Winning - Jack Welch [46]
4. Look at car wrecks.
If a company’s leaders implement these practices with passion and reward everyone else who buys in, eventually all the noise around change will stop sounding like noise. Change will become business as usual—the norm—and when it does, mountains do move.
I’ve seen it happen, and it’s not as earth-shattering as it’s made out to be.
Now for the practices in more detail.
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1. Attach every change initiative to a clear purpose or goal. Change for change’s sake is stupid and enervating.
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It is a disaster when companies take all the hype about change literally and grab every new management fad that comes down the pike. It’s change overload! Some big companies adopt ten different change initiatives at once and run in eight different directions. Nothing meaningful ever happens in these flavor-of-the-month kinds of situations except that, for most employees, work feels very frantic and disorganized.
Actually, change should be a relatively orderly process.
But for that to occur, people have to understand—in their heads and in their hearts—why change is necessary and where the change is taking them.
This is easier, of course, when the problems are obvious—as in, the house is burning down. Earnings are collapsing, a competitor has dropped prices 20 percent, or a new product appears that totally threatens your market position. Change is made even easier when the media is writing stories about your imminent demise—perhaps the one time you welcome bad press! Many of the most notable large company turnarounds in the past decade had this going for them: GM, IBM, and Xerox, to name three.
When the whole world knows about your problem, the wind is at your back.
But sometimes the need for change isn’t scrawled across the skies.
Competitive threats only seem to be emerging. They may not even be real…or they may be your company’s death knell. You don’t know—and still, you have to respond.
In those cases, lots of data and relentless communication about the business rationale for change are the best ammunition you’ve got.
Take the case of GE’s appliances business in the late 1970s. In those days, Appliances and Lighting were the mainstays of the company—the previous two chairmen and several vice-chairmen had come from their ranks. As far as everyone in the business was concerned, GE was the leader in major appliances and it would be that way forever.
In 1978, when I was appointed head of the Consumer Products Group, I found myself staring at an appliances business whose market share had been slipping for a few years and whose margins were sliding even faster. To an outsider like me, the situation looked frighteningly similar to the television receiver and automotive businesses, where the Japanese were making tremendous inroads with higher-quality, lower-cost products while fat American companies sat by doing little.
I made my case to Appliances’ business managers at their headquarters, in Louisville, Kentucky. The place was loaded with “good old boys,” not to mention tons of overhead and layers of bureaucracy. I showed them chart after chart illustrating Appliances’s eroding position. And yet, early buy-in was minimal, to put it mildly. At the outset, I basically forced the cost-reduction program.*
Almost immediately, I got back the two refrains common to every cost-reduction program ever launched:
“We’ve already cut the fat. You’re asking us to cut the bone.”
And: “The competitors are crazy. They’re giving away product. Just watch—they can’t keep it up.”
Fortunately, the head of the business—a “good old boy” named Dick Donegan, whom I had been prepared to write off—saw the logic of the case, came to my aid, and started to champion change at Appliances. His leadership was vital to fixing things. He had been with Appliances his entire career, so he knew the players well. He built a team of supporters around him and cleaned out detractors—literally hundreds of them—over a two-year period.
In the end, the appliances business went through drastic changes because it had to. That fact