General Electric hasn't achieved its phenomenal success by using old-school management methods but by inventing a new way of doing business. Chairman Jack Welch is a true believer in employee participation. As he says, "We're going to win on our ideas, not by whips and chains."
Welch's approach is simple: "Take out the boss element." Successful managers need to tap into employees' ideas and then win employees the resources they need to make those ideas a reality. Welch has built a "boundaryless" organization and encourages employees "to work up and down the hierarchy, across functions and geographies, and with suppliers and customers" to find ways to streamline systems and work more efficiently.
Welch's management plan has three key parts:
1. The Work-Out This three-day session, which is conducted at a conference center or hotel, brings together 40 to 100 GE employees who are handpicked by managers from different levels and departments in the organization. On the first day, the boss roughs out an agenda--and then leaves. The group breaks into five or six teams. With an outside facilitator guiding the process, each team chooses a piece of the agenda to work on for the next day and a half. When each team finally presents its ideas, the boss must agree or disagree on the spot, or ask for more information.
Armand Lauzon, who is head of plant services at the GE Aircraft Engines factory in Lynn, Mass., said of the meeting, "I was wringing wet within half an hour. They had 108 proposals, and I had about a minute to say yes or no to each one." Lauzon agreed to all but eight ideas, which resulted in a combined savings over the next year of more than $200,000. For example, one Work-Out proposal resulted in the discontinuation of certain useless business forms at NBC, the GE-owned network, saving the company more than two million sheets of paper per year.
2. Best Practices Welch's management plan relies on benchmarking. One GE study of eight firms that had achieved faster productivity growth and had sustained that growth for 10 years or longer (including Ford, Hewlett-Packard, and Xerox) taught the company much about its own processes and measurements.
3. Process Mapping Process mapping identifies discrepancies between how people assume the work gets done and how it actually proceeds. It also streamlines GE's systems. For example, when the group that produces turbine shafts for jet engines mapped out its process, the exercise took more than a month, and the map filled the walls of a conference room. The group identified bottlenecks, which led to cutting production time in half and reducing inventory by $4 million.
1. Brainstorm ideas--Get employees together to solve the organization's problems, perhaps at a meeting like GE's Work-Out.
2. Get employees involved--Employee involvement leads directly to improved performance. People feel good about themselves and what they have achieved.
3. Allow free access to information--Become a "boundaryless" organization. Let employees go wherever they need to go and to interact with whomever can provide the information or the answers they need.