Page 115 - Managing Change in Organizations

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Chapter 6 ■ Theories of change: strategic management models
And, quoting Welch directly:
Changing the culture starts with an attitude. I hope you won’t think I’m being
melodramatic if I say that the institution ought to stretch itself, ought to reach
to the point where it almost becomes unglued.

Adopting the Schumpeterian notion of ‘creative destruction’, breakthrough
change demands new rules, quantum leaps and a radical approach to the balance
between control and autonomy – emphasizing relative autonomy within a ‘busi-
ness engine’ which demands performance.
The well-known overarching rule Welch adopted sets the tone. Be number 1 or
number 2 player in your sector or a business would not remain a part of GE. The
revenues and margins which flow from having either the number 1 or number 2
position in market share is sufficient for strategic choice. But the challenge that
this demand for market leadership poses is clear enough. The detail behind this
is interesting.
Behind the market leadership rule lay objectives:

1 Well above-average real returns on investments.
2 Distinct competitive advantage.
3 Leverage from strengths.

So analysis underpinned the strategy. But one example illustrates the ambition.
‘Work-out’ was a programme of employee involvement and continuous improve-
ment introduced in the late 1980s but the ambition lay in the scale of this activity.
Tichy and Sherman (1995) again:

By mid-1992, over 200,000 GEers – well over two-thirds of the workforce – had
experienced work-out. On any given day, perhaps 20,000 are participating in
a related program.
Instead of pursuing pragmatic goals the company focused on operations, process
and continuous improvement, customer satisfaction and partnerships. As these
authors put it, refocus from hardware to software; from seeing people and organi-
zational development as needing to move from developing awareness of new pos-

sibilities via the development of new skills toward the development of new ‘rules
of the game’, new ways of thinking about the business model. The interventions
become emergent (from within) rather than applied (to the organization (by out-
siders)). They become intensive, high risk and time consuming. They move from
working only on the cognitive level to working not simply on behaviour (a naïve
misunderstanding) but on new modes of discourse, new ways of thinking about
the business model. If a domestic appliances business can cut the cycle time
between receipt of order to delivery by 75 per cent, guaranteeing next day delivery
to the customer, then new ways of thinking are evident. But GE went on to build
on the success of ‘work-out’, developing a change management programme so
that all GE middle managers would become ‘change agents’. The one became a
platform for a fundamental development focused on accelerating change.
However, we still are not clear about how to assess the degree of ambition. Is
there not a risk of over-ambition? Clearly executives sometimes develop overly
ambitious market plans. Just as clearly we may seek to handle too much change in

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