Sample Paper 3

IOD - GMBA - April 2010 (Dubai), November 2010 (Singapore)

GEs Workout

General electric establishes its work-out process in the early 1990s. It continues to be a mainstay in GE’s efforts to initiate change. In the interim years, the Work-Out process has also been adopted by such diverse organization as GM, Home Depot, Frito-Lay, LL Bean, Sears, IBM and the World Bank.

The Impetus for the Work-out was the belief by GE’s CEO that the company’s culture was too bureaucratic and slow to respond to change. He wanted to create a vehicle that would effectively engage and empower GE workers.

Essentially, Work-Out brings together employees and managers from many different functions and levels within an organization for an informal 3-day meeting to discuss and solve the problems that have been identified by employees or senior management. Set into small teams, people are encouraged to challenge prevailing assumptions about “the way we have always done things” and develop recommendations for significant improvements in organizational processes. The work-out teams then present their recommendations to a senior manager in a public gathering called a Town Meeting.

At the Town Meeting, the manager in charge overseas a discussion about the recommendation and then is required to make a yes-or-no decision on the spot. Only in unusual circumstances can a recommendation be tabled for further study. Recommendations that are accepted are assigned to managers who have volunteered to carry them out. Typically, a recommendation will move from inception to implementation in 90 days or less. The logic behind the Workout is to identify problems, stimulate diverse input, and provide a mechanism for speedy decision and action.

More recently, GE CEO Jeffery Immelt has extended the Work-Out concept to build capabilities in anticipating future technologies and engage in long-range planning. GE wants all its managers to be adept at the kind of strategic thinking that most companies entrust only to senior management. For example, GE is offering managers new classes focused on learning how to create new lines of business.

Questions:

1) What type of change process would you call this? Explain

2) Why should it work?

3) What negative consequences do you think might result from this process?

4) Why do you think new GE CEO Jeff Immelt has revised the Work-Out concept?

CASE SUMMARY

1) Work-Out Process

a. Started in early 1990’s

b. Adopted by many companies apart from GE – GM, Home Depot, Frito-Lay, LL Bean, Sears, IBM & World Bank

c. Why this structure

i. To avoid bureaucratic structure which is slow to respond to change

ii. To empower employees who are the change agent

iii. To identify problem, stimulate diverse input & provide mechanism for speedy decision & action

d. How it is done

i. Bring employees and managers for an informal 3 day meeting

ii. Problems identified by the senior management was discussed among them

iii. Small teams, hence, were created of managers & employees

iv. They were asked to challenge the prevailing beliefs, assumptions or way of doing things (Change management, Business process re-engineering)

v. Recommendation should bring significant improvements in organizational processes

vi. Manager-in-charge must make the decision of acceptance / rejection of recommendation on the SOPT in the town-meeting

vii. If accepted, recommendation are assigned to managers who have volunteered to carry them out

viii. Time to implementation from inception = 90 days or less

e. Bill’s contribution

i. Extended it to anticipate future technologies

ii. Using it to engage long-range planning

iii. Make managers learn the strategic thinking which is thought to be the key attribute of senior management