TheFiresideCEO 227sharing them not only with GE businesses but with businesspeople
the world over.
Welch notes that “the intellectual underpinning of Work-Out
consists of ideas like worker involvement, trust and empowerment—
shopworn and even platitudinous concepts.” Yet he goes on to say
that at GE, “the difference is that our whole organization is, in fact,
living them, every day.” GE wields these “soft concepts” as real com-
petitive weapons in victorious battles, not merely “inscribing them
on coffee mugs and T-shirts.”
Crotonville, as Welch describes it, combines the “thirst for learn-
ing of academia with an action environment usually seen only in
small, hungry companies.” Animating GE’s culture of ideas is a mode
of thought linked to the core operating elements of speed and stretch
calledbullet-train thinking. Originated by the CEO of Yokogawa, this
metaphor signifies that if you want to increase a train’s speed by 10
mph, tinker with its horsepower; if you want to double it, break out
of conventional thinking and goal setting.
The fruits of thelearning culturereinforce the core operating
elements by producing additional mechanisms. Consider two big
ideas embraced at GE that also exhibit the speed and stretch phi-
losophy.Co-location, Welch says, is the “ultimate boundaryless be-
havior.” As “unsophisticated as can be,” it means conducting all the
functions for a product in one room without walls. All project par-
ticipants are simultaneously involved, including at the design stages
people from manufacturing and marketing as well as suppliers and
customers.Quick responseis a cycle-time reduction technique that
similarly erases barriers between functions for a product. With co-
location, it vastly reduces average inventory and proportionately bol-
sters inventory turnover.
Other fruits of this learning culture taken from outside GE help
implement the core operating elements.Demand Flow Technology
was borrowed from the GE customer American Standard to multiply
inventory turnover and move toward GE’s goal noted in an earlier
chapter of zero working capital.Quick Market Intelligence(QMI), a
strategy adapted from Wal-Mart to get direct customer feedback
weekly, “employs out-of-the-box thinking and cross-functional teams
dedicated to removing obstacles to cost reduction.” The Toshiba-
originated idea ofHalf Movement, another variation on the speed-
stretch operating elements, envisions each product being produced
with half the parts and half the weight in half the time.
Six Sigmaquality is perhaps the most famous concept Welch