Kevin Meyer

Life and leadership at the nexus of lean and zen.

Leadership by Welch, Immelt… and Layer

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By Kevin Meyer

Regular readers know that I’m no big fan of Jack Welch, to put it mildly.  My opinion is shared by many in the lean world, at least those that recognize that the second, oft-forgotten, pillar of lean is “respect for people.”  A concept diametrically opposed to Welch “leadership” methods.

Unfortuntely the idol worship took hold.  A generation of GE “leaders” and Welch worshippers barfed forth onto the business world and proceeded to decimate American manufacturing, and common sense for that matter.  Welch held, and to some extent still holds, a power unrivaled since the pagan idols of ages old.  I believe this was a significant contributor to the economic malaise of the last several years as the gullible followed his advice to outsource, chase cheap labor, whack employees, and measure success and value purely by the increase in stock price.

Under Jack’s successor, Jeff Immelt, GE has started to return ever so slightly to the real world.  Some GE folks have realized the fallacy of chasing cheap labor and have even decided to move appliance manufacturing back to America.  The company even claims to have “discovered lean“… 25 years after many other companies.  So be it, kudos to where kudos are due.

But they still have a long ways to go, especially from a leadership, particularly servant leadership, perspective.  That was reinforced again this past week when Immelt penned a piece for LinkedIn on How to Differentiate Great Leaders from Good Leaders.  In it he lists five questions he uses to discern great from the merely good:

  1. Is the leader self-aware?
  2. Is the leader committed to the organization and do they drive change?
  3. Is the leader a giver or a taker?
  4. Is the leader a critical thinker?
  5. Does the leader have a dream for themselves and the company?

Good characteristics, but the lean cognoscenti will immediately recognize a couple missing key aspects of real leadership.  Before I get to that, let’s compare this list to another article published last week.  This piece was by Mike Myatt, in Forbes, describing Brigadier General Brian Layer’s 10 Ways to Make Each Day a Leadership Masterpiece.  The ten:

  1. Excel in the moment.
  2. Invest in a relationship and build trust.
  3. Help someone else achieve and grow.
  4. Listen.
  5. Connect someone to your vision, mission, and priorities.
  6. Thank someone.
  7. Prepare for the known and study for the unknown.
  8. Prepare for an important decision.
  9. Leverage white space.
  10. Grow physically, mentally, spiritually.

Now… compare that to Immelt’s list.  Everyone should be able to see what’s missing – the core of real leadership.  And why Immelt and GE still have such a very long ways to go.  I’ll distill it down to two key concepts:

  1. Leverage people… including yourself.
  2. Learn… and teach.

I’ve discussed both many times in the past as they are my personal hot buttons. Respect for people is a core pillar of lean, and not recognizing that is probably the primary reason lean transformations fail.  Do you consider people a cost, or a value?  A liability, or an asset?  Regardless of what your traditional P&L tells you, and what that mission or vision statement on the wall, which hasn’t been looked at in years, says.  Are people really your most important asset?  If so, how do you protect, nurture, and grow that asset?  Or do you just fly all over the world chasing a lower cost for the hands attached to the valuable brain you ignore?  Be honest…

In a somewhat similar manner since it also leverages people, I’ve also found that the best leaders are those that voraciously seek out and consume knowledge, then distill, implement appropriate new concepts, and especially teach.  In my experience this has also become a consistently powerful predictor of future leadership ability.  Do you augment your leveraging of people by mentoring and raising the knowledge level of your organization?  Not just by paying for training, but by making a personal commitment of time and effort?

Brian Layer gets it.  He’s a leader that challenges himself, is humble, and recognizes the value of people.  Jack and Jeff could learn a thing, or actually two, from him.

Of GE and Boeing

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By Kevin Meyer

While the world watches Boeing and the FAA trace a 787 Dreamliner battery problem from Seattle to Japan to Arizona to Italy then back to Japan, our recovering outsourcing addict friends at GE continue to move in the right direction.  Maybe there should be a twelve step program for supply chain managers that still believe outsourcing helps lower costs.  Well, true overall costs I mean – not just the labor costs shown on a P&L.

The Wall Street Journal this morning gives us more news of GE's about face.  And this time it's not just a realization that chasing low labor costs doesn't work – they've already moved some appliance manufacturing back to the U.S. based on a true overall cost analysis.  Nope, this time it's a realization of how outsourcing can impact the safeguarding of key technologies and processes.

As Boeing Co.pays a price for having farmed out crucial parts on its new Dreamliner, General Electric Co.'s aviation division is busy bringing work on its engines back in-house.

In late December, GE Aviation agreed to buy Italian parts supplier
Avio for $4.4 billion. That comes alongside the acquisition of a
three-dimensional printing company, a joint-venture with a component
casting company in Montana and another venture to secure access to a key
raw material—silicon carbide, which is used to make high-tech ceramic
parts.

This year, GE plans to open a pair of parts factories in Mississippi and Alabama and soon will announce the location of a third.

The reason:

The strategy is aimed at safeguarding a key source of the industrial
conglomerate's sales.

By doing more of the work itself, GE hopes to protect its technology,
speed up development and secure supplies of needed components. The move
is a turnabout for a company that helped pioneer soup-to-nuts U.S.
manufacturing and then switched gears to help pioneer industrial
outsourcing.

This renaissance of clear thinking isn't just happening within the aviation division.

GE now plans to replicate its new vertically integrated approach
across its businesses from gas turbines to medical imaging devices to
subsea oil wells.

"We want more under our control," said Colleen Athans, who runs
supply chain management for GE Aviation. "Rather than pay a supplier to
do it, we would like to protect our intellectual property."  Late last year, Ms. Athans gave GE's board of directors a
presentation on the moves undertaken by the aerospace unit as a model
for GE's other divisions.

It's not just a direct cost equation anymore.  Now it's about the long-term strategic business implications of long, fragile supply chains.

The article goes on to bash Boeing, which has become the poster child for understanding how outsourcing can influence more than just direct labor cost.  Funny, I predicted there might be a problem… six years ago.  And I'm not boasting about my crystal ball – just a little common sense from understanding that you can't run a business by focusing purely on traditional financial statements.

One final mostly unrelated tidbit. 3D or additive printing technologies are fascinating.  In case any of your didn't think they are in the real world yet, here's your evidence:

Last year, GE Aviation bought Morris Technologies, an additive
manufacturing company outside Cincinnati. GE will use Morris's 3-D
printing machines to make the guts of the fuel nozzle on its Leap
engines. The equivalent part used in existing engines is made by an
outside supplier that brazes together 21 tiny pieces.

Coming to a plane near you.

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