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6 AUDIO-TECH
3. Meet with managers of • Reduce average costs per welcome by the lead
other areas to review repair by more than 10 facilitator, an overview of
processes that cut across percent year over year. the methodology and the
functional boundaries. business issue to be
• Increase productivity by addressed, related back-
4. Benchmark performance 20 percent while main- ground information, and
against competitors. taining service standards. a warm-up exercise
intended to lighten what
5. Ask staff what is limiting • Reduce cycle time for can become a tense and
business results. client proposals by 50 per- anxious atmosphere. The
cent within four weeks. key ground rules and
An urgent and compelling principles include "no
issue makes the best Work- To double-check your SMART sacred cows," "no turf bat-
Out target. The following are goal, estimate its business tles," and "no blaming or
key criteria: impact. This is an estimate of complaining."
the bottom-line impact of your
• It is important and goal. For example, if the goal 2. The Small Group Idea
urgent, not just "nice to is to reduce average costs per Generation phase focuses
do." repair by 10 percent, the busi- on initial brainstorming.
ness impact can be calculated The teams identify the
• The topic is broad enough as follows: topics or opportunities the
for brainstorming, not a session can address by
single, well-defined task 1. Determine the average developing a list of top 10
or narrowly stated prob- cost per repair. ideas or possible opportu-
lem. nities for achieving the
2. Determine the average assigned goal. Once the
• The objective is an number of repairs per ideas have been written
improvement in actual month. down, ideas can be catego-
performance, not just an rized and prioritized using
improvement in an area 3. Multiply these two num- a Pay-Off Matrix, a pow-
like planning or training. bers by 12 and get the erful tool for prioritizing
average repair costs per ideas. As we've already
• Some aspects of the year. discussed, this matrix
improvement can yield allows you to compare
results right away. 4. Take 10 percent of this ideas based on whether
number. they are easy or tough to
The purpose of the planning implement, and whether
phase is to answer one ques- This business-impact number the pay-off is small or big.
tion: What is the objective of provides motivation and
this Work-Out in bottom-line excitement for Work-Out par- 3. The Gallery of Ideas step
business terms? For example, ticipants. It helps them see takes place when each of
"improving customer service" that they are not just engag- the small Work-Out teams
is too vague and unclear. But ing in an exercise, but helping share their preliminary
"implementing the predeter- to put some real money on the ideas with the rest of the
mined customer response bottom line. group at the session. Each
script" is too narrow. team lists its top 10 ideas
■■ on a wall of the meeting
The criteria for a Work-Out room. In the team presen-
goal can be expressed in a 4. CONDUCTING A WORK-OUT tations, the spokesperson
SMART goal statement. That explains the rationale for
is, it must be a Stretch goal. Now let's discuss how you can each idea. This should
It must be Measurable, conduct a Work-Out. There take about 10 minutes,
Achievable, Realistic, and are five basic steps in this followed by a 10-minute
Time-related. stage: question-and-answer
period. As teams’ presen-
Here are some SMART goals 1. The Introduction at the tations are made, partici-
from a variety of organizations: opening session includes a pants should resolve any
BUSINESS BOOK SUMMARIES 7
duplications or overlaps. recommendation. The them into real organizational
Then the group votes on action plan should include change and real results.
the ideas. Participants the name of the person on
use dots or stickers to vote the team who has volun- Four elements of Implement-
for the top four ideas from teered to "own" the plan. ation will produce success:
each team. At this point, the sponsor
and other managers First, make accountability
4. The Action should ask clarifying ques- stick. This means immediate-
Recommendations stage tions as needed to ensure ly confirming who will be
occurs next. For the bal- that they understand responsible for implementing
ance of the time leading what change is being rec- each recommendation at the
up to the Town Meeting, ommended, and to ensure grass roots level. It also means
the teams work to develop that the team has pulling together the team —
the four ideas that explored all the available the champion, team leader, and
received the most votes. options. The sponsor then recommendation owner — that
The teams can do "dry has to make a yes or no will be on the hook for the rec-
runs" of their presenta- decision on that recom- ommendation for the next
tions to anticipate the mendation. If the sponsor eight to 12 weeks.
tough questions and says no, he should explain
challenges they will face the reasoning behind his Second, at the end of the Town
about the risks and decision to the team. Meeting the sponsor needs to
payouts. During this Occasionally, the sponsor move immediately into work
phase, the team should may need to ask the team planning and to confirm
consider the following to do more research before assignments so that there is
questions to strengthen receiving an unqualified one individual accountable for
each recommendation or yes. If this is the case, the each idea. All of the action
action plan: sponsor must set a specif- steps must be assigned and
ic, short time frame for given deadlines. All recom-
• What is the probability completing the work and mendation owners should have
of success? Are there making a final decision. a stake in the business issue
other ways to increase This is not an excuse to being addressed. At several
it? put off a decision for GE units, a two-hour work
months. The sponsor planning session takes place
• Can the plan be tracked might say, "I want to say immediately after the Town
and measured? yes, but we really need the Meeting — before people can
financial implications to get back to their offices or run
• What are the likely be spelled out more clear- to airports. Anyone who can-
objections? ly. Get the numbers and not stay is given some brief
let's meet tomorrow at instructions about putting
5. At the Town Meeting, 8:00, and if they look good, together a work plan with an
each team will present its my decision will definitely assignment that is due in 24
recommendations and be yes." hours.
action plans to the spon-
sor, champion, and other ■■ The third aspect of implemen-
key business managers. tation is the challenge of
The sponsor will then 5. IMPLEMENTING WORK-OUT managing the organiza-
make decisions on the RECOMMENDATIONS tion’s cycle of energy. People
spot. The presentation will encounter all forms of
includes the recommenda- Let's assume that you've held resistance to change, some
tion, the business issue your Work-Out and you've subtle, some not, as they set
that it addresses, the approved an ambitious list of about their assignments.
financial pay-off and recommendations. This is not Sponsors and champions
other benefits, the risks, the end of a successful Work- should support and coach rec-
the way that the results Out; it's the beginning. The ommendation owners through
will be tracked and mea- power of Work-Out lies in tak- these difficulties.
sured, and the action ing the ideas unleashed in the
plan for implementing the Town Meeting and translating Finally, the fourth element is
8 AUDIO-TECH
to provide management champion and the sponsor. If the breakage situation. The
oversight and support. any obstacles have emerged, second Work-Out session
Some goals have a clear scope they can be removed before the identified several solutions
and narrow focus. Others don’t project stalls. over two days, among them the
and, instead, involve making recommendation to use inflat-
major progress on a complex The implementation phase is able airbags to fill the spaces
issue in a short amount of the key to the success of Work- between boxes that caused
time. For example, a program Out. No one will want to do loads to shift and bulbs to
suggested at Armstrong World another Work-Out if the recom- break. Relatively simple
Industries was far too large to mendations approved at the changes in pallet configura-
be implemented on a nation- Town Meeting are not imple- tions — to make them conform
wide basis within 12 weeks. mented successfully. When all more to the configuration of
Instead, the sponsor suggested of the participants perform forklifts — also were recom-
that the recommendation their roles well, the company mended to reduce breakage. In
owner focus on one or two begins to develop a sense of all, the teams identified mil-
major metropolitan areas first, infinite possibility. lions of dollars worth of sav-
and get the program up and ings at the concluding session
running there. ■■ and then implemented them
over the next several months.
To implement the recommen- 6. CUSTOMIZING WORK-OUT
dations, you also need to select FOR YOUR ORGANIZATION Another key variable is dis-
the implementation team tance. One example is from
members. The team needs Of course, not every company SmithKline Beecham, which
people who: is like GE, so it is essential to had several locations scattered
customize Work-Out to your across the U.S. and the U.K.
• Are close enough to the own organization, situation, The issue was structural
front line to understand and problems. This entails reorganization after a merger.
the technical aspects of the considering several key vari- The first stage consisted of a
subject matter. ables and deciding how to two-day session of the top 25
make constructive adaptations. managers. A number of possi-
• Have the potential to chal- ble organizational designs were
lenge the status quo and One variable is time. Some considered, and the team
be innovative and creative. problems are too complex to be approved one overall design.
handled in a three-day session, Stage two was a virtual Work-
• Are likely to participate much less a one-day blitz. In Out in which people were
actively and effectively in such cases, an "extended" solicited for their ideas on
a team without trying to Work-Out may be used. GE organizational design and how
dominate it. Lighting used this approach to that design might reduce costs.
reduce product breakage. Each unit in the overall group
• Are strongly oriented was given a month to accom-
towards action and results. The problem was that nobody plish this. At the end of the
really understood the problem month, each manager froze the
Setting up the action plan of breakage or how well the local Lotus Notes used for the
involves all of the usual proce- potential solutions would work. virtual session and developed a
dures. Assign accountability Thus, the first stage was a set of recommendations about
for each step, determine the one-day "getting organized" next steps.
time frame for each activity, Work-Out. Cross-functional
and test the plan for complete- teams, each focused on a prod- Besides time and distance, the
ness. Then the recommenda- uct category, met to review third major way to create vari-
tion owner reviews the plan existing data and discuss possi- ations on Work-Out is to "flex
with the champion and, if nec- ble issues. The recommenda- the focus." That is, shape the
essary, enlists the champion’s tion was to develop a specific process around three different
help in smoothing the way for work plan for the next few types of topics and goals:
implementation. During the weeks on how to find out what
reviews, at 30, 60, and 90 days, was really going on. 1. Bureaucracy-busting.
each recommendation owner
reports on his progress to the Teams went about researching 2. Process improvement.
BUSINESS BOOK SUMMARIES 9
3. Strengthening the value aspects of a business require 4. Creating a joint team with
chain. some processes to run parallel. a few people from each
New product introductions are company.
Despite the logical appeal, it an example. The processes can
isn’t always clear that busting be mapped to show points of 5. Holding the event and
bureaucracy has a measurable convergence and divergence starting the process.
pay-off. By "dollarizing" and critical points along the
bureaucracy — including some way. 6. Reviewing initial efforts
time to assess bottom line jointly and keeping the
impact — you can select ideas The teaching of process map- process going.
that make a real cost-cutting ping and process thinking can
contribution. be handled by incorporating a ■■
tutorial on how to do process
Bureaucracy is often the result mapping into the agenda. An 7. LONG-TERM PAY-OFF:
of the addition of hundreds example of a process map for CREATING THE LEADERS AND
of small procedures that drain buying a car is shown below. THE CULTURE
time, energy, and profitability.
By "blitzing" — encouraging As process thinking becomes Transforming an organization
lots of ideas for small improve- embedded in your company, to make it more competitive,
ments that can be evaluated the natural next step is to con- productive, or innovative in
and implemented easily — sider the overall context in any way means having better
enormous savings and which processes occur: the leadership. Those who have
efficiencies can be realized. value chain of suppliers and leadership roles in an organiza-
customers. Value chain Work- tion need to step forward and
Process improvement Work- Outs can be organized by: start a creative chain reaction
Outs go very nicely with that gets more and more
bureaucracy-busting because 1. Sketching out the key people to change as well.
the rationale is that the com- constituents in your value
pany's people must continue to chain. Who are the most The starting point is to create
think about how they can do critical suppliers and the "leadership brand" — the
things better. That’s process significant customers? expectations of what leaders
improvement, which can come should achieve and how they
in "big ideas," but most often 2. Selecting a few partners should do it. At GE, the con-
come in small increments of with whom you can start a versation began about "speed,
continuous improvement. dialogue. simplicity, and self-confidence."
The Work-Out can be designed 3. Listening to their concerns
around the process and, by and understanding their To give the brand clear defini-
extension, the steps in the perspective. tion, a series of leadership-
process. Further, certain assessment and development
programs was developed. The
GE Capital program, called
PROCESS MAP EXAMPLE: BUYING A CAR "Leadership Challenge," was
based on a one-day workshop
and an assessment instrument
that translated the GE motto
into 20 specific behaviors.
Dave Ulrich is a professor of business administration at the University of Michigan School of Business and the
author of the best-selling Human Resource Champions, Results-Based Leadership, and The HR Scorecard.
Steve Kerr is Chief Learning Officer and a Managing Director of Goldman Sachs. he was previously Vice
President-Leadership Development and Chief Learning Officer for General Electric, with responsibility for GE’s
renowned Leadership Development Center at Crotonville.
Ron Ashkenas is a managing partner of Robert H. Schaffer & Associates. A leading consultant to CEO’s on orga-
nizational transformation, he also is the senior author (with Ulrich, Kerr, and Todd Jick) of The Boundaryless
Organization.
To order this book, please send check or money order for $29.95, plus
$3.50 shipping and handling to:
The GE Work-Out summarized by arrangement with The McGraw-Hill Companies, Inc., from The GE Work-
Out: How to Implement GE’s Revolutionary Method for Busting Bureaucracy and Attacking Organizational
Problems — Fast! by Dave Ulrich, Steve Kerr, and Ron Ashkenas, with Debbie Burke and Patrice Murphy.
Copyright © 2002 by The McGraw-Hill Companies, Inc.