Lecture given on 25 September 2003 in HHL's MBA Leadership Seminar.
The lecture draws on lessons on leadership from GE where Johannes Meier was CEO of the subsidiary GE CompuNet from 2000-2003.
Contemporary Economic Issues Facing the Filipino Entrepreneur (1).pptx
Moving the normal distribution in a large organization
1. Moving the normal distribution
in a large organization
Dr. Johannes Meier
25 September 2003
HHL
2. Agenda
Introduction: Where is the Problem?
Tools for Moving the Normal Distribution
The Essence of Performance Culture
Conclusion: What Does It Mean For You?
3. Introduction
Large organizations
Normal distributions of talent, skill, will
So why do systems like GE function so well?
How can managers influence the normal
distribution?
What are important tools of the management
system?
Finally, what is the entry fee into the system?
4. Return on Capital Employed
Improved Performance
Merger Tax Credits
Revenue
Divestments
Net Cash Flow
Operating Costs
Personnel Reductions
Net Income
SENSE OF
URGENCY
FLEXIBILITY
The Neo-Liberal Context
5. Tools for Moving the Normal Distribution
1. Common Language and Good Communication
2. Process Management and Generic Heuristics
3. Creating Organizational Flexibility
4. Focus on the Tales of the Normal Distribution
5. Performance Culture
6. 1. Common Language
Common language preprequisite for
communication, comparing performance, best-
practice sharing, learning
Example: Semtiocs of Net Income Categories
Denotation (NI >25%, 10-25%, 0-10%, Fix-Sell-
Close)
Connotation (Hero vs. Loser)
7. 1. … and Good Communication
Good Listening
Elegant Simplification
Authenticity
Consistency
Relentlessness
8. 2. Process Management …
6Sigma driving process management
Driven by customer (internal and external)
COPIS = Customer Output Process Input Supplier
Stringent project management
DMAIC = Define Measure Analyze Improve Control
10. Fix it - Mindset
Multi-generational plans
„It will get better every month, every quarter, every year“
No silver bullet, but attention to detail
„The harder you work, the luckier you get.“
“Always be more prepared than the other guy
… it is not about luck.”
Quick action
“When you smell smoke, there usually is a fire.”
11. 3. Creating Organizational Flexibility
Organizational flexibility
capability to move individuals freely within the
organization to a best match of their capabilities and the
organization‘s needs
Grading (Session C)
Succession Planning (Session C)
Action Learning & Coaching & Hyper-mobility
12. Session C - Grading
7
gGE Capital IT S olutions – GE CompuNet -
Direct Reports
G. B. σ
A. K.
E. S.
K. Sc.
S. M.
M. P.
U. L. CR CR
G. K.
Key: Excellent: Satisfactory:
Needs Improvement: Cannot Rate: CR
4 months or less in position
~20%
~10%
P o t e n t i a l
~70%
High Medium Limited
Summary Assessment
P
e
r
f
o
r
m
a
n
c
e
CustomerFocusEnergy
Energize
Edge
Execution
e-BusinessSixSigma
Values/Initiatives Input
Banding Decision:
• Banding K. EB
• Banding L. LPB
• Banding Ku. LPB
K. (4/L)
L. (3/L)
Sc. (3/M)
P. (3/L)
B. (1/H)
S. (3/M )
K. (2/M)
M. (3/L)
for E-Bands: use Black font and
for SP-Band: use Blue font and
for LP-band: use Green font and
for below LPB: use red font and
Up Since ‘01 C
Down Since ‘01 C
Performance change only
= Female
= Minority
σ = QL/MBB/BB Experience
= Non-country Citizen
13.
Focus on Top 20% - „love them to death“
Incentives
Trainings
Mentoring
Critical Assignments
Focus on Top 10% - „take action“
New job
Exit
Comment: Tough to implement in European labour law context
4. The Tales of the Normal Distribution
14. 5. Performance Culture
Performance culture grows over decades!
Key elements of GE performance culture
Commitment
Making your numbers
Annual productivity increases
Personal career progress and development
Strong emphasis on measurements
„you get what you measure“
15. What is in a number?
Goals & Objectives driven by many (!) numbers
Over-determined system of goals
Stretch targets
Many good soldiers on dedicated „missions“ to
keep corporate initiatives in focus
Good management = Finding right priorities