongly oriented was given a month to accom-
towards action and results. The problem was that nobody plish this. At the end of the
really understood the problem month, each manager froze the
Setting up the action plan of breakage or how well the local Lotus Notes used for the
involves all of the usual proce- potential solutions would work. virtual session and developed a
dures. Assign accountability Thus, the first stage was a set of recommendations about
for each step, determine the one-day "getting organized" next steps.
time frame for each activity, Work-Out. Cross-functional
and test the plan for complete- teams, each focused on a prod- Besides time and distance, the
ness. Then the recommenda- uct category, met to review third major way to create vari-
tion owner reviews the plan existing data and discuss possi- ations on Work-Out is to "flex
with the champion and, if nec- ble issues. The recommenda- the focus." That is, shape the
essary, enlists the champion’s tion was to develop a specific process around three different
help in smoothing the way for work plan for the next few types of topics and goals:
implementation. During the weeks on how to find out what
reviews, at 30, 60, and 90 days, was really going on. 1. Bureaucracy-busting.
each recommendation owner
reports on his progress to the Teams went about researching 2. Process improvement.
BUSINESS BOOK SUMMARIES 9
3. Strengthening the value aspects of a business require 4. Creating a joint team with
chain. some processes to run parallel. a few people from each
New product introductions are company.
Despite the logical appeal, it an example. The processes can
isn’t always clear that busting be mapped to show points of 5. Holding the event and
bureaucracy has a measurable convergence and divergence starting the process.
pay-off. By "dollarizing" and critical points along the
bureaucracy — including some way. 6. Reviewing initial efforts
time to assess bottom line jointly and keeping the
impact — you can select ideas The teaching of process map- process going.
that make a real cost-cutting ping and process thinking can
contribution. be handled by incorporating a ■■
tutorial on how to do process
Bureaucracy is often the result mapping into the agenda. An 7. LONG-TERM PAY-OFF:
of the addition of hundreds example of a process map for CREATING THE LEADERS AND
of small procedures that drain buying a car is shown below. THE CULTURE
time, energy, and profitability.
By "blitzing" — encouraging As process thinking becomes Transforming an organization
lots of ideas for small improve- embedded in your company, to make it more competitive,
ments that can be evaluated the natural next step is to con- productive, or innovative in
and implemented easily — sider the overall context in any way means having better
enormous savings and which processes occur: the leadership. Those who have
efficiencies can be realized. value chain of suppliers and leadership roles in an organiza-
customers. Value chain Work- tion need to step forward and
Process improvement Work- Outs can be organized by: start a creative chain reaction
Outs go very nicely with that gets more and more
bureaucracy-busting because 1. Sketching out the key people to change as well.
the rationale is that the com- constituents in your value
pany's people must continue to chain. Who are the most The starting point is to create
think about how they can do critical suppliers and the "leadership brand" — the
things better. That’s process significant customers? expectations of what leaders
improvement, which can come should achieve and how they
in "big ideas," but most often 2. Selecting a few partners should do it. At GE, the con-
come in small increments of with whom you can start a versation began about "speed,
continuous improvement. dialogue. simplicity, and self-confidence."
The Work-Out can be designed 3. Listening to their concerns
around the process and, by and understanding their To give the brand clear defini-
extension, the steps in the perspective. tion, a series of leadership-
process. Further, certain assessment and development
programs was developed. The
GE Capital program, called
PROCESS MAP EXAMPLE: BUYING A CAR "Leadership Challenge," was
based on a one-day workshop
and an assessment instrument
that translated the GE motto
into 20 specific behaviors.

During the meeting, managers


were given the results of the
assessment by subordinates,
peers, and bosses. This process
gave senior leaders a sharper
picture of the brand and what
they needed to do to realize it.
You can use four steps to
replicate the GE success in
leadership brand-building in
10 AUDIO-TECH
your own organization: pilot test at a site where commitment to Work-Out
you can start right away. in annual reports, speech-
1. Define, clarify, and com- The site should also be iso- es, media interviews,
municate the leadership lated from the rest of the employee videos, and so on.
brand to everyone with- business, so that leaders
in the firm. Make have the authority to enact 8. Align your actions with
employees aware of what recommendations and see your commitment. As a
they should expect from the results clearly. leader in the Work-Out
their leaders. initiative, make sure your
3. Use facilitators to show actions demonstrate
2. Assess managers the way. Three different the high level of your
against the leadership kinds of facilitators offer commitment. Passing the
brand. Identify the gap an unbiased view of program off to someone
between actual and progress. External facili- else won’t work.
desired performance. tators bring a constructive
perspective from outside 9. Reach the tipping point.
3. Invest in development the firm, cross-unit facili- Critical mass occurs when
processes to help man- tators bring the perspec- enough employees — typi-
agers learn to live with tive of different disciplines, cally 3 to 5 percent — have
the brand. Set out goals and internal facilitators experienced Work-Out so
and a time line for each are leaders within the that the ideas become
manager’s development firm. embedded in their words
program. and deeds. It is not a mat-
4. Build in enough sup- ter of the CEO’s personal
4. Reinforce the leadership port. Work-Out teams beliefs; it’s the instinctive
brand. Clear rewards need political support to response of employees that
and clear consequences work across functions and this is now "the way we do
reinforce the brand. boundaries. They also things."
Promote people who need administrative
demonstrate the brand support to handle details 10. Resource your Work-
and fire those who do not. like scheduling conference Outs. Give the sessions
rooms and setting up the kind of resources they
In addition to creating leaders, travel arrangements. need, such as facilitators;
Work-Out can also change your travel, meals, and facili-
company's culture to one that 5. Help managers get ties; and enough time for
is driven by speed and innova- ready to deploy Work- participants to be away
tion. Here are the 12 steps Out. Executives need from other work projects.
that you can use to embed the training to be able to
Work-Out process into your coach, mentor, and make 11. Share the knowledge
culture: decisions in the new Work- you gain. The purpose of
Out environment. Work-Out is to generate
1. Approach Work-Out as new and better ideas —
an adjective rather 6. Set specific delivery innovative methods, ways
than as a noun. As goals. Work-Out moves to increase productivity,
Work-Out moves from fastest when the CEO lays cut costs, and so on. These
pilot to program stage, down a goal for it, such as ideas might be useful to
remember that it is not a "You will run five work- other parts of the organi-
business goal; it is a better shops this month," or "You zation that did not
and faster way to reach will spend 10 percent of participate in the Work-
your business goals. your time in Work-Out Out. One firm created
activities." a Web site to post the
2. Stack the deck for suc- ideas from all of its Work-
cess. Begin at a comfort 7. Publicize the successes. Outs for everyone in the
level that will enable you The best way to get buy-in company to read.
to demonstrate the bene- from skeptics is to prove
fits to be gained. Often how well it works. Jack 12. Apply Work-Out to
that means starting with a Welch highlighted his other programs. When
BUSINESS BOOK SUMMARIES 11
management shifts to easily get started without lots decade, and it is a core part of
other initiatives, Work- of planning and structure. its culture.
Out's approach to engag-
ing employees should be Just bring people together to Moreover, with every Work-Out
used to make the new work on a common problem. your company completes, it will
changes happen. For Then, allow them to recom- become clearer that it is not a
example, when GE mend specific changes to make business fad. It is a set of
launched Six Sigma, it their jobs easier. Share the principles, tools, and actions
implemented the new ideas with a leader who makes that helps managers reach
tools and disciplines faster decisions on the spot. Then their goals faster by engaging
because employees and appoint owners for each idea employees. It can be the
managers were already to make sure that that the foundation of some of the
comfortable with dis- decisions are translated into most exciting and positive
cussing ideas and action. experiences that you will have
making quick decisions. in your company, and it can
Stay focused on business goals, provide the cost savings that
■■ ensuring that Work-Out is a ensure your business will
means to those goals, not an survive any competitive threat.
s we've discussed, end in itself. Expect resis-
A Work-Out is based on a
remarkably simple series of
tance, and turn it into support.
Over time, Work-Out will no ■■
steps that can yield some longer seem new. GE has used
extraordinary results. You can Work-Out for more than a

ABOUT THE AUTHORS

Dave Ulrich is a professor of business administration at the University of Michigan School of Business and the
author of the best-selling Human Resource Champions, Results-Based Leadership, and The HR Scorecard.

Steve Kerr is Chief Learning Officer and a Managing Director of Goldman Sachs. he was previously Vice
President-Leadership Development and Chief Learning Officer for General Electric, with responsibility for GE’s
renowned Leadership Development Center at Crotonville.

Ron Ashkenas is a managing partner of Robert H. Schaffer & Associates. A leading consultant to CEO’s on orga-
nizational transformation, he also is the senior author (with Ulrich, Kerr, and Todd Jick) of The Boundaryless
Organization.

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The GE Work-Out summarized by arrangement with The McGraw-Hill Companies, Inc., from The GE Work-
Out: How to Implement GE’s Revolutionary Method for Busting Bureaucracy and Attacking Organizational
Problems — Fast! by Dave Ulrich, Steve Kerr, and Ron Ashkenas, with Debbie Burke and Patrice Murphy.
Copyright © 2002 by The McGraw-Hill Companies, Inc.

825 75th Street, Suite C, Willowbrook, Illinois 60527


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