The idea of knowledge management has been around for more than a decade, and like many ideas, it has morphed over time. However, the basic principle—that in an information economy, ideas and expertise are the real high-value assets—becomes more valid with each passing year. GE is a pioneer in knowledge sharing, which is how a company that has operations spanning a range of sectors, from aviation to medical equipment to consumer goods and finance, can thrive. Similarly, career paths at GE often span business units, markets, and functions, as a way to ensure that the best ideas spread.
The latest frontier in knowledge management is to not merely manage knowledge internally but externally as well. The best organizations share knowledge with their customers by providing the tools, processes, metrics, and other techniques they need to help grow their business. It seems counterintuitive, but these companies seek to give away some of their best ideas—unique and often proprietary insights—under the rationale that it’s not what you know that truly matters, it’s what your customer knows.
That said, external knowledge management is a challenge. How do you share what you know with your customers? How do you step outside your role as a service provider and become an integral part of your client’s business? GE Capital offers a case study in how to make it happen.
Access GE is the company’s initiative in customer-oriented knowledge management. The program connects the customers of GE Capital—mostly fast-growing midsized companies—with the knowledge and expertise from all corners of GE. Essentially, GE Capital’s relationship managers sit down with their clients and say, “Here’s what we know—now how can that knowledge help your company? Or, What are your challenges to success so we can see how else we can help your business?” It’s part of GE Capital’s ongoing effort to be more than a finance provider for its clients. As the company puts it, “We’re not just bankers, we’re builders.”
This has long happened within GE Capital on an informal level. The engagements were driven primarily by the GE Capital sales staff and designated leaders in specific markets, but there was no central, comprehensive database of experts encompassing all areas of GE. There also wasn’t a way for customers to access any of the information themselves.
So a few years ago, the company began making this process far more systematic and formal, to allow for scale across GE businesses and geographies. After all, if internal knowledge management requires dedicated efforts and resources—along with specific mechanisms to foster collaboration—external knowledge management with customers should as well.
The result is Access GE, which turns knowledge management around and considers business-critical insights from the customer’s perspective. What are the most salient issues that midsized companies wrestle with? For some organizations, it could be entering new markets, or segmenting customer prospects. For others, it could be hiring, retaining, and developing talent. For still others it could be reducing costs, improving manufacturing processes, or strengthening risk-management capabilities.
Access GE organizes those topics into four broad areas where customer needs are greatest and GE can offer the most impactful expertise: growth and innovation, operational effectiveness, leadership development, and finance best practices.
Channels are critical as well. GE still shares knowledge with its GE Capital customers over the phone or in face-to-face meetings, but advances in technology allow new ways to tap into this expertise, by offering access above and beyond the human component. The latest Access GE offering is a web portal, which gives clients access to more information than ever before, in various formats: externally sourced, internally sourced (i.e., material from experts within GE), and personal interactions. It’s a buffet of information, where GE Capital clients have multiple options both in the areas they need the most help with, and the channels through which they want to receive that information. GE Capital provides a sampling of key content offerings from the portal and offers them on a free Access GE app, which is available on both the Apple and Android platforms.
The Access GE portal includes several categories of content—all vetted by senior leaders within GE. The vetting process itself reflects the commitment to this program at the highest levels of GE management. The first content category contains internal material from GE, including intelligence and data on specific geographic markets and industries, along with white papers, case studies, diagnostic tools and assessments, Webinars, and videos.
The second content category contains externally-sourced thought leadership material from GE Capital’s highly-valued partnerships including Booz & Company, Harvard Business Review, McKinsey & Company, Deloitte, the Economist Intelligence Unit, and others. All are indexed and fully searchable by topic. These first two categories allow GE Capital customers to “self-serve” from the buffet, by tapping into the material that best addresses their needs.
The portal also offers access to more than 400 GE experts, who work with GE Capital clients through one-on-one consultations, and also offer broader workshops or online community events. Last, the portal includes a social networking component, so that GE Capital clients can communicate directly with their peers—other mid-market companies—in order to share ideas, talk through specific issues, and brainstorm solutions. (In that way, the portal is a platform for fostering knowledge management among GE Capital’s customers.)
Bottom line? Access GE represents a bold proposal that GE Capital can win in the marketplace by helping its clients win. Greater customer satisfaction among GE Capital clients—along with improved business results—will lead to stronger banking relationships, and a banking experience that is different from anything else out there in the mid-market space.
Perhaps the best illustration of how Access GE works is to show how it has helped two specific companies.
AIP Aerospace is a mini-conglomerate of manufacturers: five divisions spread across California, Michigan, and Texas, with about $210 million in annual sales. One of those divisions is Composites Horizons, a company in Covina, California, that supplies aviation components. As the name indicates, its specialty is composites, or lightweight, high-temperature, high-strength parts that have replaced metals in many areas of commercial and military gas turbine engines. These parts have extremely rigorous quality standards that match the demand of today’s highest performance engines. The temperature of the combustion chamber in modern jet engines can approach 2,000 degrees Celsius (or about 3,500 degrees Fahrenheit), and these engines are rated to last several thousand hours before requiring maintenance. High temperature composites have found their way into these engines both upstream of the combustor in the fan, and downstream in the bypass and external exhaust structures.
For the past 20 years, Composites Horizons has supplied GE’s aviation unit, where its products go into the engines for aircraft like the F/A-18 military jet, the Boeing 777, and the Boeing 787. About two years ago, Composites Horizons had an opportunity to expand that relationship. GE’s aviation unit was about to stop manufacturing a critical engine part internally, and it sought outside vendors to make the part instead. Composites Horizons won the bid, which was good news, but the contract also presented some challenges due to the complexity of the component, the variability of the materials involved, and the significant demand for this part.
To prepare for this program, Composites Horizons invested in new equipment, including an autoclave, akin to a giant oven that can “bake” components under high temperature and pressure, a necessary step when working with polymers and other advanced materials. The company used GE Capital to finance the equipment, and the GE senior relationship manager also realized that the expansion would require bringing more electrical power into the facility. Composites Horizons already had an order in place for the electrical distribution panel, but GE sold a similar unit (through its GE Energy division), which met the same specifications yet cost 30 percent less. Composites Horizons selected the GE product, which established immediate credibility for GE Capital.
But the Access GE component was where the relationship really accelerated. First, GE conducted an energy audit, to ensure that Composites Horizons was being as efficient as possible in its use of electricity, water, and other resources. GE calls the process an “Eco Treasure Hunt,” in that the goal is to identify areas of savings that collectively add up to real value. Some Eco Treasure Hunts have yielded millions in annual savings.
Next, Composites Horizons needed some help with its manufacturing processes. The new component required advanced engineering and a series of complex manufacturing steps. Early on, Composites Horizons was having a hard time meeting demand. “We knew we had some bottlenecks,” said Jeff Hynes, president of Composites Horizons. “We were struggling to produce seven units a month.”
Through the Access GE program, Composites Horizons requested some help from GE regarding lean manufacturing techniques, to identify and eliminate any inefficiencies in the production process. Composites Horizons had worked to implement lean manufacturing in the past, dating all the way back to 1999, and while those efforts had generated some progress, they hadn’t really transformed the company’s operations.
At GE, lean manufacturing is a major part of how the company functions on a day-to-day basis. It has 3,000 employees who have earned the highest possible lean certification, and nearly 30 years of experience working with lean tools and techniques. As part of the Access GE engagement, several GE experts in lean manufacturing worked on-site with Composites Horizons to analyze the way the new part was being produced.
The problem? Composites Horizons hadn’t yet standardized its manufacturing for the new part, which had some tricky aspects. The company still had factory workers shepherding the component through each production step. “There’s a thermal process, a vacuum process, and some other things, and it all has to happen in a very specific sequence,” said Hynes. “That meant we had a lot of dead time between steps.”
To change that, the GE team helped Composites Horizons establish a standard work process for the component, similar to an assembly line. They identified each step, how long it should take, and how the steps should be staggered to ensure that the facility was operating at maximum capacity. The team even implemented a Takt clock, a standard lean technique that calibrates ideal production to actual customer demand (instead of simply producing as many units as possible, or as fast as possible), and determines the right amount of time for each step.
Once Composites Horizons reoriented its production process, it quickly went from shipping seven units a month to 15, and downtime for the company’s new equipment was reduced by 45 percent, from 18 hours to 10 hours per month.
Once Composites Horizons reoriented its production process, the results showed up immediately. Instead of struggling to ship seven units a month, Composites Horizons quickly started shipping 15. And soon thereafter, the company was on track to ship 20. Not only is it now meeting its contract demands, it’s also producing buffer stock for the U.S. military. At the same time, downtime for the company’s new equipment was reduced by 45 percent, from 18 hours to 10 hours per month.
Composites Horizons now has a full-time manager on staff who is solely responsible for lean manufacturing techniques, with the title of “director of continuous improvement.” That role has helped the company improve its operations. “It’s become part of the culture,” said Hynes.
Through Access GE, several other divisions within AIP Aerospace tapped into GE’s institutional expertise as well. One sought advice on how to improve machine accuracy, through better calibration. GE Capital even set up a meeting between a divisional CEO and GE’s director of commercial aviation in China, to discuss potential joint ventures in that market; those conversations are still ongoing.
In a way, the aviation market is one of many sweet spots for GE Capital, given the company’s expertise in that industry. GE developed the first jet engine in the U.S., and its products propel commercial and military jets around the world. (One of its engines, the CF6, first entered the market in 1971, and upgrades of that engine are still in the air today, in planes like the Airbus 330 and Boeing 767; in all, the CF6 family has more than 367 million flight hours.)
As Gib Bosworth, senior vice president at GE Capital, corporate finance, and leader of two units—U.S. aerospace and defense specialty—puts it, “At GE, we have a $50 billion commitment to the aviation market. So I understand the needs of our clients. Customers don’t have to explain to me what composite material is. With other bankers, you’d have to start on page one, but I’m already with you on page 50.”
These advantages have helped Composites Horizons—and all of AIP Aerospace—significantly increase its operational prowess. “For any U.S.-based manufacturing company,” said Hynes, “if you cannot be smarter in how you do things, it’s only a matter of time before you’ll lose out to lower costs overseas.” Access GE has been a critical part of that improvement process.
Based in Arcadia, Wisconsin, Ashley Furniture has grown from a small manufacturer specializing in occasional tables and wall units to the number one furniture retailer in the United States and the world’s largest furniture manufacturer. With five production facilities in the U.S., four overseas, and 470 owned and licensed retail stores, the company has about $4 billion in annual sales (up from just $900 million in 2000).
Ashley is poised for a major global growth phase, which requires that it develop current and future leaders to oversee the expansion. A key part of this is to benchmark with organizations that have a strong reputation for developing leaders.
For the past two years, GE Capital’s Retail Finance unit has been working with Ashley to help its customers finance their purchases. Recently, GE launched several Access GE engagements with Ashley primarily in leadership development. Ashley is poised for a major global growth phase, which requires that it develop current and future leaders to oversee the expansion. A key part of this strategy is to benchmark with outside organizations that have a strong reputation for developing leaders.
GE takes leadership seriously and knows how to cultivate those attributes in its people. Some 90 percent of the company’s top executives have been promoted from within the organization. It was voted one of the 20 Best Companies for Leadership (Business Week 2011) and No. 1 Company for Leaders (Forbes/Hay Group 2012). And its investments reflect this emphasis: GE makes a significant investment in employee training and development each year.
In January 2013, Todd Wanek, Ashley’s owner and CEO, brought several executives from the company’s HR, strategic planning, and continuous improvement groups to GE’s Leadership Development Center in Crotonville, N.Y., for a day-long session. The session was led by Cynthia Tragge-Lakra, executive vice president, human resources, GE Capital Retail Finance, and it focused on GE’s leadership philosophy, the organizational structure that supports it, and the process that GE went through to make leadership development a top priority.
The session was partly built around some existing materials that GE uses to communicate these ideas to its customers, but much of it was a closed-door, frank discussion about GE’s successes and failures in implementing similar measures. Overall, the experience gave Ashley critical insights and some clear first steps—develop an operational calendar that defines specific objectives by month, solidify organizational values, rebuild existing performance management and succession planning programs.
Ashley prides itself on its heritage. Its mission statement is straightforward—“We want to be the best furniture company”—and its business model is built on four pillars: quality, style, selection, and service. By integrating these components into its performance management, Ashley is now realigning its organization and management methods on the expectations of its customers: efficiency, speed, quality, and great service, all at a great price.
Employee assessment was also a major part of the discussion. Until then, Ashley had been using relatively basic metrics to gauge performance—e.g., did the employee hit his or her operational goals for the year?—with no explicit links into its values. That approach worked at a basic level, as evidenced by the company’s sales growth over the past decade, but if Ashley was to succeed in the coming expansion phase, it would need to establish some clear strategic objectives and ensure that the entire organization was growing in the same direction.
There was even an architectural component to the session. Because Ashley is adapting to the challenges of the 21st-century workforce, it is considering building its own internal training center. To that end, Ashley’s executives spent time studying the design of GE’s Crotonville facility, including the ceiling height, type of lighting, arrangement of desks around a central recess in classroom floors, and other aspects. The goal was to take away anything that would help create an environment that’s more conducive to collaborative learning, instead of the traditional lecture-style format.
Several months later, Ashley planned to bring back a larger contingent to GE’s Crotonville facility—including some of its retail store owners and operators—for an expanded version of the session. Todd Wanek explained, “Access GE has been a great resource for us as we ramp up our own best practices in leadership development.”
There are many other customer success stories; Access GE completed more than 1,000 engagements with GE Capital clients in 2012 alone. While they range across the four main areas of expertise—operational effectiveness, growth and innovation, leadership development, and finance best practices—they’re all supported by a common foundation that is sharing GE’s expertise, tools, and insights to add value for GE Capital customers that goes far beyond financing.
The Access GE App, at app.accessge.com.
A Composites Horizons technician tests a component before it goes into the company’s high-temperature autoclave.
Image courtesy of AIP.
Access GE organizes knowledge by principal customer needs and sub-categories.
Ashley has more than 400 retail furniture stores.
Image courtesy of Ashley Furniture.