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Jack Welch's Work-Outs to Improve General Electric


Jack Welch was heralded by many as the greatest leader of his era. As CEO of General Electric from 1981 to 2001, he transformed it from a company known for appliances and lightbulbs to a multinational corporation that stretched into financial services and media as well as industrial products.


The seed of the Work Out idea was rooted during some of the listening sessions he had with GE’s Crotonville development campus. Listening to the managers talking about the changes that were happening in GE Welch realized that although he decreased the number of administrative levels and had financially improved results, the culture of GE screamed “bureaucracy.”


People were stuck in their comfort zones and were afraid to take risks. They made decisions slowly and carefully. Managers avoided responsibility.




The Work-Out makes people do things they would not do, like, for example, making decisions. People avoid being in a situation in which they have to make a decision since choices come with a portion of the risk.


The Work-Out forces people to stand in the center of a room and make a decision, learning to live with the intimidation that comes with the risk. It also makes things faster, and more efficient.


To implement the Work-Out successfully, everyone in your company must be involved. Usually, people will not want to Work-Out, since their comfort zones are much more comfortable than change. They will come up with a few objections, but you need to be persistent and patient enough to explain what the Work-Out involves, and let them see the results themselves.


Key Lessons from “The GE Work-Out”.


1.      Stretch

2.      Systems Thinking

3.      Lateral Thinking

4.      Empowerment and Accountability

5.      Fast Decisions


Stretch

Push yourself. Set higher goals than your mind lets you believe is reasonable. Stretch as much as you can.


Systems Thinking

Teach your employees to look at the entire process instead of just the endpoint. Saving costs is great, but maybe the thing you are trying to eliminate to achieve that is indispensable in some other unit of the company. Look at the whole picture and not its separate pieces.


Lateral Thinking

Brainstorm. There is no such thing as a stupid or weird idea. Create a culture of sharing suggestions and opinions.


Empowerment and Accountability

Let people lead. Put them in charge. Ideas are not enough – you need results. So let people not only make suggestions but make their ideas happen.


Fast Decisions

Speed is essential. Fast decisions mean fast action.


The GE Work-out, a brainchild of Jack Welch, was derived from Six Sigma techniques and transformed into KAIZEN Events, ultimately becoming a business strategy implemented by GE in the 1980s. The Kaizen event employs a comparable strategy and lays the groundwork for Quick-Wins that enable businesses to eliminate bureaucracy and expedite process improvement by engaging cross-functional teams, encompassing senior management and front-line team members.



Source: Welch, J 2001, "Straight From the Gut". Warner Books, USA.

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