Bloomberg BusinessWeek published an article profiling General Electric’s efforts to get the company acting more like a 21st Century startup.  Taking a cue from Silicon Valley’s start-up culture, GE recruited tech entrepreneur Eric Reis, author of the book The Lean Startup, to initiate the company-wide movement titled FastWorks.

Similar to Lean Six Sigma that fueled rallying and transformational efforts in the 1990’s, FastWorks is targeted to motivate GE employees to be more customer focused, speed new product development, reduce costs and improve customer engagement. The Reis philosophy is that faster product innovation is garnered from building imperfect early versions, gaining timely customer feedback, while continuously “pivoting” and adapting products to address market opportunities. The initiative is described by GE Chief Marketing Officer Beth Comstock as “giving employees the freedom to try things that may not prove successful: Fail fast, fail small.”

Easily stated, but with far different implications for a rather large, global based manufacturer.

According to Bloomberg, GE has already trained 40,000 employees in FastWorks. With more than 300 projects underway, the program is described as one of the largest initiatives in GE history. Early product development projects include a high-output gas turbine developed two years faster with 40 percent less cost than would traditional program management would have yielded.  Other product initiatives cited were a light bulb with built-in wireless dimming chip, an oil well flow meter which launched after a year in development and is being commercialized in alliance with an energy company.

In the article, a Harvard Business School professor is quoted as observing that as large companies get bigger and scale, they tend to slow down because they have so many processes, systems and structures. Having worked at large and small companies on technology related projects, and having observed the enterprise and supply chain technology marketplace for over ten years, this author can well relate to the obstacles and bureaucratic inertia of large organizations. Most of the innovation in software has come from smaller, best-of-breed start-ups who were laser focused on customer and supply chain needs. That said, failing fast is quite different in a larger vs. a smaller organization. If the philosophy is an integral fabric of the organizational culture, than teams expect to incur failures, learn quickly and move on.  In larger organizations there tends to be analysis paralysis as to why the failure.

Supply chain transformation initiatives take on similar characteristics. In a previous Supply Chain Matters commentary highlighting the Supply Chain Management Review article, Culture Eats Strategy, authors John D. Hanson and Steven A. Melnyk provide us reminders that organizational attempts for implementing strategies of radical innovation are often stymied by inherent organizational culture.  That includes the spillover of efforts directed at a firm’s value-chain focused processes. If an organization was previously managing suppliers based on cost competitiveness, adding quicker product innovation implies a potential conflict in culture. The article reminds us that the management myth of showing teams a better way and they will embrace it is often de-railed by an inherent organizational culture that can, and often will, resist radical change unless old ways are discredited.

Similarly, many organizational transformational initiatives need to address inherent organizational culture, especially if it detracts from desired outcome objectives, whether they target innovation, efficiency or responsiveness. Is it any surprise that certain enterprise software vendors have embarked on an acquisition frenzy to secure product innovation?

In the case of GE, culture has always been addressed from the top, and down.  The legacy of Jack Welch and the current leadership of Jeff Immelt each demonstrated personal passion toward changing organizational culture.  FastWorks will no doubt include GE’s internal business groups but its value-chain suppliers as well.

The takeaway is regardless of what name and purpose an initiative takes on, it must incorporate strategy and organizational culture needs.

What’s your view?

Are large organizational transformational efforts another means to employ large numbers of teams, or is changing existing organizational culture the prime objective?

Bob Ferrari