GE and Jack Welch

Ideas and Techniques Adopted By GE from other Companies

1. American Standard, a customer of GE's Motors and Industrial Systems business, had been using a technique called "Demand Flow Technology" to double and triple inventory turnover rates and move toward a goal of zero working capital. GE teams successfully adopted it and obtained dramatic results in the Power Systems, Plastics and Medical Systems divisions.

2. Yokogawa, GE's partner in the Medical Systems business, had been using "Bullet Train Thinking" to take 30-50% out of product costs over a two-year period. This technique, which employed "out-of-the-box" thinking and cross-functional teams to remove obstacles to cost reduction, was fully operational in GE's Aircraft Engines business.

3. Quick Market Intelligence - the weekly direct customer feedback technique, was originally learned from Wal-Mart and implemented with great success in GE's Appliances business to improve asset turnover. "QMI" was adopted by GE Capital's Retailer Financial Services to drive the quality of customer service in its credit card operations.

4. Caterpillar reduced its service cost structure and new product introduction time through part standardization disciplines. The implementation of these disciplines was the key to the rapid new product introduction successes in GE's Appliances and Power Systems businesses, where product introduction cycle times were cut by more than half.

5. From Toshiba GE learned "Half Movement" - half the parts, half the weight, in half the time -- and it was expected to become a key element of engineering design philosophy at each of GE's businesses.

Jack Welch and other senior executives popularized the line "Best Practices has legitimized plagiarism," at GE, where the study of other high-performing organizations was institutionalized. At GE, employees were encouraged to borrow and implant excellent ideas that were not trademarked, patented or proprietary.

Analysts felt that by 1995, boundaryless behavior, an awkward phrase in the past, was increasingly becoming a way of life at GE. Jack Welch said, "It has led to an obsession for finding a better way -- a better idea -- be its source a colleague, another GE business, or another company across the street or on the other side of the globe that will share its ideas and practices with us."

Jack Welch felt that boundaryless behavior became the 'right' behavior at GE. He said, "...and aligned with this behavior is a rewards system that recognizes the adapter or implementer of an idea as much as its originator.