The late 1980s and early 1990s were renaissance years for process improvement, and Work-Out borrowed liberally from these ideas. Sociotechnical systems, quality management (as taught by W. Edwards Deming, Joseph Juran, and Philip Crosby), lean manufacturing, process mapping, the “wisdom of teams,” Motorola’s Six Sigma approach, and even reengineering, despite their differences and rival factions, were all in full flower. And they all had the same concept at heart: If you give people local autonomy and a reason to focus on improving quality, you can supercharge productivity on a global scale. With Work-Out, GE took that principle and rolled it out across a dozen separate large businesses; it was impressive how quickly and effectively Work-Out permeated the management culture.
The Work-Out initiative began as a natural outgrowth of GE’s newly revitalized conference center at Crotonville. After years of relative neglect, Mr. Welch invested billions of dollars in remodeling both the facilities and the curriculum, and much of his own time talking up its significance. His intent was to send a signal to the entire work force that management learning was now not just a frill, but a coveted prerequisite and central corporate value.
At the heart of Crotonville, famously, was “the pit,” an amphitheater-style classroom where the chairman engaged in candid give-and-take once every two weeks with the hundred (or so) managers in residence at that moment, exhorting them to take initiative and (as Crotonville’s first director, Mr. Baughman, recalls it) “get with the program,” that is, the Welchist rough-and-tumble style of management.
But rank-and-file GE managers didn’t find it easy to do so. Both in the pit and during plant visits, they complained that their bosses, their bosses’ bosses, and mountains of rules, some several decades old, shackled them. “We’re not experiencing openness,” they told Mr. Welch. “We don’t have enough voice in the direction of our unit or department.”
During a helicopter ride late in 1987, Mr. Welch and Mr. Baughman decided to create a series of town meeting–style events that would bring “the spirit of the pit” through the company and jettison the bureaucratic shackles. They’d call it Work-Out, as a pun on the toughening and slimming process that would (they imagined) drive the nonessential work out of the system.
Mr. Welch and Mr. Baughman convened a group of about 20 outside consultants who had all worked with GE before. Then, in a meeting at a hotel near New York’s LaGuardia airport, Mr. Welch laid out his three key principles:
- First, all Work-Out sessions would involve large cross-functional and cross-level groups, of 45 to 100 people each, to provide the kind of combustive diversity that you don’t get from intact teams.
- Second, all sessions would be led by a senior executive leader, who had to not just give his or her blessing but take part wholeheartedly.
- Third, and most controversial, that leader had to say “yes” or “no” on the spot to every idea presented at the session. Taking it under advisement for study was not an option.
Every GE business had its own Work-Out flavor; but they all took on first the “low-hanging fruit” of unnecessary reports, approvals, and meetings. Managers would ask each other, “Do we really need this purchasing requirement?” The nuclear business eliminated tedious Nuclear Regulatory Commission compliance rules that had been slavishly followed for years. Upon examination, it turned out those weren’t NRC rules at all; GE had imposed them on itself.
Mr. Welch, who wanted to avoid any semblance of formality, discouraged the Work-Out designers from keeping elaborate records. Thus, no one knows today how many people have gone through Work-Out sessions. But they did track the results of decisions made at the sessions. According to Steve Kerr, all but 9 percent of the approved ideas were followed through — a record probably better than that of any other process in the company. There were other indicators of Work-Out’s positive effects, such as the number of midlevel managers and even union workers who spoke up at Work-Out sessions, took charge of implementing changes they suggested, and rode that success to a more vibrant career.