One of the biggest mistakes large institutions can make is indulging the compulsion to "manage" their size. They become impressed with how big they are and at the same
time nervous about the need to control their size, to get their arms around it. This often leads to more layers, structure and bureaucracyand eventually stifled and
We see size differently. We understand its inherent limitationson speed and on clarity of communications, among other thingsand we fight every day to create the
quickness and spirit of a small company. But we appreciate the one huge advantage size offers: the ability to take big swings, big risks, and to live outside the
technology envelope, to live in the future. Size allows us to invest hundreds of millions of dollars in an enormously ambitious program like the GE90, the world's
highest-thrust jet engine, and the "H" turbine, the world's highest-efficiency turbine generator. Size allows us to introduce at least one new product in every segment,
every year, in medical diagnostics, or to spend hundreds of millions on new plastics capacity, or to continue to invest in a business during a down cycle, or to make
over 100 acquisitions a year, year after year.
Our size allows us to do this knowing that we don't have to be perfect, that we can take more risks, knowing that not all will succeed. That's because our sizefar from
inhibiting innovation, the conventional stereotypeactually allows us to take more and bigger swings. We don't connect with every one, but the point is, our size allows
us to miss a fewwithout missing a beat.
We cultivate the hatred of bureaucracy in our Company and never for a moment hesitate to use that awful word "hate." Bureaucrats must be ridiculed and removed. They
multiply in organizational layers and behind functional wallswhich means that every day must be a battle to demolish this structure and keep the organization open,
ventilated and free. Even if bureaucracy is largely exterminated, as it has been at GE, people need to be vigilanteven paranoidbecause the allure of bureaucracy is
part of human nature and hard to resist, and it can return in the blink of an eye. Bureaucracy frustrates people, distorts their priorities, limits their dreams and
turns the face of the entire enterprise inward.
|...our sizefar from inhibiting innovation,
the conventional stereotypeactually allows to take more and bigger swings. We don't connect with every one,
but the point is, our size allows us to miss a fewwithout missing a beat.
In a digitized world, the internal workings of companies will be exposed to the world, and bureaucracies will be seen by all for what they are: slow, self-absorbed,
customer insensitiveeven silly.
Self-Confidence, Simplicity and Speed
One leads to the other. Self-confidence is the indispensable leadership characteristic. It can come from early family life, from sports, from school success, or it can
be acquired through opportunities to lead, to take business risks, to be challenged and to win. It is the obligation of every leader to give everyone the business
challenges that provide opportunities to develop personal self-confidence. We see, day after day, people's livesand not just their business livesutterly transformed
by the self-confidence born of meeting big challenges.
Self-confidence in turn allows one to communicate simply and clearlywithout the business jargon, busy charts, convoluted memos and incomprehensible presentations that
insecure leaders use to mask their self-doubt. Leaders who lack self-confidence use their intelligence to make things more complex. Self-confident people use it to make
Simplicity clarifies communications and enhances the chance that everyone in the organization gets the same message. Those clear, simple messages energize people and
inspire them to action; thus simplicity leads to speed, one of the key drivers of business success.
It's about the four "E's" we've been using for years as a screen to pick our leaders. "Energy": to cope with the frenetic pace of change. "Energize": the ability to
excite, to galvanize the organization and inspire it to action. "Edge": the self-confidence to make the tough calls,
with "yeses" and "noes"and very few "maybes." And "Execute": the ancient GE tradition of always delivering, never disappointing.
And it's about the four "types" that represent the way we evaluate and deal with our existing leaders. Type I: shares our values; makes the numberssky's the limit!
Type II: doesn't share the values; doesn't make the numbersgone. Type III: shares the values; misses the numberstypically, another chance, or two.
None of these three are tough calls, but Type IV is the toughest call of all: the manager who doesn't share the values, but delivers the numbers; the "go-to" manager,
the hammer, who delivers the bacon but does it on the backs of people, often "kissing up and kicking down" during the process. This type is the toughest to part with
because organizations always want to deliverit's in the bloodand to let someone go who gets the job done is yet another unnatural act. But we have to remove these
Type IVs because they have the power, by themselves, to destroy the open, informal, trust-based culture we need to win today and tomorrow.
|In a digitized world, the internal workings of companies will be exposed to the world, and bureaucracies will be seen by all for what they are: slow, self-absorbed,
customer insensitiveeven silly.
We made our leap forward when we began removing our Type IV managers and making it clear to the entire Company why they were asked to leavenot for the usual "personal
reasons" or "to pursue other opportunities," but for not sharing our values. Until an organization develops the courage to do this, people will never have full
confidence that these soft values are truly real. There are undoubtedly a few Type IVs remaining, and they must be found. They must leave the Company, because
their behavior weakens the trust that more than 300,000 people have in its leadership.
We've always had great advanced management training programs at GE. We also have terrific early-career programs in financial management, engineering, manufacturing,
the audit staff and others. However, because of our diversity we've never had a truly early-career generic program that would develop leaders for all our functions.
All of our big, Company-wide initiatives have led us down serendipitous paths, and Six Sigma has proved no exception. It has, in addition to its other benefits, now
become the language of leadership. It is a reasonable guess that the next CEO of this Company, decades down the road, is probably a Six Sigma Black Belt or Master
Black Belt somewhere in GE right now, or on the verge of being offeredas all our early-career
(3-5 years) top 20% performers will bea two-to-three-year Black Belt assignment. The generic nature of a Black Belt assignment, in addition to its rigorous process
discipline and relentless customer focus, makes Six Sigma the perfect training for growing 21st century GE leadership.