Organisational Change Management Volume 1

Framework 18 The GE Change Framework

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(The 7 stages from a basic workout to 6 Sigma quality)

Introduction

"...nothing compares to the effectiveness of 6 sigma when it comes to improving a company's operational efficiency, raising its productivity and lowering its costs. It improves designer processes, gets products to market faster with fewer defects, and builds customer loyalty......it has the capacity to develop a cadre of great leaders..."

Jack Welsh as quoted by Jack Welsh et al, 2005

Furthermore,

"...the big myth is that Six Sigma is about quality control and statistics. It is that - but it's a helluva lot more. Ultimately, it drives leadership to be better by providing tools to think through tough issues. And Six Sigma's core is an idea that can turn a company inside out, focusing the organisation outward on the customer"In the first year, we took six Sigma all over the company to attack costs, improve productivity and fix broken processes. One business, admittedly an extreme "by using six Sigma"..increased the capacity of their factories, eliminating the need for any capacity investment for a decade..."

Jack Welch as quoted by Jack Welch et al, 2001

Need to understand the importance in Six Sigma of measurement and resultant rewards/recognition, ie what gets measured and rewarded, gets done.

Need to appreciate the difference between average and variation, ie 2 sets of data could have the same average, such as 5, but different variations, such as 1 and 3. Need to have improvements that better both the average and the variance, ie span.

1 Workouts and "RAMMP" matrix

GE staff representing a diagonal slice of the organisation, (ie people across functions and levels) were involved in the workout meetings. These meetings encouraged a mindset for continual questioning, and those people closest to the work were encouraged to generate ideas for productivity improvement - the best ideas came from this group

RAMMP - revolves around one predominant question:

Do we really need to keep doing these things the same way?

i. Reports - is this report really necessary? Considerable time is taken to create and read reports, and who values them?

ii. Approvals - does this decision need to be approved by so many people? (It was found that some purchase orders needed 12 signatures for approval)

iii. Meetings - do we need to have this meeting? How to handle time-consuming meetings - did they accomplish anything? Was the time allocated too long? Could they be set up in a better way? - eg video-conferencing or tele-conferencing to avoid costly and time-consuming travel

iv. Measures - participants list all behaviours they want to see more of, and then draw a line between their existing measures and their behaviours that are desirable

v. Policies and procedures - do compensation plans, incentives, appraisal methods and other policies help people get work done more effectively? Or do they get in the way?

To get the change process going, GE started on the "low-hanging fruit" - the safest and easiest changes for management to accept and which would yield quick and comfortable success.

The old GE framework was "ask your manager and learn", while the new framework suggests "look everywhere - above you, below you, beside you, and outside. Your manager may be learning from you."

Payoff Matrix

One of the most valuable conversation techniques at RAMMP meetings is a simple matrix. People post their suggestions for improving "reports, approvals, meetings, measures, policies and procedures" on a 4-block grid:

 

Easy to accomplish

Difficult to accomplish

High impact on the organisation

1

2

Low impact on the organisation

3

4

2. Best Practices

The aim of this is to change the NIH (not invented here) culture. Initially people are sent outside of the business and the organisation to find the best ideas. Incentives are changed to reward people for sharing ideas instead of hoarding them.

Every time anything new is launched, others in the industry are studied. Numerous visits from customers, partners and other organisations are organised to check the best practices. Furthermore, the exchange of best practices at key business meetings from senior executives downwards is implemented

3 Process Maps

This involves increasing productivity by paying attention to processes using multi-functional teams to learn and use process mapping techniques. This revealed that as little as 5 to 15 % of activities added value to products and/or services. As a result, 2 questions were asked

- How would we love our processes to work?

- How can we get there?

Process mapping at GE uncovered more subtle, persuasive bottlenecks where people did not already perceive blockages. No one person or group has the full perspective. People are often stunned when they finally find out what happens after they hand projects over to the next part of the process.

Stretch goals in process mapping were introduced, ie goals big enough to force people to think differently, (eg cut our cycle time by 50 %). Most people will not change unless they feel a sense of crisis and the stretch goals engendered this.

4 Change Acceleration

This involves demystifying the subject of organisational change by providing a framework or framework along with a series of techniques for lenses that could be used to analyse an organisation

Some of the steps include

- understanding key techniques that could be used to drive successful change such as key stakeholders who must be on-board for a change process to succeed. In analysing this, the following questions are asked

i. How much does each stakeholder support this idea today?

ii. And why?

iii. Where do stakeholders need to be?

5 Strategic Initiatives

This involves setting up a series of in-depth initiatives which focus on highly significant issues, such as developing competencies and dealing with intractable problems.

6. Making the Customers Winners

This involves sharing some of the integrated leading-edge techniques with customers to help them improve the productivity of the operations

Six Sigma quality

This was developed by Motorola and used by GE. It is an integrated quality process that aims to achieve no more than 3.4 defects per million opportunities. The potential advantages are enormous, ie

- customers demanding higher quality

- competition has to move in this direction

- cost savings created

The Six Sigma methodology is known as DMAIC (define, measure, analyse, improve and control). It brings a rigour to identifying defects, correcting them, and controlling work processes as a whole. One key component is training which involves understanding DMAIC processes plus statistical and change management techniques.

The 3 key lessons learned from this integrated learning experience are

- Involve and engage all key stakeholders - be boundary-less and work to develop win-win solutions across levels, functions, businesses and organisations

- Identify and transfer best practices from inside and outside the organisation and integrate these initiatives with key human resource practices - you need to ensure that your staff are trained, measured and rewarded consistently with the organisation's objectives

- Set stretch goals - once staff members are forced to let go of the existing conventional wisdom, they can be creative and innovative, as they design new approaches. Constantly raise the bar.

(sources: Jacuie Vierling-Huang, 1999; Jack Welch et al, 2001)

 

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