Heart of Change with reference to Jack Welch and GE - Case Study Example

Heart of Change with reference to Jack Welch and GE Step 5: Empower Action Q Discuss what was new that you learned, Ideas that may have surprised you, and ideas that really resonated with you. The ideas that I learned and resonated with me are: 1. “Retooling” disempowering managers by giving them new jobs that clearly show the need for the change Managers are expected to lead by example. Departments and organizations benefit a long way if the manager has the vision and flexibility to change as per changing time. If a manager is not able to visualize the changing times it becomes necessary to sensitize him to see, feel and change accordingly. If we look at the role James Baughman played we can very well understand this. Jack Welch wanted to implement the culture of free and honest discussions in GE. For which he gave authority to James Baughman who with the help of consultants rolled out the most successful idea in GE. (Page 4 & 5) 2. Feedback that can help people make better vision related decisions With the help of open and honest system, feedback should result into more and more people getting converted in favor of change that is being introduced in the organization. In such case the organization needs to help an employee to align his individual goals with the organizational ones. If we look at the result of Best Practices Program in GE we can find out the impact it had on the thinking of the managers in the organization. It changed their fundamental approach to work. People who worked as corporate audit staff have admitted that they started looking at bigger scales and heights looking for more and more improvement areas (Page 5) 3. Finding individuals with change experience who can bolster people’s self confidence with we-can-you-too anecdotes Effectiveness of the change can be enhanced through an individual or a group of individuals who make the change physically happen in front of others. It triggers the feeling of “I did it and you can do it too”. Canadian GE operations that observed and followed practices of a New Zealand shipping firm became an example to follow. The change was so evident that the other GE branches made it a point to visit this unit and implement the changes accordingly. (Page 9) The successful implementation of these ideas in GE has given a new approach of effective change management. Q.2. Describe what you think would be difficult in the implementation of the step. The difficulties in implementing these steps would be: 1. Any change that needs to be initiated at the management level has to be associated with proper delegation of authority. Responsibility without adequate authority is of no use. It holds especially true at the managerial level. It is observed that managers or employees often generate ideas but fail to implement them as they do not have the power to implement nor the ideas are taken into consideration. In such situation the enthusiasm of an employee vanishes over a period of time. This becomes a point of danger and caution for an organization. Non generation of ideas leads to stagnation and eventually downfall. 2. Creation of a trustworthy environment takes a lot of time. Employee skepticism is usually the main ingredient which stops changes from getting implemented. Resistance to change comes from the comfort zones that are created. The problem gets aggravated when the management goes against the changes or doesn’t see changes as inevitable. The tool of see-feel-change is not an easy one to implement. It is impossible for a large scale organization to implement this on a case to case basis. It can also happen that the corporate level may see change as inevitable and absolute necessity but convincing the lower management is time consuming and a lengthy process. In such case sometimes it is advisable to simply convert the change into a matter of policy and apply. This creates a lot of resistance from all the quarters of the organization. For ex: In GE the initial deadline was issued as fix, sell or close, which meant a drive towards a lean and agile GE. It shut down all the units who could not perform but also would have caused resistance from all quarters. (Page 2) 3. Generation of ideas requires an open and honest feedback and a suitable reward and recognition system. The system of evaluation of the ideas needs to be put in place. Evaluation should be aligned with the feasibility of the ideas. It is true that right from the base level employee to the top management everyone has to think of the organization as his or her own and think of means and ways of improving the system. Creation of this feeling is triggered when the employee realizes that the ideas generated are getting the recognition they deserve. Only in such case the changes initiated are from within and sustain over a period of time. Q. 3. With example discuss how Jack Welch effectively addressed the step in his management change at GE Jack Welch realized this and decided to roll out an idea called Work Out (Page 4 and 5). In the 1980s Jack Welch with the help of his colleague rolled out a plan called ‘Work Out’. He initially called for a meeting of his managers and asked them about the difficulties they were facing in order to implement changes back in the system. The discussion was honest, open and energetic, Welch wanted to cultivate the same environment while implanting changes into the system. The group also realized that if the employee contribution was to be encouraged then the feedback and action should be immediate on the suggestion given. The employees were called for a 3 day session. On day one they were given a set of problems and then the bosses were asked to leave. The employees came up with discussions and their own set of solutions. Then the managers were called back and the ideas were rolled out then and there, ideas or suggestions which required a detailed sketching were set aside with an action date set on them. Rest all other ideas were sanctioned on the spot by the respective managers. This tackled all the major problems stated in the step above. The employees got an honest and open forum where they knew their ideas were valued. The feedback from this session was overwhelming and they had success stories to carry and share, which boosted their morale. Red tapism and bureaucracy was avoided. The changes came from within the system and from the people who were more empowered to carry the changes effectively. The change was sustained. The initial batch led way to fruitful contribution from all the batches to follow. Q. 4. Your recommendations as to how he could have implemented the steps more effectively. 1. The ideas although were not documented but given an on the spot approval should be documented over a period of time. This would help in creating the way for people to come and take charge in future. In the Work-out sessions Jack Welch did not really appreciate documentation of the sessions. He thought he would wrap the sessions with the red tape. Although almost all the ideas were implemented as a matter of policy he would have created a strong database of ideas with documentation, which forms like a bank of ideas an employee can always go back to. 2. Managers in due course of time also need to quantify the success of an idea implemented. The most productive idea with a reasonable assessment plan of 6 months to 1 year should get a far more rewarding recognition. Although in the same Work-out plan the on the spot sanction uplifted the morale of the employee, it can also happen that the implementation may encounter some or the other problem. This can lead to the dilution of the idea. Any good plan or proposal should be evaluated over a period of time to assess the effectiveness as well as the results. Hence periodical review becomes necessary. Also, effectiveness of a plan can be gauged in numbers and over a period of time post implementation. Step 6: Create Short term Wins Q.1. Discuss what was new that you learned, Ideas that may have surprised you, and ideas that really resonated with you. The ideas I learnt and really resonated with me are: 1. Wins that are as visible as possible to get many people as possible A small change in the production process can lead to a dynamic change in the entire system. These changes are visible and are felt by people in the departments across. This triggers the ‘me too’ approach and slowly the process of changes from within takes place. Although GE’s foray into service sector is by no means a small change to the organization, we can still easily relate to this concept. Under the guidance of Paolo Fresco and with explicit instructions from the chief Jack Welch, the idea of providing value added services began to take roots in GE. Slowly and steadily all the GE businesses started looking at the service option. It was a small beginning to the most valued concept which has formed the basis of today’s businesses be it of any sector. (Page 10) 2. Wins that penetrate emotional defenses by being unambiguous If the goal of the change seems unattainable the manager needs to break it down into small achievable modules. Change resistance mainly comes from the degree of challenge that is faced by an individual. The moment the goals become clear and achievable the contribution of an employee increases and is more fruitful. 3. Wins that are meaningful to others , the more deeply meaningful the better You have to see where I come from or vice versa is what is conveyed through this line. For a change to accelerate everyone in the organization needs to see the wins with the same perspective. When employees in GE expressed their views on the quality of the products is not satisfactory for them it triggered a whole new idea of implementing six sigma initiatives in the company. With the help of comparative analysis of other organizations who implemented the six sigma initiatives effectively Jack Welch rolled out a plan for GE. The plan expected the organization to invest heavily on training of the managers to get desired results. It seemed a huge gigantic task for the company to train, implement, and get results out of a brand new concept. The conviction of the managers helped effective implementation of this idea tremendously. Also the fact that it was phased out in small achievable modules helped to look at it as an achievable set of objectives. Jack Welch was successful in transforming the vision for quality to his people successfully and by linking it to the pay packets made it unambiguous, achievable and a passion to work for. (Page 12 & 13) Q.2. Describe what you think would be difficult in the implementation of the step. 1. Small changes often go unnoticed in an organization. Sometimes the departmental changes are really good and can be implemented or spread across the organization. Even the managers do not realize the significance of these small changes happening across. Apart from this sometimes the initiator may himself not realize the value of the change that has been put forth and implemented. In case of stretch being implemented an employee would want to try various alternatives to bring the cost of inventory down. If at all nothing works there are significant small changes happening which need to be taken into account (Page 10) 2. In the excitement and frenzy of the change that has been proposed people do not really evaluate it objectively. Subjectivity leads to goals being ambiguous. Apart from that if the goals are not aligned with that of the organization they also tend to remain highly individual. Being emotional about the goals set and achieved leads to blocking the flow of work. Emotional defenses also means the resistance and ‘why me’ approach held by an employee. This barrier can be brought down only when the goals become clear and unambiguous. In case of revamping the performance appraisal system the manager has to review his team on the basis of key performance indicators and competencies together. Although the goals here are clear for every manager it would have been an emotional and psychological difficulty blocking the goal for a substantial period of time (Page 13 & 14) 3. In an organization all inter departmental goals need to be aligned and must have a strong connection with each other. Establishing this connection is not often easy for managers. Integrated management is difficult concept to implement. Small ideas can spark a bigger change. They need adequate support and recognition from the management. More often the managers should encourage these initiatives irrespective of the volatility of the success. Only then the effort is put in the work and due success achieved. But as mot managers feel responsible towards the efforts and resources of the department they snub the efforts than to encourage them. Q. 3. With example discuss how Jack Welch effectively addressed the step in his management change at GE If you see the case of GE nearly all the efforts that are put in changing the organization from within have started a small achievable components or units. It started with his initial change of “Fix, Sell or Close”, which led to the most uncompetitive business to shut down. (Page 2 and 3) the target given was very simple. Either achieves number one or two statuses in the areas you function or move away. This is clearly the evidence of a very large picture broken down into smaller sections. If the company needs to succeed, the success has to come from every quarter and sub unit. If the sub units are not capable of delivering a high quality performance they would be a stumbling block in the bigger success to be achieved, it also gave an option of succeeding and creating their own model of success. If the strategies are not focusing clearly to achieve the top position then the goals are not being clear. Every unit strived to be number one in order to not to perish in the process. The second example is of the idea “Stretch” implemented successfully. Every department and unit has to set a target beyond the normal performance appraisal targets. It encouraged the practice of going an extra mile. This was not considered as a parameter of performance and hence failures were considered. However it should be noted that only through these efforts GE was able to pull down its inventory costs substantially. This also percolated in the performance management systems implemented by GE. (Page 7 & 8) the changes introduced in assessing the performance of the employees were many. One significant was the concept of 360 degrees feedback. Q. 4. Your recommendations as to how he could have implemented the steps more effectively. 1. Although initial introduction of perform or perish was a necessity it would have been implemented with a softer approach. Understandably these things are never soft for the receiver, howsoever softly it is tried to put across. Even then the view that we are finally discussing people has to be taken into account. 2. Consideration for failures would cost the company. While managing an organization a manager has to take into account that everything translates into cash. Emotional stability is achieved by a team which strives to go an extra mile management support is extended irrespective of volatility of success. While studying the GE case with all the glory achieved by his relentless pursuit for excellence and achievements Jack Welch would have encountered numerous hurdles with people in the organization. Like all the CEOs he would also have to bear the brunt of the people. Like his initial idea of fix, sell or close, although he expected people to travel towards excellence in performances, it would definitely not be an easy decision to shut down the operations which were burdensome. Whenever shutting down of an operation happens, the top brass of the management admits that it is not operations we are shutting down, we are talking about people who earn and survive through these operations. (Page 2) Another example is of the stretch technique he implemented. It is not an easy task to convince an employee that although the stretch targets are not related to the performance appraisals they still need to be achieved. Conversely the emotional assurance to the employee is also required that if the target is not achieved it is not punishable. GE had to play with this double edged sword to get the desired results. This is a very difficult concept to understand and implement at all the levels of the management.(Page 9 & 10) Change attracts skepticism and resistance, is non believable and uncomfortable. The key ingredient to successful change management is the human resource of the organization which if confided and boosted can truly transform the organizations in the long run. Read More