General Electric’s Work-out process
General Electric’s Work-out process began in 1989, as an effort of Jack Welch, GE’s CEO, to transform the corporate culture. Welch plays important managerial roles in the whole process, namely: interpersonal, informational and decisional. Originally, Work-out process begun as an effort to eliminate waste and redesign processes to take out unnecessary work. In 1990, GE Annual General Meeting, Welch’s language and description for the Work-Out process was action oriented: “a relentless, endless company-wide search for a better way to do everything we do.”
Increasingly, the focus of Work-out process shifted to business processes, then to customers and suppliers, then to change acceleration. (Locke, 2002, p11) “By the late 1990s, Work-Out process had become the basis for the company’s push into Six Sigma and has since served as the foundation for GE’s work on digitization and e-business.” (Rath & Strong, 2000) Work-Out process was a communication tool that offered GE employees a dramatic opportunity to change their working lives (Crainer, 1999). This process captures the collective creativity of an organization on critical business issues and translates those ideas into action.
Work-Out process also explicitly aims to help an organization development through five key dimensions: (i) focus on “stretch”; (ii) development of “systems thinking”; (iii)
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The boss kicked things off by reviewing the business and laying out the agenda, the he or she left. The employees broke into groups, and aided by a facilitator, attached separate parts of problem” (Lowe, 1988). At the end, the boss returned to hear the proposed solutions. The boss had only three options: the idea could be accepted on the spot; rejected on the spot; or more information could be requested. If the boss asked for more information, he had to name a team and set a deadline for making a decision. Because of its simplicity and its effectiveness, it has become an important part of GE’s culture. In the following sections, factors contributing the success of Work-Out process and the possible negative consequences are discussed.
Factors contribute to the success of Work-out Process In order to implement the Work-out process successfully, there are several simple ground rules (Tichy & Charan, 1989) that enable the process to be quickly successful: Immediate management responses to recommendations – the leaders act as resource allocator in making and approve significant organizational decisions.
With the above general rules, in the course of action, both employees and managers from different functions and levels within GE worked for informal town meeting mentioned above to develop a close and friendly atmosphere, which not only busts through bureaucracy and frees up time, but also supports creative compliance. This means, within the town meeting, the revised process and systems are ones that everyone is prepared to commit to because they know they are the basis for effective working.
If no rework takes place, individuals often develop personal strategies to make systems and processes work for then. Such work-around may be effective for the individual, but are often sub-optimal for the whole, if not destructive. The process used allows people to focus on the things that are causing way them most frustration – “the problems” – but to tackle them in amore creative way than merely solving them and in line with the organizational strategy.