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    New Blog Address: management.curiouscatblog.net

    Thursday, July 14, 2005

    Fast Company Interview: Jeff Immelt

    Fast Company Interview: Jeff Immelt, CEO, GE.

    What makes a growth leader today, and how does that differ from the sort of leader who was effective at GE in the past?

    GE has always been a believer in leadership development. When the economy was growing 5% a year, when oil was $14 a barrel, and when the world was at peace, the science of management was all about the how-to. That was the how-to generation. You didn't have to think about the what. Instead, there were management initiatives such as Six Sigma, which was the how.

    So most of management literature, certainly for the past 10 years, was all about the how-to. I think we're now in the what-and-where generation. Global economies are slow and more volatile. Oil is at $50 a barrel. So this ability to pick markets, growth trends, customers, and to do segmentation -- that is management today. We have a generation of people who know how to do process flow charts. We have a generation of people who know how to do quality function deployment and things like that, but don't necessarily know why we're doing them. What's the what and the where? I believe that wholeheartedly. Nothing is completely black and white, but we are in a completely different cycle of what good managers know how to do.


    I must say this doesn't make much sense to me, but I am not the CEO of a huge company so maybe I just don't understand. I don't see any reason why managers in the past shouldn't have had the qualities he seems to be saying are needed now. And I don't see any reason why the qualities needed now were not needed in the past. This sure seems like a bunch of words saying nothing to me: perhaps I just don't see the wonderful cloths the emperor has on.

    My guess would be that what lead to this quote is not a lack of understanding that managers need the same qualities today they needed 10 years ago but the compulsion to feed the media frenzy for some incredible new insight. It just isn't sexy to say "we need the same leadership qualities we needed in the past." Deming stressed the importance of these "new" qualities he states more than 50 years ago and I think most decent managers have know you need to "know why we're doing them" (QFD or whatever Quality tools).

    I don't see any management quality required in:

    So this ability to pick markets, growth trends, customers, and to do segmentation -- that is management today."


    that wasn't needed 10 years ago just as much as it is today?

    Thinking the "how to" is unimportant is something I can't even believe is being said. In fact, it is almost a given that you must be performing the "how to" very well and continually improving that performance (or have a bunch or really lousy competing companies that allow you to fail to do so and stay in business - airlines in American might be a good example of this). Execution ("how to", operational excellence, lean thinking, process improvement...) is among the most important factors today, as it was 10 years ago and will be 20 years in the future. Maybe I am wrong but in my opinion Toyota, Dell, Walmart are examples of what is being done by companies that execute well. My belief is they will continue to win customers due to that execution for many years into the future.

    Customer focus and innovation would also be at the top of the list of important issues and were 10 years ago and will be 20 years from now. What is important for management is does not change much.

    occasionally innovation is so dramatic it drastically changes the practice of management, two examples:
    1) the use of information technology
    2) the whole quality movement [Deming's ideas, SPC, Toyota/Lean, Six Sigma...

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