Dear All HR Professionals, I would like to know that what are the basic steps to perform Organisational Development Activities in Old Organisations.
A comprehensive Approach is required for the same.Since I am trying to learn this thing.
Waiting for positive replies in this forum.
Regards
Ashok kumar
From India, Gurgaon
8A comprehensive Approach is required for the same.Since I am trying to learn this thing.
Waiting for positive replies in this forum.
Regards
Ashok kumar
From India, Gurgaon
APPROACH TO ORGANIZATION DEVELOPMENT
Organization Development (OD) is the process of improving organizations.
The process is carefully planned and implemented to benefit the organization,
its employees and its stakeholders.
The client organization may be an entire company or a smaller part of a larger organization.
The change process supports improvement of the organization or group as a whole .
The client and OD practitioner work together to gather data, define issues and
determine a suitable course of action. The organization is assessed to create an
understanding of the current situation and to identify opportunities for change
that will meet business objectives.
===============================================
*review the current business situation.
*conduct a PEST analysis [ political/economic/social/technology ]
*Review the INDUSTRY trend.
*conduct a SWOT analysis. [strengths, weaknesses, opportunities, threats] of the company.
*develop a GAP analysis, which could include
Action Research is a process which serves as a model for most OD interventions. Action Research is a "process of systematically collecting research data about an ongoing system relative to some objective, goal, or need of that system; feeding these data back into the system; taking actions by altering selected variables within the system based both on the data and on hypotheses; and evaluating the results of actions by collecting more data." The steps in Action Research are :
Entry. This phase consists of finding needs for change within an organization. It is also the time to quickly grasp the nature of the organization, identify the appropriate decision maker, and build a trusting relationship.
Start-up and contracting. In this step, we identify critical success factors and the real issues, link into the organization's culture and processes, and clarify roles for the consultant(s) and employees. This is also the time to deal with resistance within the organization. A formal or informal contract will define the change process.
Assessment and diagnosis. Here we collect data in order to find the opportunities and problems in the organization.
This is also the time for the consultant to make a diagnosis, in order to recommend appropriate interventions.
Feedback. This two-way process serves to tell those what we found out, based on an analysis of the data. Everyone who contributed information should have an opportunity to learn about the findings of the assessment process (provided there is no apparent breach of anyone's confidentiality.) This provides an opportunity for the organization's people to become involved in the change process, to learn about how different parts of the organization affect each other, and to participate in selecting appropriate change interventions.
Action planning. In this step we will distill recommendations from the assessment and feedback, consider alternative actions and focus our intervention(s) on activities that have the most leverage to effect positive change in the organization. An implementation plan will be developed that is based on the assessment data, is logically organized, results- oriented, measurable and rewarded. We must plan for a participative decision-making process for the intervention.
Intervention. Now, and only now, do we actually carry out the change process. It is important to follow the action plan, yet remain flexible enough to modify the process as the organization changes and as new information emerges.
Evaluation. Successful OD must have made meaningful changes in the performance and efficiency of the people and their organization. We need to have an evaluation procedure to verify this success, identify needs for new or continuing OD activities, and improve the OD process itself to help make future interventions more successful.
Adoption. After steps have been made to change the organization and plans have been formulated, we follow-up by implementing processes to insure that this remains an ongoing activity within the organization, that commitments for action have been obtained, and that they will be carried out.
Separation. We must recognize when it is more productive for the client and consultant to undertake other activities, and when continued consultation is counterproductive. We also should plan for future contacts, to monitor the success of this change and possibly to plan for future change activities.
It would be nice if real OD followed these steps sequentially. This rarely happens. Instead, the consultants must be flexible and be ready to change their strategy when necessary. Often they will have to move back and repeat previous steps in light of new information, new influences, or because of the changes that have already been made.
*develop a GAP analysis, which could include
-functions like marketing, sales, distribution, finance,administration, human resources etc.
-PROCESSES like core business, enabling business,supporting business etc
-SYSTEMS like planning, budgeting, compensation, quality, training, performance management.
* products
*service
etc etc etc.
===============================================
clarifying vision, strategies, values and leadership team culture
developing comprehensive growth plans tailored to unique needs
identifying the client's current life-cycle stage to determine timing for creating structure, procedures, process maps, etc.
organizing critical success factors including metrics that will drive success for the company .
conducting needs assessment for training and staff development
providing custom leadership development programs to move an organization to the next phase in its life cycle (from start-up to stabilization for example)
assisting the organization to navigate rapid change while staying focused on critical success factors
===============================================
OD practitioner work with all levels of employees. Examples include:
· CEO or Vice Presidents -- during changes in corporate strategy, mission, leadership development, technology or organization structure.
· Middle Managers -- within specific areas or across functions to identify sources of conflict and barriers to performance, or help build a broader vision and more effective leadership.
· First-line supervisors -- improve operations and employee involvement, establish high involvement work teams, improve organizational communication, install statistical process control, develop supervisory training or new reward systems.
· Line workers -- to facilitate job redesign improved performance, teambuilding or improvement in the work environment.
===============================================
WHAT YOU CAN DO TO MAKE ''OD'' HAPPEN
Vision & Strategy Development
Change Management
Executive and Leadership Coaching & Development
Organization Culture Assessment & Development
Innovation and Creativity Practices
Communication, Influence, and Conflict Resolution Skills
Employee Development & Coaching
Performance Management & Career Planning
Process Management/Improvement
Development of Self-Directed/Shared Leadership Teams
Meeting Effectiveness & Group Facilitation
Goal Setting
Team Building
Organization restructuring
T Q M
etc.
HOPE THIS IS USEFUL TO YOU
REGARDS
LEO LINGHAM
From India, Mumbai
Organization Development (OD) is the process of improving organizations.
The process is carefully planned and implemented to benefit the organization,
its employees and its stakeholders.
The client organization may be an entire company or a smaller part of a larger organization.
The change process supports improvement of the organization or group as a whole .
The client and OD practitioner work together to gather data, define issues and
determine a suitable course of action. The organization is assessed to create an
understanding of the current situation and to identify opportunities for change
that will meet business objectives.
===============================================
*review the current business situation.
*conduct a PEST analysis [ political/economic/social/technology ]
*Review the INDUSTRY trend.
*conduct a SWOT analysis. [strengths, weaknesses, opportunities, threats] of the company.
*develop a GAP analysis, which could include
Action Research is a process which serves as a model for most OD interventions. Action Research is a "process of systematically collecting research data about an ongoing system relative to some objective, goal, or need of that system; feeding these data back into the system; taking actions by altering selected variables within the system based both on the data and on hypotheses; and evaluating the results of actions by collecting more data." The steps in Action Research are :
Entry. This phase consists of finding needs for change within an organization. It is also the time to quickly grasp the nature of the organization, identify the appropriate decision maker, and build a trusting relationship.
Start-up and contracting. In this step, we identify critical success factors and the real issues, link into the organization's culture and processes, and clarify roles for the consultant(s) and employees. This is also the time to deal with resistance within the organization. A formal or informal contract will define the change process.
Assessment and diagnosis. Here we collect data in order to find the opportunities and problems in the organization.
This is also the time for the consultant to make a diagnosis, in order to recommend appropriate interventions.
Feedback. This two-way process serves to tell those what we found out, based on an analysis of the data. Everyone who contributed information should have an opportunity to learn about the findings of the assessment process (provided there is no apparent breach of anyone's confidentiality.) This provides an opportunity for the organization's people to become involved in the change process, to learn about how different parts of the organization affect each other, and to participate in selecting appropriate change interventions.
Action planning. In this step we will distill recommendations from the assessment and feedback, consider alternative actions and focus our intervention(s) on activities that have the most leverage to effect positive change in the organization. An implementation plan will be developed that is based on the assessment data, is logically organized, results- oriented, measurable and rewarded. We must plan for a participative decision-making process for the intervention.
Intervention. Now, and only now, do we actually carry out the change process. It is important to follow the action plan, yet remain flexible enough to modify the process as the organization changes and as new information emerges.
Evaluation. Successful OD must have made meaningful changes in the performance and efficiency of the people and their organization. We need to have an evaluation procedure to verify this success, identify needs for new or continuing OD activities, and improve the OD process itself to help make future interventions more successful.
Adoption. After steps have been made to change the organization and plans have been formulated, we follow-up by implementing processes to insure that this remains an ongoing activity within the organization, that commitments for action have been obtained, and that they will be carried out.
Separation. We must recognize when it is more productive for the client and consultant to undertake other activities, and when continued consultation is counterproductive. We also should plan for future contacts, to monitor the success of this change and possibly to plan for future change activities.
It would be nice if real OD followed these steps sequentially. This rarely happens. Instead, the consultants must be flexible and be ready to change their strategy when necessary. Often they will have to move back and repeat previous steps in light of new information, new influences, or because of the changes that have already been made.
*develop a GAP analysis, which could include
-functions like marketing, sales, distribution, finance,administration, human resources etc.
-PROCESSES like core business, enabling business,supporting business etc
-SYSTEMS like planning, budgeting, compensation, quality, training, performance management.
* products
*service
etc etc etc.
===============================================
clarifying vision, strategies, values and leadership team culture
developing comprehensive growth plans tailored to unique needs
identifying the client's current life-cycle stage to determine timing for creating structure, procedures, process maps, etc.
organizing critical success factors including metrics that will drive success for the company .
conducting needs assessment for training and staff development
providing custom leadership development programs to move an organization to the next phase in its life cycle (from start-up to stabilization for example)
assisting the organization to navigate rapid change while staying focused on critical success factors
===============================================
OD practitioner work with all levels of employees. Examples include:
· CEO or Vice Presidents -- during changes in corporate strategy, mission, leadership development, technology or organization structure.
· Middle Managers -- within specific areas or across functions to identify sources of conflict and barriers to performance, or help build a broader vision and more effective leadership.
· First-line supervisors -- improve operations and employee involvement, establish high involvement work teams, improve organizational communication, install statistical process control, develop supervisory training or new reward systems.
· Line workers -- to facilitate job redesign improved performance, teambuilding or improvement in the work environment.
===============================================
WHAT YOU CAN DO TO MAKE ''OD'' HAPPEN
Vision & Strategy Development
Change Management
Executive and Leadership Coaching & Development
Organization Culture Assessment & Development
Innovation and Creativity Practices
Communication, Influence, and Conflict Resolution Skills
Employee Development & Coaching
Performance Management & Career Planning
Process Management/Improvement
Development of Self-Directed/Shared Leadership Teams
Meeting Effectiveness & Group Facilitation
Goal Setting
Team Building
Organization restructuring
T Q M
etc.
HOPE THIS IS USEFUL TO YOU
REGARDS
LEO LINGHAM
From India, Mumbai
Respected Sir,
That was a wonderful piece of information..
I have got a presentation on organisation development..it's regarding " The Transformation In GE by Welch "..can u plzz guide me what all to take into consideration..i want to make it precise and informative..coz i have only 30 mins for presentation..
Tanu.
From India, Mumbai
That was a wonderful piece of information..
I have got a presentation on organisation development..it's regarding " The Transformation In GE by Welch "..can u plzz guide me what all to take into consideration..i want to make it precise and informative..coz i have only 30 mins for presentation..
Tanu.
From India, Mumbai
TANUSHRI,
HERE IS SOME MATERIAL. YOU CAN MODIFY IT IN YOUR
OWN STYLE / LANGUAGE.
Welch formulated six principles which have guided the revolution:
1. Control your destiny, or someone else will.
2. Face reality as it is, not as it was, or as you wish it were.
3. Be candid with everyone.
4. Don't manage, lead.
5. Change before you have to.
6. If you don't have a competitive advantage, don't compete.
Following these principles, Welch has introduced a new management style at GE that reduces hierarchy and bureaucracy, empowers individuals, and seeks consensus based on shared corporate values. Yet the authors make clear that Welch does not limit the application of the principles to the running of GE. They are adaptable to a wide range of situations, from business to daily life.
--------------------------------------------------------------------------
TWENTY POINTERS OF MERIT FROM JACK WELCH TRANSFORMATION
MANAGEMENT.
ONE.- BUSINESS PLATFORM
Building and institutionalizing a business philosophy is critical in getting a company performing again. No business leader has employed the strategies of devising a business philosophy as adroitly as former GE chairman and CEO Jack Welch. To get the company on his side, to energize the company for the tasks ahead, he created a BURNING PLATFORM, wrapping it up in a single neat phrase: HE WANTED GE BECOME "THE MOST COMPETITIVE COMPANY ON EARTH."This was the catchphrase around which everyone in the company congregated. Welch used the phrase often in speeches and interviews, whenever he wanted to encapsulate what he was trying to do at GE. It had the virtue of being succinct and serving as a rallying cry.
--------------------------------------------
TWO - PHILOSOPHY
In addition to his burning platform, Welch laid out a tightly focused BUSINESS PHILOSOPHY that essentially answered almost every question about how to conduct business. By adhering to that philosophy, call it the "Jack Welch Way of Doing Business," GE employees could implement the burning platform, It was a business philosophy that clearly emanated from the top, totally from the mouth of the CEO. Above all else, Welch's business philosophy offered a roadmap, or set of guidelines, to employees on how to make decisions.
-----------------------------------------------------
THREE – CRITICAL AREAS
Since the platform had to do with making GE more competitive than anyone else, Welch decided to focus on a number of critical areas: 1) GE and the marketplace: its businesses had to be the best in their markets; 2) efficiencies: GEs personnel and infrastructure had to be the most cost efficient possible; and 3) the talent pool: GE had to acquire and promote the best of the best.
--------------------------------------------
GE's business philosophy helped shape its transformation.
---------------------------------------------------------
FOUR - COMPETITIVE
Jack Welch had the good sense and vision to understand the need for the
Company to become more competitive.
------------------------------------------------------------
FIVE --Unique and High‑Spirited
On the day that he took over , Jack Welch told the board of directors and shareowners that he would like GE to be thought of 10 years down the road as a unique, high‑spirited, entrepreneurial company, known for its excellence. His goal was to make GE the most profitable, highly diversified company.
Note what he did not say: He did not say he wanted GE to be the biggest (i.e., as measured in terms of revenues); nor did he even dream of the company acquiring the largest market capitalization in the country. HE WANTED GE TO BE THE BEST.
-----------------------------------------------
SIX-BOTTOMLINE
Allowing himself to think only in the short term, Jack Welch was bent on preserving GEs bottom line. He had plenty of great ideas, as he would acknowledge in later years, but he knew that it was far too early to try such ideas out.
One of his ideas n important part of the business philosophy that he devised‑‑grew out of his early years as GEs CEO, when he was restructuring the company, downsizing people, and rationalizing factory operations .
------------------------------------------------------
SEVEN - Devising a Business Philosophy
In pursuit of growth, Welch wanted only those businesses that were number I or 2 in their markets in the GE portfolio.
As a result of this restructuring, the business could employ more aggressive tactics, such as in pricing, and have the resources to develop new products.
Without the Number 1, Number 2 strategy, Welch said, inflation would start to impede worldwide growth. There would be no room for a mediocre supplier of products and services. Successful companies in such a slow‑growth environment would be those that searched out and participated in growth industries and insisted on being number 1 or number 2 in every business they were in. They would need to be the number I or number 2 leanest, lowest cost, worldwide producers of quality goods and services, or they would have to have a definite technological edge in some market.
-----------------------------------------------------
EIGHT- FAILED STRATEGY
To Welch, keeping people in place who contributed little or nothing to the company represented a failed strategy. It was a major reason why a company under‑performed. GEs key competition in the early 1980s was coming from overseas enterprises that paid their employees less and achieved higher productivity rates. To compete successfully with such companies, GE had to upgrade equipment and cut employee rolls.
-----------------------------------------------
NINE- ORGANIZATION STRUCTURE
Another significant part of Welch's business philosophy was his frontal assault on the company's bureaucracy, DELAYERING (in his famous phrase) GEs management tiers. When Welch took over, each GE business had 9‑11 organizational layers; a decade later, that figure had been cut to 4‑6.
---------------------------------------------------
TEN - Quantum Leap
It was also part of Welch's business philosophy to stick to fundamentals. He put value on taking incremental steps. He had little faith in pursuing growth for growth's sake, At times during his first few years as CEO, he imagined what it would be like to take one big swing and increase the size of the company by 30, or 40, or even 50 percent; but, he felt it would be irresponsible to make a systematic strategy based on what he termed the "QUANTUM LEAP," acquiring other major businesses.
Four years after he took over, Welch was ready to shift gears; he was prepared to tackle one king‑sized growth initiative, stealthily pursuing the acquisition of the Radio Corporation of America (RCA). He termed this sudden, secretive approach to acquisition his "quantum leap."
------------------------------------------------
ELEVEN - Feet on the Street
However, building a business philosophy was not enough. Welch had to COMMUNICATE HIS IDEAS and make sure that employees were listening to arid adopting those ideas. He did not believe in videotaped presentations to thousands of employees. He preferred in‑person visits to GE installations across the United States and around the world. He spoke constantly before GE audiences. To make sure that he was spending enough time getting his message across, Welch refused most media interviews, rarely appeared on television, and never joined the boards of other companies. The most important means by which he communicated his business philosophy was in his annual letter to shareholders.
It was through these letters that GE personnel read, for the first time, about concepts such as
- 'Number 1, Number 2,"
- "boundaryiessness,
- "speed, simplicity, and selfconfidence,"
- and "unleashing the brains and energy of employees."
----------------------------------------------------------
TWELVE - EMPLOYEES’ EMPOWERMENT
Unleashing the brains and energy of GE employees became one of Welch's most serious challenges in the late 1980s and early 1990s. It stemmed from his desire to get the maximum productivity from his employee force. It took Welch some time before he realized that all the downsizing and restructuring that he had put GE through had taken a toll on the employees who remained. They were unsettled and in need of some nurturing from above. Relieved to survive the cuts, they still believed that they faced perilous futures as they confronted new plants, new bosses, and new jobs. Were their jobs truly safe now? They doubted it‑not with Jack Welch in charge.
Welch came to the conclusion that his employees needed to be empowered, and not because he felt sympathy for their unsettled feelings. He understood that he had to provide new motivation to employees to work harder. The secret was giving workers a feeling that they were "owners" of the business, not simply forgotten cogs in a faceless machine.
----------------------------------------------------------
THIRTEEN - Work Out
Welch came up with the solution: a company‑wide program he initiated and called "Work Out," It was an effort that aimed at capturing whatever good ideas employees had for improving the company's operations and implementing those
ideas. Over the next few years, every GE employee attended a Work Out session, where he or she was encouraged to propose ways to improve GE's operations. The head of the business unit where a Work Out session was occurring was required to appear in front of the group and decide on the spot to implement a select set of proposals. The program worked wonders. It got GE employees involved in the company's problems and challenges, and it forced everyone to look at the company's operations from top to bottom on a continuing basis.
----------------------------------------------------------
FOURTEEN - FOCUSING TOO MUCH ON ACCOMPLISHMENT
Another anchor of Welch's business philosophy was to AVOID FOCUSING TOO MUCH ON ACCOMPLISHMENTS. To be sure, he encouraged colleagues to celebrate the attaining of financial goals‑usually by going out and buying pizza for everyone (he did not believe in wasting money, either!). But on the whole, Welch had little love for milestones because he had little love for the past. He constantly put down the past as irrelevant to what he was doing‑at that moment! He could not change it. He was, of course, proud of what GE had achieved during his time at the helm, but he preferred discussing the present and the future. He believed firmly there was nothing he could do to change the past, so the most he would do was to thank everyone for having a great year and then get on to talking about the future.
--------------------------------------------------------------
FIFTEEN - STRETCH
His strategy of "stretch," another anchor of the Welch philosophy, was clearly designed to make the company more competitive. This strategy aimed at getting the best out of his employees. Always willing and eager to reinvent himself and his company, always trying to convert change into an opportunity, always on the prowl for what should be the next corporate‑wide initiative at GE, Welch simply did not sit still. He did not allow complacency. He wanted managers to "stretch" their financial goals and try to beat their budget objectives.
The first aspect of the stretch philosophy was to figure out performance targets that were achievable, reasonable, and within the company's capabilities. The key second aspect involved setting those sights higher‑far higher‑toward goals that seemed beyond reach, requiring superhuman effort to achieve.
-------------------------------------------------------
SIXTEEN - LEARNING CULTURE
Creating what Jack Welch called a "LEARNING CULTURE"became an important part of his business philosophy . Jack Welch liked to say that the operative assumption was that someone, somewhere, had a better idea. By sharing knowledge, GE businesses would gain a competitive edge, and that advantage would translate into higher earnings for the company.
He credited GEs learning culture with adding to the company's performance in several important ways:
-Operating margins
Inventory turns, a key measure of utilizing assets.
Company earnings.
-----------------------------------------------------------
SEVENTEEN - Six Sigma
WELCH SOUGHT TO MAKE GE"THE MOST COMPETITIVE COMPANY ON EARTH" by launching a company‑wide initiative to improve the quality of GE's products aprocesses.
Six Sigma
To improve things, Welch instituted the "SIX SIGMA" quality program. Six sigma is a measurement that enables a company to know how effective it is in getting rid of defects and variations from its business processes, products, and services. Literally, six sigma is reached when only 3.1 parts per million are defective.
--------------------------------------------------------
EIGHTEEN – WORLD CLASS
Many of Welch's strategies certainly paid off. By the year 2000, GE had achieved dominance or near‑dominance ‑in dozens of markets across the globe.
It was number 1 in the world
-in industrial motors (manufacturers of electric motors),
-medical systems (imaging and diagnostic equipment),
- plastics (plastics for various sectors),
- financial services (credit and credit card leasing),
-transport (locomotives and rail equipment),
- power generation (turbines for power stations),
- information services (company networks, electronic commerce, etc.),
- aircraft engines (aircraft jet and other engines),
and electric distribution equipment (control systems for industry).
NBC, which includes generalinterest programming and CNBC (business news), was ranked the number 1 U.S. network.
GE was number 2 in the world in lighting (makers of light bulbs and neon strips) and household appliances (stoves, refrigerators, washing machines, etc.).
--------------------------------------------------
NINETEEN - GLOBALIZATION
GLOBALIZATION was an important part of Welch's philosophy. He was ahead of his time; few U.S. businesses were going "globar when he pushed his own company‑wide initiative. Almost from the time he became chairman and CEO of GE, Welch was convinced that GEs competitors were increasingly non‑American, and that important
opportunities existed for the company to grow by taking GEs business overseas.
Jack Welch, saw globalization as a reality and as a great growth opportunity for GE.
---------------------------------------------------
TWENTY - SERVICES
Another aspect of the business that Welch nurtured for the sake of becoming more competitive was SERVICES‑ Welch understood that the great growth engine at GE was going to be his services business. This was a new concept.
The shift away from manufacturing and toward services started in the 1980s and gained great momentum in the 1990s. Though at first, the services side of GE was seen simply as a way of getting GE some extra business, in time, GE executives understood that a focus on services would enlarge the potential markets of GE businesses many times over.
The most important engine of GE's services growth‑indeed the key engine of growth for all of GE‑was GE Capital Services (GECS).
================================================== =========
Don't Leave Home Without It
Gradually, Welch's business philosophy emerged and was reflected in a laminated statement of values card that each GE employee was expected to carry at all times.
Following these values, Welch was implying, would help GE employees build "THE MOST COMPETITIVE COMPANY ON EARTH." Here are those values,
The latest version:
*GE leaders . . . always with unyielding integrity ... :
•Are passionately focused on driving customer success.
•Live six sigma quality . . . ensure that the customer is always its first beneficiary ... and use it to accelerate growth.
•Insist on excellence and be intolerant of bureaucracy.
•Act in a boundaryless fashion ... always search for and apply the best ideas regardless of their source.
•Prize global intellectual capital and the people that provide it ... build diverse teams to maximize it.
*See change for the growth opportunities it brings. . . for example, "e‑Business."
*Create a clear, simple, customer‑centered vision . . . and continually renew and refresh its execution.
*Create an environment of "stretch," excitement, informality, and trust . . . reward improvements ... and celebrate results.
*Demonstrate ... always with infectious enthusiasm for the customer ... the "4E's" of GE leadership: the personal Energy to welcome and deal with the speed ofchange ... the ability to create an atmosphere that Energizes others . . . the Edge to make difficult decisions ... and the ability to consistently Execute.
Few business leaders have had such a clear‑cut and tightly knit business philosophy as Jack Welch. Few leaders have thought about business with such care and devotion. By developing a Welch‑like business philosophy and a burning platform, executives stand a better chance of moving beyond business setbacks.
------------------------------------------------------------
In the past 17 years, GE has increased its market value from $12 billion to some $280 billion. For all that time of stupendous enrichment, the management training centre at Croton-on-Hudson (known as Crotonville) has been central to the company's vaunted management system. The three-week development course for high-fliers is so important in GE's scheme of things that CEO Jack Welch (who is even more vaunted than the system) goes to Crotonville every month to teach its70-odd students. His presence, of course, is no less important than what he teaches and preaches - and 'being there' helps him to solve six of the perennial problems of organisations.
1. How do you achieve visiblity, so that the leaders and the led really know each other?
2. How do you promote and promulgate a common set of ideas and principles?
3. How do you identify and bring forward the brightest and best of your people?
4. How do you get feedback and contributions from all layers of management?
5. How do you create an outfit that's open to change and development - the so-called 'learning organisation'?
6. How do you transfer 'best practice' between different parts of the organisation?
-------------------------------------------------------------------
INSISTING ON PERFORMANCE
As with any management method, though, it depends on how the mode is used. The same stipulation applies to teaching: in the right approach, the teaching and the doing are inextricably linked. What ties them together is the insistence on performance. As Thinking Managers has often urged, the essence of excellent management is closing the 'management gap' between potential and actual achievement. You can always 'talk' a great company. But delivering greatness is another matter -
to focus on 'customer-led quality' by model means:
1. Put the customer first
2. Synchronise flows
3. Build in quality
4. Involve people through teams
5. Ensure equipment is available and capable
6. Create functional excellence
7. Establish the right environment
8. Treat suppliers as partners
9. Use seven steps for problem-solving
10. Follow the continuous improvement process
HOPE THIS MATERIAL IS USEFUL TO YOU
REGARDS
LEO LINGHAM
From India, Mumbai
HERE IS SOME MATERIAL. YOU CAN MODIFY IT IN YOUR
OWN STYLE / LANGUAGE.
Welch formulated six principles which have guided the revolution:
1. Control your destiny, or someone else will.
2. Face reality as it is, not as it was, or as you wish it were.
3. Be candid with everyone.
4. Don't manage, lead.
5. Change before you have to.
6. If you don't have a competitive advantage, don't compete.
Following these principles, Welch has introduced a new management style at GE that reduces hierarchy and bureaucracy, empowers individuals, and seeks consensus based on shared corporate values. Yet the authors make clear that Welch does not limit the application of the principles to the running of GE. They are adaptable to a wide range of situations, from business to daily life.
--------------------------------------------------------------------------
TWENTY POINTERS OF MERIT FROM JACK WELCH TRANSFORMATION
MANAGEMENT.
ONE.- BUSINESS PLATFORM
Building and institutionalizing a business philosophy is critical in getting a company performing again. No business leader has employed the strategies of devising a business philosophy as adroitly as former GE chairman and CEO Jack Welch. To get the company on his side, to energize the company for the tasks ahead, he created a BURNING PLATFORM, wrapping it up in a single neat phrase: HE WANTED GE BECOME "THE MOST COMPETITIVE COMPANY ON EARTH."This was the catchphrase around which everyone in the company congregated. Welch used the phrase often in speeches and interviews, whenever he wanted to encapsulate what he was trying to do at GE. It had the virtue of being succinct and serving as a rallying cry.
--------------------------------------------
TWO - PHILOSOPHY
In addition to his burning platform, Welch laid out a tightly focused BUSINESS PHILOSOPHY that essentially answered almost every question about how to conduct business. By adhering to that philosophy, call it the "Jack Welch Way of Doing Business," GE employees could implement the burning platform, It was a business philosophy that clearly emanated from the top, totally from the mouth of the CEO. Above all else, Welch's business philosophy offered a roadmap, or set of guidelines, to employees on how to make decisions.
-----------------------------------------------------
THREE – CRITICAL AREAS
Since the platform had to do with making GE more competitive than anyone else, Welch decided to focus on a number of critical areas: 1) GE and the marketplace: its businesses had to be the best in their markets; 2) efficiencies: GEs personnel and infrastructure had to be the most cost efficient possible; and 3) the talent pool: GE had to acquire and promote the best of the best.
--------------------------------------------
GE's business philosophy helped shape its transformation.
---------------------------------------------------------
FOUR - COMPETITIVE
Jack Welch had the good sense and vision to understand the need for the
Company to become more competitive.
------------------------------------------------------------
FIVE --Unique and High‑Spirited
On the day that he took over , Jack Welch told the board of directors and shareowners that he would like GE to be thought of 10 years down the road as a unique, high‑spirited, entrepreneurial company, known for its excellence. His goal was to make GE the most profitable, highly diversified company.
Note what he did not say: He did not say he wanted GE to be the biggest (i.e., as measured in terms of revenues); nor did he even dream of the company acquiring the largest market capitalization in the country. HE WANTED GE TO BE THE BEST.
-----------------------------------------------
SIX-BOTTOMLINE
Allowing himself to think only in the short term, Jack Welch was bent on preserving GEs bottom line. He had plenty of great ideas, as he would acknowledge in later years, but he knew that it was far too early to try such ideas out.
One of his ideas n important part of the business philosophy that he devised‑‑grew out of his early years as GEs CEO, when he was restructuring the company, downsizing people, and rationalizing factory operations .
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SEVEN - Devising a Business Philosophy
In pursuit of growth, Welch wanted only those businesses that were number I or 2 in their markets in the GE portfolio.
As a result of this restructuring, the business could employ more aggressive tactics, such as in pricing, and have the resources to develop new products.
Without the Number 1, Number 2 strategy, Welch said, inflation would start to impede worldwide growth. There would be no room for a mediocre supplier of products and services. Successful companies in such a slow‑growth environment would be those that searched out and participated in growth industries and insisted on being number 1 or number 2 in every business they were in. They would need to be the number I or number 2 leanest, lowest cost, worldwide producers of quality goods and services, or they would have to have a definite technological edge in some market.
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EIGHT- FAILED STRATEGY
To Welch, keeping people in place who contributed little or nothing to the company represented a failed strategy. It was a major reason why a company under‑performed. GEs key competition in the early 1980s was coming from overseas enterprises that paid their employees less and achieved higher productivity rates. To compete successfully with such companies, GE had to upgrade equipment and cut employee rolls.
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NINE- ORGANIZATION STRUCTURE
Another significant part of Welch's business philosophy was his frontal assault on the company's bureaucracy, DELAYERING (in his famous phrase) GEs management tiers. When Welch took over, each GE business had 9‑11 organizational layers; a decade later, that figure had been cut to 4‑6.
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TEN - Quantum Leap
It was also part of Welch's business philosophy to stick to fundamentals. He put value on taking incremental steps. He had little faith in pursuing growth for growth's sake, At times during his first few years as CEO, he imagined what it would be like to take one big swing and increase the size of the company by 30, or 40, or even 50 percent; but, he felt it would be irresponsible to make a systematic strategy based on what he termed the "QUANTUM LEAP," acquiring other major businesses.
Four years after he took over, Welch was ready to shift gears; he was prepared to tackle one king‑sized growth initiative, stealthily pursuing the acquisition of the Radio Corporation of America (RCA). He termed this sudden, secretive approach to acquisition his "quantum leap."
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ELEVEN - Feet on the Street
However, building a business philosophy was not enough. Welch had to COMMUNICATE HIS IDEAS and make sure that employees were listening to arid adopting those ideas. He did not believe in videotaped presentations to thousands of employees. He preferred in‑person visits to GE installations across the United States and around the world. He spoke constantly before GE audiences. To make sure that he was spending enough time getting his message across, Welch refused most media interviews, rarely appeared on television, and never joined the boards of other companies. The most important means by which he communicated his business philosophy was in his annual letter to shareholders.
It was through these letters that GE personnel read, for the first time, about concepts such as
- 'Number 1, Number 2,"
- "boundaryiessness,
- "speed, simplicity, and selfconfidence,"
- and "unleashing the brains and energy of employees."
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TWELVE - EMPLOYEES’ EMPOWERMENT
Unleashing the brains and energy of GE employees became one of Welch's most serious challenges in the late 1980s and early 1990s. It stemmed from his desire to get the maximum productivity from his employee force. It took Welch some time before he realized that all the downsizing and restructuring that he had put GE through had taken a toll on the employees who remained. They were unsettled and in need of some nurturing from above. Relieved to survive the cuts, they still believed that they faced perilous futures as they confronted new plants, new bosses, and new jobs. Were their jobs truly safe now? They doubted it‑not with Jack Welch in charge.
Welch came to the conclusion that his employees needed to be empowered, and not because he felt sympathy for their unsettled feelings. He understood that he had to provide new motivation to employees to work harder. The secret was giving workers a feeling that they were "owners" of the business, not simply forgotten cogs in a faceless machine.
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THIRTEEN - Work Out
Welch came up with the solution: a company‑wide program he initiated and called "Work Out," It was an effort that aimed at capturing whatever good ideas employees had for improving the company's operations and implementing those
ideas. Over the next few years, every GE employee attended a Work Out session, where he or she was encouraged to propose ways to improve GE's operations. The head of the business unit where a Work Out session was occurring was required to appear in front of the group and decide on the spot to implement a select set of proposals. The program worked wonders. It got GE employees involved in the company's problems and challenges, and it forced everyone to look at the company's operations from top to bottom on a continuing basis.
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FOURTEEN - FOCUSING TOO MUCH ON ACCOMPLISHMENT
Another anchor of Welch's business philosophy was to AVOID FOCUSING TOO MUCH ON ACCOMPLISHMENTS. To be sure, he encouraged colleagues to celebrate the attaining of financial goals‑usually by going out and buying pizza for everyone (he did not believe in wasting money, either!). But on the whole, Welch had little love for milestones because he had little love for the past. He constantly put down the past as irrelevant to what he was doing‑at that moment! He could not change it. He was, of course, proud of what GE had achieved during his time at the helm, but he preferred discussing the present and the future. He believed firmly there was nothing he could do to change the past, so the most he would do was to thank everyone for having a great year and then get on to talking about the future.
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FIFTEEN - STRETCH
His strategy of "stretch," another anchor of the Welch philosophy, was clearly designed to make the company more competitive. This strategy aimed at getting the best out of his employees. Always willing and eager to reinvent himself and his company, always trying to convert change into an opportunity, always on the prowl for what should be the next corporate‑wide initiative at GE, Welch simply did not sit still. He did not allow complacency. He wanted managers to "stretch" their financial goals and try to beat their budget objectives.
The first aspect of the stretch philosophy was to figure out performance targets that were achievable, reasonable, and within the company's capabilities. The key second aspect involved setting those sights higher‑far higher‑toward goals that seemed beyond reach, requiring superhuman effort to achieve.
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SIXTEEN - LEARNING CULTURE
Creating what Jack Welch called a "LEARNING CULTURE"became an important part of his business philosophy . Jack Welch liked to say that the operative assumption was that someone, somewhere, had a better idea. By sharing knowledge, GE businesses would gain a competitive edge, and that advantage would translate into higher earnings for the company.
He credited GEs learning culture with adding to the company's performance in several important ways:
-Operating margins
Inventory turns, a key measure of utilizing assets.
Company earnings.
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SEVENTEEN - Six Sigma
WELCH SOUGHT TO MAKE GE"THE MOST COMPETITIVE COMPANY ON EARTH" by launching a company‑wide initiative to improve the quality of GE's products aprocesses.
Six Sigma
To improve things, Welch instituted the "SIX SIGMA" quality program. Six sigma is a measurement that enables a company to know how effective it is in getting rid of defects and variations from its business processes, products, and services. Literally, six sigma is reached when only 3.1 parts per million are defective.
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EIGHTEEN – WORLD CLASS
Many of Welch's strategies certainly paid off. By the year 2000, GE had achieved dominance or near‑dominance ‑in dozens of markets across the globe.
It was number 1 in the world
-in industrial motors (manufacturers of electric motors),
-medical systems (imaging and diagnostic equipment),
- plastics (plastics for various sectors),
- financial services (credit and credit card leasing),
-transport (locomotives and rail equipment),
- power generation (turbines for power stations),
- information services (company networks, electronic commerce, etc.),
- aircraft engines (aircraft jet and other engines),
and electric distribution equipment (control systems for industry).
NBC, which includes generalinterest programming and CNBC (business news), was ranked the number 1 U.S. network.
GE was number 2 in the world in lighting (makers of light bulbs and neon strips) and household appliances (stoves, refrigerators, washing machines, etc.).
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NINETEEN - GLOBALIZATION
GLOBALIZATION was an important part of Welch's philosophy. He was ahead of his time; few U.S. businesses were going "globar when he pushed his own company‑wide initiative. Almost from the time he became chairman and CEO of GE, Welch was convinced that GEs competitors were increasingly non‑American, and that important
opportunities existed for the company to grow by taking GEs business overseas.
Jack Welch, saw globalization as a reality and as a great growth opportunity for GE.
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TWENTY - SERVICES
Another aspect of the business that Welch nurtured for the sake of becoming more competitive was SERVICES‑ Welch understood that the great growth engine at GE was going to be his services business. This was a new concept.
The shift away from manufacturing and toward services started in the 1980s and gained great momentum in the 1990s. Though at first, the services side of GE was seen simply as a way of getting GE some extra business, in time, GE executives understood that a focus on services would enlarge the potential markets of GE businesses many times over.
The most important engine of GE's services growth‑indeed the key engine of growth for all of GE‑was GE Capital Services (GECS).
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Don't Leave Home Without It
Gradually, Welch's business philosophy emerged and was reflected in a laminated statement of values card that each GE employee was expected to carry at all times.
Following these values, Welch was implying, would help GE employees build "THE MOST COMPETITIVE COMPANY ON EARTH." Here are those values,
The latest version:
*GE leaders . . . always with unyielding integrity ... :
•Are passionately focused on driving customer success.
•Live six sigma quality . . . ensure that the customer is always its first beneficiary ... and use it to accelerate growth.
•Insist on excellence and be intolerant of bureaucracy.
•Act in a boundaryless fashion ... always search for and apply the best ideas regardless of their source.
•Prize global intellectual capital and the people that provide it ... build diverse teams to maximize it.
*See change for the growth opportunities it brings. . . for example, "e‑Business."
*Create a clear, simple, customer‑centered vision . . . and continually renew and refresh its execution.
*Create an environment of "stretch," excitement, informality, and trust . . . reward improvements ... and celebrate results.
*Demonstrate ... always with infectious enthusiasm for the customer ... the "4E's" of GE leadership: the personal Energy to welcome and deal with the speed ofchange ... the ability to create an atmosphere that Energizes others . . . the Edge to make difficult decisions ... and the ability to consistently Execute.
Few business leaders have had such a clear‑cut and tightly knit business philosophy as Jack Welch. Few leaders have thought about business with such care and devotion. By developing a Welch‑like business philosophy and a burning platform, executives stand a better chance of moving beyond business setbacks.
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In the past 17 years, GE has increased its market value from $12 billion to some $280 billion. For all that time of stupendous enrichment, the management training centre at Croton-on-Hudson (known as Crotonville) has been central to the company's vaunted management system. The three-week development course for high-fliers is so important in GE's scheme of things that CEO Jack Welch (who is even more vaunted than the system) goes to Crotonville every month to teach its70-odd students. His presence, of course, is no less important than what he teaches and preaches - and 'being there' helps him to solve six of the perennial problems of organisations.
1. How do you achieve visiblity, so that the leaders and the led really know each other?
2. How do you promote and promulgate a common set of ideas and principles?
3. How do you identify and bring forward the brightest and best of your people?
4. How do you get feedback and contributions from all layers of management?
5. How do you create an outfit that's open to change and development - the so-called 'learning organisation'?
6. How do you transfer 'best practice' between different parts of the organisation?
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INSISTING ON PERFORMANCE
As with any management method, though, it depends on how the mode is used. The same stipulation applies to teaching: in the right approach, the teaching and the doing are inextricably linked. What ties them together is the insistence on performance. As Thinking Managers has often urged, the essence of excellent management is closing the 'management gap' between potential and actual achievement. You can always 'talk' a great company. But delivering greatness is another matter -
to focus on 'customer-led quality' by model means:
1. Put the customer first
2. Synchronise flows
3. Build in quality
4. Involve people through teams
5. Ensure equipment is available and capable
6. Create functional excellence
7. Establish the right environment
8. Treat suppliers as partners
9. Use seven steps for problem-solving
10. Follow the continuous improvement process
HOPE THIS MATERIAL IS USEFUL TO YOU
REGARDS
LEO LINGHAM
From India, Mumbai
Respected Sir, Thanks a ton..That was a wonderful piece of information..now i can very well go ahead and start preparing for my presentation..thanks again.. Tanu.
From India, Mumbai
From India, Mumbai
Thanks A Lot, For All HR professionals Contributed to this specially mr Leo.It has really worked for me to plan for my further steps for doing the same. Regards Ashok kumar 09818646314
From India, Gurgaon
From India, Gurgaon
Hi, thnks for giving us the detailed insight of OD, looking for an article on "Consultant-Client relation" in OD. Thnks and regards, Hiten
From India, Pune
From India, Pune
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