How One Multinational Conglomerate Radically Changed Its Company Culture and Saved Millions*

*Or, hey, if GE can dramatically shake up its internal processes, your behemoth corporate workplace can too

Photo by The Lean Startup Conference/Jakub Mosur and Erin Lubin

GE employs people in 175 countries across a half dozen industries and in more time zones than we can keep track of. So you might think modifying the culture at a company this vast from a this-is-how-we’ve-always-done-it methodology to one that rewards risk taking would take a lifetime.

But it’s taken Janice Semper, who works in GE’s HR department, less than 18 months to significantly modernize the company’s processes. And now she’s evangelizing the radical shifts her innovation team has been able to implement at GE.

Her team’s revamped methodology, which GE coined FastWorks, proves that a customer-first ethos can drastically slash the bottom line and increase the competitive edge for the Fortune 500s out there. Moving to FastWorks helped GE get one product to the market two years ahead of the competition. It’s also reduced development costs in one division by 60% while cutting the cost of earning customer validation by 80%. Not bad, right?

So how do GE’s accomplishments affect you, the non-GE worker, sitting here wishing your ultra corporate employer would test some fresh approaches? Or perhaps you, the corporate boss, whose teams are entrenched in the safety of routine?

The thing is, the Lean Startup framework that worked for Janice and GE could also work for your company, so long as you’re aware of the nuances of applying Lean concepts to a mammoth organization.

This is where Janice’s trials and errors with GE are helpful.

In a recent podcast interview with Lean Startup Co., Janice broke down her strategy for infusing GE with a system that empowers employees and puts the customer’s needs first. Of course we recommend listening to the whole thing. Janice has so many wise things to say.

But if you just want the gist, this is how GE changed everything, in a nutshell:

It started with getting the brass on board — all 5,000 of them.

Before FastWorks, GE was steeped in Six Sigma, a rigid set of techniques that the company rolled out in a heavy-handed, bureaucratic way, says Janice.

This time around, she didn’t want to slap Lean Startup teachings in a manual and call it a day. She needed employees to really own FastWorks.

So she hit the road — together with her FastWorks co-founder, GE’s Global Director of Innovation Acceleration Viv Goldstein-Wiltshire, as well as our very own Eric Ries and author David Kidder. Together they visited every GE business and discussed how FastWorks would simplify their processes, help them move faster, and make them more customer-centric.

Then Janice embedded a “community of coaches” within each GE business.

The FastWorks crew trained a community of experts in the tools, principles, and behaviors integral to the program and showed them how to implement them. And they didn’t jam these coaches into random offices, they allowed each GE business to initially decide who the coaches should be, how many coaches they’d need, and if they should be full-time or part-time, with some guidance from Janice and Viv.

Her team aligned every system at GE to work in conjunction with FastWorks.

Training people is great, but it’s also like—hey, you can teach people to speak French, but if they only have conversations in English, this stuff is never going to sink in. FastWorks needed to be part of every conversation people were having at GE.

Janice says she learned early on that GE’s leadership was struggling to put FastWorks into practice because the methodology worked against some of their other practices.

To fix this glitch, she thought more holistically about integration. Her team reconstructed the expectations for employees and leadership and retooled the performance management systems to support FastWorks.

About that performance management system … it couldn’t remain this rigid thing.

Historically GE measured its employees’ work on a rigid, goal-oriented system. This formula was out of sync with a new ethos that championed experimenting and pivoting.

So the FastWorks crew revamped the thing.

Now GE has an ongoing review process that focuses on “asking the right questions throughout the year” instead of annually feeding employees abstract benchmarks to hit.

They also stopped rewarding people for being “right.”

Working in Six Sigma for so many years created an environment where employees were terrified of being wrong, says Janice, which led to a cultural fear of failure.

So Janice’s team trashed the old perfection-focused ethos and instituted a new, five point plan in its place, which her team unveiled in discussions with GE’s business leaders:

“Our five belief statements are: customers determine our success, stay lean to go fast, learn and adapt to win, empower and inspire each other, and deliver results in an uncertain world,” says Janice.

They wanted the top brass to really understand that failures are part of the iteration process.

They created Growth Boards to quickly assess which projects should continue … and which ones get the axe.

Too many companies manufacture DOA products because, well, they’ve already invested too much time and money into them to stop. GE is halting that lifeless inertia with its Growth Boards.

These groups are similar to VC boards, where teams pitch new products, earn their seed funding, and get more funding only when they’re able to validate their assumptions. Otherwise it’s back to the drawing board.

“Stopping work, stopping anything at GE, was countercultural,” says Janice, “but this gave [employees] the forum to be able to say we actually should not pursue this because our customer has told us it will not create value for them.”

And then they can focus more resources on the stuff that does work.

So why should your team consider a similarly Lean approach? Because you want your company to stick around, right?

It’s hard to think of an industry that isn’t experiencing some form of unprecedented disruption right now. Small, agile companies are popping up to compete with legacy businesses all over the world.

Janice says this status quo shift creates a compelling urgency for corporations to immediately consider modernizing their methodology.

“If we don’t change, we run the risk of becoming an organization that is obsolete,” she says. “And we’re not talking in 100 years, we’re talking in less than a decade.”

Janice Semper will be speaking more about GE and FastWorks at The Lean Startup Conference, November 16-19 in San Francisco.


Jennifer Maerz is a Contributing Editor for Lean Startup Co.

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