Blow Away Your Competition by Replacing Your Old CRM Program with the New Customer Relevant Relationship Management (CRRM) Model – Part 2: The Necessary Components.

1) Introduction:

In my previous blog, I covered what the new Customer Relevant Relationship Model (CRRM) is and the benefits of adopting this new model. In this blog, I will cover the components of the new CRRM model and what you need to put in place to make this new model a reality.

Ever wonder why companies like ESPN, Apple, Google, Zynga, Amazon, and Marriott dominate their respective markets? The reason is that they are ‘Customer First’ organizations and are passionate about listening to, understanding and then delighting their customers based on leveraging true customer insights. They treat their customers as business partners vs. commodities and include them in many critical decision making processes. They get this new CRRM model. Why/how ? – Read the rest of this blog to find out…

The differences between the old CRM model and how these companies are embracing the newer CRRM model are depicted in the following chart:

The Old CRM Model vs. New CRRM Model – Customers as Business Partners

2) Customers are fed up with old Dictatorial Management Style & Want to be Empowered as Business Partners

Customers and stakeholders today are longing for a company to partner with them and include them in the corporate decision making process.  These same constituencies are sick and tired of political, corporate, and other organizations making unilateral decisions for them that are really not in-line with their needs,  wants, etc. The backlash from this unwanted dictatorial management style of some companies can be seen in the Bank of America fee customer rebellion, the customer backlash from Netflix deciding to  split their company without first consulting with their customers and HPs initial decision to exit the computer market.

3) Components of the New CRRM Model:

In order to progress your organization from the old CRM model to the new CRRM  model, a few key essentials must be put in place and are as follows:

A. New CRRM Model that includes the 360° Cultivation of Customer & Market Insights.  This model enables a 360° view of all customer and market insights including customer feedback, preferences, likes, dislikes, social sentiment, competitor activity, etc. This new model takes your insights to an entirely new level whereby you are now enabled to delight customers, stakeholders and stockholders by having insights that are light-years ahead of insights provided by a traditional CRM model.

B. Customer First Culture driven by management that is passionate about their customers including a set of customer first principles and guidelines developed by company leaders

C. Customer Ratings & Feedback Structure that will identify areas where you will collect customer 360° feedback from customer and stakeholder interactions

D. Customer Feedback & Preferences Cultivation Process and corresponding infrastructure in order to allow your customers to continually rate how well you are serving them

E. Customer Health Scorecard that provides real-time insights on how well the customers, stakeholders and stockholders perceives you as serving them as well as insights into a Continuous Customer Improvement Process (CCIP) that enables you to continually improve your customer perceptions, satisfaction, brand loyalty, etc.

These components can apply to large enterprises as well as Small to Medium Businesses (SMBs).

The following graphics are all sample components from the list above (A-D) that need to be put in place to enable this new CRRM Model.

New CRRM Model – 360° Cultivation of Customer & Market Insights

 3A) The above chart “New CRRM Model – 360 Cultivation of Customer & Market Insights” demonstrates the new insights model that must be put in place to deliver world-class stakeholder and customer programs.

These enhanced insights will enable you to deliver products and services that delight your customers, stakeholders and stockholders as well as enable you to leapfrog the competition in terms of market share if they continue to rely on their antiquated CRM data and analytics insights only model. 

For Small to Medium sized Businesses (SMBs), some of the insights do not apply, but the following charts (3B-3E) most certainly apply and can be tracked via simple Microsoft Excel spreadsheets.

CRRM Customer First Policies & Organizational Principles

3B) The above chart “CRRM Organizational Guiding Principles” demonstrates the principles that must be in-place to be customer first culture. This culture is driven by management that is passionate about their customers and governs the company around a set of customer first policies.

Sample Enterprise CRRM Customer Rating & Feedback Structure

3C) The above chart “Enterprise CRRM Customer Rating & Feedback Structure” illustrates a sample structure (will vary for each type of business) whereby customer feedback and preferences will be cultivated in order to develop 360° insights into customer needs, wants, likes, etc.

Enterprise CRRM Customer Feedback & Preferences Cultivation Process

3D) The above chart “CRRM Customer Ratings & Feedback Cultivation Process” illustrates a how customer feedback and preferences will be cultivated in order to develop 360° insights into customer needs, wants, likes, etc.

Sample Enterprise CRRM Customer Scorecard Ratings Visualization

3E) The above chart “Enterprise CRRM Customer Scorecard Ratings Visualization” illustrates a how customer feedback and preferences ratings will be visually represented in a scorecard. 

Sample Enterprise CRRM Customer Scorecard Metrics

3E-2) The above chart “Enterprise CRRM Customer Scorecard” illustrates a how customer feedback and preferences ratings will be rolled up into an analytical scorecard that provides insights into customer trends,  customer feedback, customer issues, core customer strengths and weaknesses, etc. 

This scorecard can also be used to manage a Continuous Customer Improvement Process (CCIP) that continually drives improvements to customer perceptions, ratings, satisfaction, etc. 

Sample Scorecard for “Shopping Experience”

The above depicts how analytics and metrics would be maintained for a business who had a retail or wholesale shopping function.

Sample Shopping Experience Scorecard – #2

Robust Scorecard Analytics and Metrics should support Customer Trend Identification and Root Cause Analysis for Customer Issues.

Sample Branding & Public Relations Scorecard

Sample Public Relations Scorecard Above gives you insights into how well your company and brands are perceived by customers, stakeholders, stockholders, etc.

Sample Customer Service Scorecard

Sample Customer Scorecard Above from Customer Service tells how well you are serving your customers.

Sample Marketing Scorecard

Sample Marketing Scorecard Above Gives you insights into how well your Marketing Efforts are resonating with your customers.

Sample Product Management Scorecard

The Sample Product Management Scorecard above gives you insights into how well perceived your products and services are with customers and prospects.

4) Company & Customer Benefits of Adopting the CRRM Model:

By treating customers as business partners (vs. commodities) and including them in the corporate decision making process, as well as allowing them to rate how well you are serving them from an array of customer facing areas, companies can reap huge rewards including the following:

1. Better insights into the types of products and services customers want & need

2. Fiercely loyal customers who feel part of the corporate team

3. Customers who are most likely to spend more, be retained longer and purchase at premium prices with higher profit margins

4. Customers who are very likely to be brand advocates and refer others to your company, brands, and services.

5. Customers who feel connected to the company and empowered to improve company operations

The following are actual customer comments from those who have participated in a customer feedback program to help shape products & services:

“I feel like xyz company cares about me since they ask my opinion”

“Finally a company that listens to us”

“It is so refreshing to have a company ask you your opinions on products and services vs. ramming something down our throats that we don’t like”

“Wow – this is fun. I enjoy providing my opinion”

“As silly as this might sound, xyz company is the only company that ever asked me what I wanted”

“In my opinion, xyz company is much more progressive than their competitors by seeking consumer opinions, what matters to them, etc.

 5) Conclusion:

More dynamic companies like Goodle, Zynga, Amazon, etc. are inviting customers to become part of the corporate decision making process and empowering them to provide feedback, insights and rate company operations in order to drive continous customer improvements. Companies who adopt this new CRRM model whereby company management is democratized by including stakeholders and customers into the decision making process will reap the rewards of ever higher customer acquisition, retention and spend – leading to ever higher profits and share price.

Blow Away Your Competition by Replacing Your Old CRM Program with the New Customer Relevant Relationship Management (CRRM) Model

Blow Away Your Competition by Replacing Your Old CRM Program with a more effective Customer Relevant Relationship Management (CRRM) Model

1)               Introduction

  1. Do you have a robust CRM program in-place, but you feel you are still missing the mark in terms of delivering what your customers really want & need?
  2. Is your organization at risk of making market decisions that can cause a backlash and mass defection by your customers like the Bank of America $5 fee decision or the Netflix business split decision?
  3. Do you have volumes of consumer data and analytics, but sales are declining or flat and customers are churning at an increasing rate?
  4. Do you feel you could improve the quantity and quality of your customer insights including ascertaining critical consumer needs, preferences, likes/dislikes, interests, preferred communication channel for you to contact them, preferred timing and frequency for you to communicate with them, etc?

If you can say “Yes” to any of these questions, the rest of this post is a MUST READ for you and it is time to consider this more effective CRRM Model to replace your outdated CRM Model.

2)               CRM vs. CRRM Model Overview

The following diagram depicts the major differences between the old CRM Model and the new CRRM Model including the problems associated with the old CRM model and benefits of the newer CRRM model.

Old CRM Model vs. Customer Relevant Relationship Management (CRRM)

Old CRM Model (left above):

  1. Relies on historical data and analytics to determine what customers need, want, etc. by the analysis of sales history, types of products purchased, categories of products purchased, views on websites, stores visited, etc.
  2. Customer activity information is a proxy to what customers really want and need. Example, you will seldom learn that a customer hates an in-store or web experience through this proxy for what they are wanting, feeling, needing, disliking, etc.
  3. Companies are unlikely to gain insights into the impact that any future company decisions will have on customer loyalty, retention, acquisition.

New CRRM Model (right above):

  1. Takes a more direct approach with customers and utilizes a systemic querying method to ascertain exactly what customer want/need/prefer/etc.
  2. Embraces customer councils, customer forums, customer voting to drive future content, interactions, product/service offerings, etc.
  3. Activity solicits ratings from customers on many aspects (marketing materials, web experience, in-store experience, product usability, quality of customer service, etc.) regarding the health of the overall customer relationship and continually asks “How well are we managing our relationship”

3)               Example of CRM Model Gaps

To illustrate how companies are struggling to really determine the real needs of their customers, I took selected comments from interactions with senior CRM executives from major US Corporations based on consulting engagements, job interviews, speaking to them in passing, etc. The following charts are their actual verbatim comments as well as my read on their CRM gap that prevents them from developing world-class relationships with their customers.

Traditional CRM Programs:

  1. Organizational culture, operations, and go-to-market strategy does not put the customer and real customer insights into the center of CRM operations
  2. Relies on data, analytics, and customer history to drive on-going customer interactions.
  3. Puts the organization at extreme risk of missing the boat from a customer’s perspective – real needs, wants, concerns, preferences, experiences, etc.
  4. Companies that rely on this model are at-risk of customer defections, decreased customer spend/loyalty, etc.

New CRRM Model – with Customers In The Center of Customer Operations

New CRRM Program:

  1. The organizational culture, operations, and go-to-market strategy puts the customer and real customer insights into the center of CRM operations rather than rely on the proxies of what customers want, i.e. data, analytics, and customer history.
  2. The customer becomes the actual judge, ‘rater’ of whether you are delivering quality, value and a good relationship to them.
  3. The customer is put in charge of CRM operations and enables a bi-directional and on-going dialog with the customer whereby they tell you their real needs, wants, concerns, preferences, experiences, etc.
  4. Companies that rely on this model are more likely to develop products, services, offers, communications that delight the customer and whereby they are more loyal, greater brand advocates, and likely to refer your company to their friends as a company who listens, cares and empowers their customers.

6)             Companies That ‘Get ‘CRRM

The following are samples of companies that, in my opinion, get the CRRM model and details how/why each of them get this new go-to-market customer model.

Companies That ‘Get’ CRRM – 1 of 2

Companies That Get CRRM – 2 of 2

Phrases That Describe Companies who ‘Get’ the New CRRM Model

  1. We don’t hide behind data and analytics to drive our customer & CRM operations, but rather we ask our customers what they want.
  2. We are eager to ask our most disgruntled customers how we can improve our relationship with them and to determine who to improve our go-to-market strategy
  3. Before we make any major market-facing decisions, we ask a cross-segment of our customers what they think about each of our proposed decisions and then ask them how to improve upon how these changes are implemented so we ensure a continued delighted customer base.

The bottom line of this post is that, if your company relies less on historical data and analytics to determine what customer want and actually builds methods, processes, and systems to put the customer in charge of rating CRM operations in order to provide you with ongoing and valuable real insights (needs, wants, likes dislikes, preferences, concerns, etc.), the customers will feel more valued and connected with your brands. The benefit of adopting this new CRRM model will be more loyal, empowered and delighted customers who will be brand advocates and brand referrers that will increase shareholder and company value.

As I have now built this new CRRM model for several major US brands, my next blog post will be on ‘how to’ develop this capability at the enterprise level.

The Recipe for Hyper-Innovation

A Success Story on how a company innovated to #1 – Market Leadership, Stock Value, Employee Engagement, Revenue Enhancement/Cost Reduction

Recent GE Logo History

INNOVATION DEFINED:

According to Kikipedia, the term innovation derives from the Latin word innovatus, which is the noun form of innovare “to renew or change,” stemming from in-“into” + novus-“new”. Although the term is broadly used, innovation generally refers to the creation of better or more effective products, processes, technologies, or ideas.

THE HISTORY & ROOTS OF INNOVATION:

At GE, an innovation program was developed during the late 1980’s called “Work-Out” as part of Jack Welch’s drive for better productivity, efficiency and greater innovation. Initially, GE’s Work-Out program was intended to identify and eliminate unneeded processes and tasks that were left over from previous years that became inefficient, as Jack put it, riding ourselves of meaningless tasks “Just because that’s the way we always did things”. After the restructuring identified via Work-Out, many GE groups accomplished their goals with fewer people and with reduced cycle time which drove ever higher levels of increased revenues, reduced costs and greater customer satisfaction & delivery.

THE INNOVATION PROCESS:

The aptly named GE Work-Out process involved identifying an area in need of improvement and assembling a cross-functional team of people together from all aspects of the business (design, marketing, production, sales, manufacturing, software, etc.) to identify a better process, method, strategy, etc. The task for GE Work-Out teams was to meet outside of its normal work environment (and occasionally outside normal working hours) to discuss business inefficiencies and to develop business improvement recommendations.

THE PATH TO INNOVATION:

As Work-Out unfolded, Jack Welch began to recognize that employees were an important source of new and creative ideas that would drive overall corporate innovation. Jack then drove to create a sustainable innovation environment that pushed towards a relentless, endless and companywide search for a “finding a better way, every day.” The Work-Out program was then evolved into a methodology that was created to reduce bureaucracy and to empower every employee, from managers to janitorial staff, an opportunity to improve and innovate on GE’s operations.

INNOVATION GOALS:

From a corporate perspective, the goal of the Work-Out program was to streamline GE and to make workers more productive and processes simpler and more straightforward. From an employee perspective, Work-Out was an empowering program that enabled everyone to contribute suggestions, innovative ideas and corporate efficiency perspectives to make their jobs easier/better and enabled them to deliver higher value to customers and to the company/stockholders.  Employees, in short, considered the program ‘liberating’ and a way to shape their own work-place destiny.

THE RECIPE AND INGREDIENTS FOR INNOVATION:

Due to my constant contributions that led to millions of dollars of savings at GE, I was actually asked to participate on Jack Welch’s Work-Out council at the GE Aerospace Division Level. From my perspective, GE’s Work-Out program was one of the most progressive innovation programs ever created (My perspective on having consulted with, and have insights on, nearly all of the Fortune 100 companies and over half of the Fortune 500 companies). The following is my perspective on the ingredients and recipe for a highly successful innovation program like GE’s Work-Out.

Ingredients for a Successful and Well Balanced Innovation Program:

From my perspective, creating a highly successful hyper-innovation program, similar to that of GE’s Work-Out program, depends on developing a balanced approach of delivering both value to company and sense of purpose & engagement to the employees.  The following charts highlight the balanced scorecard that should be the cornerstone of measuring the health of an innovation program. I call this the eight (8) over eight (8) Innovation Scorecard and, if the eight (8) over eight (8) measures are in balance, then ‘the company will be Great & the Employees will be driven to Innovate’. (The left of chart (Y-Axis) indicates my take on the relative imporance of each of the eight factors).

Employee Ingredients for a Successful and Well Balanced Innovation Program:

Employee Ingredients for a Successful Innovation Program

Let’s review each of these eight ingredients of employee Engagement to determine why they are so important:

 

  • Employees Feel that the Program is Fair & Consistent – Employees believe that the best innovation ideas are supported vs. those coming from the most popular, powerful or political employees. At GE, we felt very good that the best ideas were more important to management vs. the ideas of the most favored employees/managers.
  • Program participation is fun & exciting – Employees actually feel more content with their jobs and participating in the program is “cool”, “exciting”, “exhilarating”, etc. I never had more fun in a job than when I was participating and contributing to the GE Work-Out program. I actually looked forward to coming to work to find additional savings, ‘better ways’, etc. Additionally, water cooler chat at GE was many times about the excitement and activities of the Work-Out program and ‘what teams were up to’ in developing their ideas.
  • Employee cross-functional innovation teams are encouraged – Employees feel like they can cross organizational boundaries to get ideas developed and evolved without fear of negative inter-organizational political or ‘turf’ ramifications. At GE, when we named the cross-functional team members needed to formulate and evolve an idea, management helped ensure that this cross-functional team was on-board along with each of their managers.
  • Employee Recognition & Rewards are Available for Innovators – Employees are provided incentives & rewards for ‘stepping up’ and developing innovations and, as such, are treated with special/extra compensation for being innovation trailblazers.  At GE, there was an array of special recognitions available to top innovators including dinner with senior management, extra cash awards, mention in the company newsletter, potential level increases, etc. As a top innovator at GE, you could get thousand in additional compensation for innovations and going above and beyond the call of duty associated with your normal job responsibilities.
  • Employees ‘Can Own’ Their Innovations if Selected for Commercialization – Employees can see their ideas and innovations become reality and participate in all aspects of its commercialization process vs. ‘having the company move the idea forward without its originator.  The worst thing a company can do to an employee who ‘birthed the idea’ is to say ‘thank you, we’ll take it from here’ and not allow the employee to participate in helping their innovation evolve and become reality.
  • Program Participation is not Onerous or Cumbersome – Employees should not feel punished or overly burdened for ‘stepping up’ and are not made to feel like they will lose any work-life balance for being an innovator. At GE, extra time was set aside for Work-Out and ‘the innovation process’ vs. making it yet another job everyone had to take on in addition to their existing full-time job.
  • Employees Feel Empowered – Employees should feel like there are no obstacles for them to develop innovations and that they have the latitude equal that of the CEO to make things happen to ensure innovation team success. In this fashion, employees feel like ‘they own’ the program and can direct top management to support their initiatives. At GE, employees were ‘charged up’ and were challenging each other constantly to see which group, team, and/or sets of employees could find more efficiencies, greater cost take-out, or better ways of doing things. Once the employees felt like they ‘could change the world’, no manager would dare to stand in their way in fear of being ridiculed for being archaic, a ‘road block’ or worse – an impediment of the program. The “Coolest” managers were considered those who helped support the teams and were also contributing to finding greater efficiencies themselves.
  • Employees are Provided Encouragement & Support from Management – Employees must feel that innovation is a critical imperative at all levels of management and that top managers are involved, supportive and acting as innovation champions and roadblock removers for all impediments to program & team success. Top management must be totally immersed in, and aware of, the activities, successes, progress and top innovations-innovators associated with the program. At GE, we would receive frequent updates as to what Jack Welch was doing to support and ensure the Work-Out program was a success and clearly articulated that he expected all of his management to do likewise. In one video, he stated ‘I would not want to hear that any of my managers were an impediment to the Work-Out program and the employee innovation teams. We will quickly root out these types of people as they do not represent our future way of doing business.’

 

Company Ingredients for a Successful and Well Balanced Innovation Program:

In addition to the eight employee factors for a successful innovation program, there must also be well thought out components from a company-program perspective. The following chart depicts the company factors and their relative importance that must also be in place to make an innovation program successful.

Company Ingredients for a Successful Innovation Program

Now, let’s review each of the eight company innovation program factors in-depth to determine why they are so important to the overall success of a program:

 

  • Innovations are Managed in a Knowledge Base/System – In order to keep track of innovations, who originated the ideas, as well as the associated business cases for proving the commercial value of the innovation, a robust innovation knowledge base/system is needed. This helps to ensure that there are duplicate or overlapping innovations, allows the search for existing innovations that can be leveraged vs. re-inventing it for each division, region, etc. At GE, the process was manual and was very cumbersome.  Many duplicate innovations were created, and it was very difficult to leverage the innovation corporate-wide due to limited (paper based) visibility into innovations ‘in-progress’ or ‘being developed’.
  • A Social Innovation Platform (SIP) Manages the Innovation Process – As discussed in a previous blog entry of mine, many Social Innovation Platforms have been developed that fairly and consistently manage the innovation process. These systems did not exist at the time of the GE Work-Out program, but would have helped in managing the process and could have improved the perceived fairness of the programs administration.  Interestingly enough, GE now utilizes Social Innovation Platforms to manage its innovation process.
  • Management & staff are provided training on developing & nurturing ideas, concepts and innovation – Developing and managing the innovation process is not something that comes naturally for many companies. Therefore, in order for the program to be successful, the company and staff need to learn ‘how to’ manage the process most efficiently and effectively and how to tailor and evolve the program to specific and/or changing needs. At GE, this training was more ad-hoc and on the job, so there were many instances of re-work, false starts, and duplication of effort.  We eventually became good at the innovation process, but a good training program would have helped us avoid many missteps.
  • The Program has clear and consistent program metrics, processes and standards – In order for the program to be perceived fair and consistent by the employees, the program must be managed strategically and program governance (i.e. metrics/measured/processes/etc.) must be continually assessed and adapted for further improvement. At GE, this step was lacking and was only done on an ad-hoc basis and by each division vs. corporate-wide.
  • Innovations are Shared & Leveraged Company-Wide – In order to leverage the value of innovations that could be leveraged company-wide a corporate committee should review emerging innovations to determine the degree that this could be leveraged in order to determine the sum total of its applied business value (applied in one division only, one region, company-wide, etc.).  At GE, every division was on their own and there was seldom sharing of innovations between division (i.e. GE Aerospace and GE Aircraft Engines).
  • Rewards and Incentive Systems are Aligned to Support Hyper-Innovation – In order for an innovation program to be successful, the company alone cannot be the sole beneficiary. The company must share the wealth with the employees by sharing in a portion (1-20%) of the value of suggestion (cost take-out, revenue enhancement, quality improvement leading to additional contract captures, etc.). At GE, we developed a program called RAVE – Recognition Awards for Valued Employees that distributed large sums of incentive $$ for suggesting business innovations/improvements, etc. (Refer to the last section of this blog for examples of this rewards/incentive program).  Without these incentives, large numbers of employees would not have participated in the program and many would have sat on the sideline or would have become program detractors vs. advocates.
  • Innovations Are Value and Metrics Driven (Cost/Revenue/Quality, Employee Work-Life, etc.) – It is important that innovations be developed and ranked based on measures that will provide the greatest quantifiable impact to the company. A system of measurement must then be developed and applied such that every program participant is able to quantify the impact of each innovation and compare it to other innovations already in progress toward commercialization. At GE, this was rudimentary at best and caused a great deal of program inconsistencies where some questionable innovations headed toward implementation while other great ones were nixed early in the process. A consistent/metrics driven program would have avoided many of these pitfalls which led to employees questioning the fairness of the program.
  • Continuous Improvement & Change Management Support Evolving to a Culture of Innovation – In order for the program to thrive longer-term, a program (program oversight for the innovation program) of continuous improvement and change support must be developed and employed. The program must be continually measured, improved, and evolved to address employee and/or company concerns, address program inefficiencies, and to take advantage of new processes, technology or changes in regulation or market directions.  At GE, this was handled by a divisional level Work-Out Council which I was part of at the VP level. As a result of writing a letter to both Jack Welch (CEO) and John D. Rittenhouse (the Aerospace SVP) about continuous improvement, I was appointed to the Work-Out council at the VP Level under Al Horvath (Aerospace VP in Syracuse).  On this Work-Out council we handled the administration of the program along with reviewing all of the developing and/or developed innovations. We were also responsible for reporting up to Senior Management on our progress, issues, roadblocks, top program successes, metrics, etc.

 

An Innovation Program’s Impact on Shareholder Value:

In my opinion and in speaking to many at GE, the company has slipped since the GE Work-Out days in making the innovation program engaging and ‘fun’ for employees.  Insiders tell me the innovation program is more “black and white” now and driven most by metrics and six-sigma measures and the program “seems flat” and “uninspiring” vs. that of the Work-Out program under Jack Welch.

The following chart depicts how GE’s stock performed before, during and after the height of the Work-Out Program. It is interesting to see that when the GE Work-Out program started to change from its original format and lose some of its employee focus (vs. Six-Sigma statistical focus), the company’s stock value began to erode at about the same time. It seems from this chart and from insider accounts, that GE has lost its recipe for successful hyper-innovation.

Potential Influence of Innovation Programs on Stock Value

Case Studies of Success

The following are all real-life examples of Work-Out, Innovation and Incentive/Reward Program Successes.  These samples illustrate precisely how innovations occur within a company and what makes them successful.

A Successful GE Work-Out Example:

Below is one success case study from GE’s Work-Out that involved many of the above principles:

GE Work Out Success Story & Case Study

One of the many Work-Out Successes I identified while at GE is noted in the above graphic. For years, GE discarded their slight used, but still in good working condition, office furniture by paying to ship it to dumps & landfills.  One day, I passed a dumpster filled with office furniture in really good condition that I could use in my home office. I called the local facilities manager and asked if I could take any of it home and was told “No – we can’t have employees digging around in the dumpsters due to a liability issue. Someone could get hurt and we could get sued”.

Frustrated by this roadblock and always viewing every roadblock as a challenge and opportunity, I went back to my cubicle and said to myself “there has to be a better way – win/win for the company and employees”.  I called around to several salvage yards, 2nd hand stores, and several similar 3rd party companies, etc. and to my amazement; said they would love to take the shipment from GE and would pay cash to GE for the furniture and even allow the employees to buy the furniture at favorable rates vs. the general public.  Once I heard that a solution was possible, I called our facilities manager, Bill Biloski, and told him what I had discovered. He got excited about what I had found out and went off to contact the local firms I had contacted. Bill was able to work out a deal with one local Syracuse, NY firm named “The Riverside Shop” whereby GE would sell the used furniture to them, Riverside would then allow GE employees to buy the furniture at deep discounts – a win/win solution for all. Here is a synopsis of the benefits of the Worked-Out solution I developed:

Work Out Solution Benefits Summary

The following is my perspective on how the eight employee factors were prevalent in this work-out solution:

Employees Ingredients for a Work-Out Innovation Success

Other Innovation Program Examples:

Example – Innovations Submitted via Employee Suggestion Program

Above is my suggestion submitted for the “Better Together” program which Martin Marietta used following its acquisition of GE Aerospace. This program was far less dynamic and successful than the GE Work-Out program due to, in my opinion, a lessening of many of the “eight over eight” factors.

Example – Rewards & Incentives for Innovation, Special Achievement, Extra Efforts, Etc.

Above is my award for developing and delivering on a schedule acceleration plan for a major delivery to the US Navy. The Critical Design Review (“CDR”) was acclaimed as a “huge success” and was instrumental in GE retaining (vs. losing) the multi-million dollar Anti-Submarine Warfare (ASW) contract GE had with the US Navy.

Example – Innovation Program Complimented by Reward Program (RAVE)

Above illustrates my participation on the development of an employee rewards & incentive system to compliment GE’s Work-Out program.  I led this team to the development of what was called the “Recognition Awards for Valued Employees” or RAVE program.  Awards were distributed via this program to the most valuable contributors to the GE Work-Out program. 

Example – Award for Innovation & Excellence on GE Contract Delivery

Above is my award for making the Aegis Ship Software Qualification Tests (SQTs) a success for both GE and the US Navy.   The Tactical Load File (“TLF”) search tool mentioned above resolved some critical software anomalies that would have degraded ship safety and prevented the ship to safely fire its missiles.

Example – Reward for ‘Extra Effort’ and Going Above & Beyond

Above is my award for developing and delivering on a Prime Item Development Specification (“PIDS”) for a Nuclear submarine program to the US Navy. The PIDS was deemed “out of compliance” by the US Navy and I led a team to turn-around the quality of that deliverable into what was deemed as “exceptional” by the US Navy Top Brass. This was instrumental in GE retaining (vs. losing) the multi-million dollar submarine contract with the US Navy.

Recent GE Logo History

GE’s recent logo changes: Subtle changes vs. dramatic re-design & re-invention.  It is interesting to note that when GE was changing its logo from its 1986 to the 2003 design, John D. Rittenhouse, the then SVP of the Aerospace business, told Jack Welch: ‘Even you are having problems with this change thing – after all of the effort to re-design our logo, all you did was round off the corners a bit’.

Conclusion – The bottom line here is that getting innovation right is a tricky recipe to duplicate and all of the right ingredients must be present for the program to be considered 5-star.  If a company does not find the right mix to the recipe, a great deal of time and resources can be expended for a very questionable gain. It is clear that GE during Jack Welch’s tenure, GE perfected the ingredients and the results of the Master Chefs (employees and management) was a gourmet dish of higher profits, higher revenue and higher stock value. GE Work Out Clearly Worked!

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