Winning - Jack Welch [63]
Along with getting the right people in place, best practices are all part of implementing the hell out of your big aha, and to my mind, it’s the most fun.
It’s fun because companies that make best practices a priority are thriving, thirsting, learning organizations. They believe that everyone should always be searching for a better way. These kinds of companies are filled with energy and curiosity and a spirit of can-do.
Don’t tell me that’s not a competitive advantage!
Back in the old days—after World War II and before global competition—most industrial companies, GE included, were stuck in a not-invented-here (NIH) mind-set. The focus was on their own inventors, with plaques and bonuses reserved for the people who came up with and implemented original ideas.
Once the ’80s arrived, we had no choice but to radically broaden the NIH mind-set, and we did so by celebrating people who not only invented things, but found great ideas anywhere and shared them with everyone in the company. We came to call this behavior “boundarylessness.” This awkward word basically described an obsession with finding a better way—or a better idea—whether its source was a colleague, another GE business, or another company across the street or on the other side of the globe.
The impact of boundaryless thinking on our strategy implementation was enormous. Here’s just one example:
GE was always trying to improve its working capital usage; we were always using too much, and increasing our inventory turns would help. But try as we might with all sorts of programs and tweaks, we just couldn’t seem to get our annual turns above four.
In September 1994, Manny Kampouris was scheduled to speak at a dinner for the top thirty leaders in our company. At the time, Manny was the chairman and CEO of American Standard, the global plumbing and air-conditioning supply company and one of the largest customers of our motors business.
You couldn’t help but notice that Manny wore a lapel pin emblazoned with the number “15” at its center. And soon enough, we all knew why.
For most of his talk that night, Manny regaled us with stories of how they had drastically improved inventory turns at American Standard, a company that produced a broad and varied mix of porcelain toilet bowls and sinks in factories in just about every corner of the world. Manny and American Standard were obsessed with inventory turns. The reason was simple: the company had recently gone through a leveraged buyout, and cash flow was king.*
Our team was awestruck. You could hear people thinking, if American Standard can improve inventory turns with its product mix and complicated manufacturing processes, why can’t we? Before Manny could finish his talk, our business leaders were peppering him with question after question.
But that was just the beginning.
What followed was an avalanche of GE people visiting American Standard facilities, meeting with foremen and factory managers—all of them wearing lapel pins like Manny’s. There was the occasional black sheep with a “10,” but many more plant managers who wore pins boasting of twenty or twenty-five turns. We crawled all over their plants and picked their brains.
They were happy to help. One thing I have learned from boundarylessness over the years is that companies and their people—if they’re not direct competitors, of course—love to share success stories. All you have to do is ask.
The GE people who visited American Standard put what they had learned into practice in their own businesses. Over the next several years, these businesses adapted many of American Standard’s processes to GE, and continually innovated and shared with each other. It worked. By 2000, GE’s inventory turns had more than doubled, freeing up billions of dollars of cash.
Over the years, GE borrowed great ideas with visits to Wal-Mart