Today, Katie and I talk about the recent AME annual conference that was held in Dallas. We both heard Larry Culp, CEO of General Electric (and GE Aviation) speak for 15 minutes, and we discuss that here today. We also recap highlights from (and our reflections about) the fireside chat that Katie had with Larry on stage.
Notes and Highlights:
- Listen to Katie on the internal GE podcast (named “Andon That Note”) she mentions in this episode
- Discussing the panel discussion that I moderated with Deondra Wardelle and Amy Gowder
- Gary Michel, another great CEO speaker at the event
- Larry: “This is how we manage” (Lean)
- Going to the Gemba? Why? Process and people
- Top-down and bottom-up – operationalizing Hoshin Kanri
- Learning from mistakes, how a leader reacts to bad news
- From telling to asking questions – breaking the telling habit
- Having a coach as CEO… why Larry thinks that's so important
- Larry: “You don't go to HBS to learn how to ask questions”
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Katie Anderson Discusses Larry Culp's AME Keynote And Their Fireside Chat
Welcome to episode 464. It's November 30, 2022. Joining us is Katie Anderson. I could be wrong but I believe this is her sixth time here on the show. We are talking about the AME Annual Conference that was held in Dallas. We both heard Larry Culp, the CEO of GE and GE Aviation. He talked for fifteen minutes and we'll share some highlights and thoughts about what he said on stage but then we'll also talk about highlights and reflections from the fireside chat that Katie had with Larry on stage. They are at AME. Larry Culp is formerly the CEO at Danaher. Danaher is probably considered by many to be the greatest American Lean success story.
As Larry talks about it, it's not just about Lean manufacturing. This is about leadership. Larry says, “This is how we manage.” He talked about how he doesn't know any other way to lead and that's what he's brought into General Electric in what's been several years as CEO. I hope you enjoy the conversation here. For those of you who attended AME virtually, hopefully, the video of Larry's talk and the fireside will be available online. They're still working on that. If you couldn't hear it directly, Katie and I are recapping what we heard, what we learned and what we thought. Here's the episode.
Welcome to the show. We're joined by our returning guest, Katie Anderson. Katie, how are you?
I'm great, Mark. It's always fun to be back here talking with you, especially since we've seen each other in person.
That was great. That's what we're talking about in this episode. We're going to share some reflections, stories and insights from the AME Annual Conference that was held in Dallas in late October 2022 and the Association for Manufacturing Excellence. It was great to see you and so many other people. A lot of our former guests were there. It was great to reconnect with them or meet them in person at the same time because of the pandemic Zoom land that we've been in. I'm sure it's the same for you.
You and I have known each other for over a decade at this point. It's great to meet some people who are new to my world in the last few years and whom I've gotten close to and connected with. It's a vibrant week of being in person with people. It was great.
It was the main thing that we were going to talk about, reflect on and share some ideas. I thought this was an amazing opportunity. The final keynote speaker was Larry Culp, the CEO of GE. He had been CEO previously at Danaher. Great Lean and business success story that was. Larry gave about fifteen minutes of remarks and then Katie had an opportunity to moderate Q&A with Larry. Tell us a little bit about how that was.
It was super exciting. This came to be that Larry had read my book over the summer and we can talk about how that emerged. I hadn't heard the story of how that had happened until we were on stage together. When I knew he was going to be the keynote speaker closing the event and two weeks before the event, they asked if I help moderate a fireside chat with him. He wanted to do a shorter keynote and then have some discussion. I said yes. It was exciting to have a chance to not only meet him but dive into a discussion with him about a leader who is truly leading the way with Lean thinking and practice at an executive level.
I was excited to hear him speak for the first time. Danaher is a very private company and in recent years, there have been a couple of articles. One from the Wall Street Journal did take a pretty good dive into what Larry is trying to do as he frames his words at Lean transformation at GE. I would say I've been a fan. It was good to hear more from him in person. He had a lot of great things to say.
In preparation for the discussion, I'd listened to two podcasts that he'd been on in the last few years and I was super excited after hearing him speak on these podcasts. I'm excited to dive into our reflections on the session as well.
As it turned out, Larry's session followed a different opportunity. I had to help moderate some things.
It was in nice setup of the day on that last day of the AME Conference. Mark was moderating a conversation with Deondra Wardelle and Amy Gowder, an exec at GE who has a special connection to Mark. Mark, how do you know Amy?
Amy and I had our 21st wedding anniversary in 2022. Amy Gowder goes by her maiden name professionally. We decided there was no need to disclose that on stage. It was going to be Amy and Deondra, who's been a guest on the show and become a dear friend of mine and ours. A third panel is Sarah Boisvert, who was a guest on the show before. She ended up not being able to make it because of some positive things happening with the nonprofit she's involved in. It became Amy and Deondra. It's funny they had formed the panel and then Amy approached me.
If anything, I got the gig. I don't know if it was because of Amy. She wasn't on the panel because of me in terms of that conflict of interest of the disclosure. There was that opportunity to ask them questions as leaders and hear what they had to say. The theme of the conference was about embracing disruption. We were talking about different dimensions of cultural disruption. It was fun to be able to explore that with them. I'm in the fog of trying to moderate and keep things going. I don't have notes to go off of. I need to go back and listen to the recording but you had some notes, thankfully, Katie.
I do. I was tweeting during the day with some great things that had come out of it. Some of the key themes that both Amy and Deondra were focusing on were our sense of humanity and being human beings as leaders and showing that we care. It's about both as a leader and Amy talking about being clear on where we need to go but then showing that you care and support people as well. Deondra made this great comment that people don't care how much you know until they know how much you care.People don't care how much you know until they know how much you care. Click To Tweet
I thought that was pretty powerful as well. I loved hearing Amy's perspective as a senior leader at GE and how that was connected to how she's showing up as a leader of going out to see, going to Gemba and making sure that she's checking on both processes and people. Also, connected with what Larry Culp said on stage about his perspective on leadership and how he wants his leadership team, which Amy is a part of, to be spreading and connecting these Lean leadership principles in service of achieving the business outcomes they need.
Amy has reported to Larry for six months. She's new to GE Aviation. It's becoming GE Aerospace. She originally got the invitation to be part of the panel when she was in a different role with a different company. As it worked out, we ended up with two GE executives. Amy ran a business unit and then Larry is the CEO of GE. He's also become GE Aerospace CEO as GE prepares to spin off the other two businesses. Larry is staying with Aerospace. You're right. You could hear in those comments that she's been influenced by him in that short time even.
It was great to hear two senior leaders talk about this because a lot of times, at these types of conferences, we have a lot of mid-level to senior mid-level leaders and continuous improvement leaders trying to lead the change. To hear from two top executives and companies talking about how they see this style of leadership as being the way to achieve what they need for their business was powerful. Before I went on stage with Larry, he made the same comment to me about how more senior executives in the C-Suite need to hear these messages and not keep delegating all of this down in the organization without taking it on for themselves as well. That message came through in the best in what he said when we were on stage together.
It's quite possible the next generation of Lean CEOs is being developed at GE under Larry. It's going to be interesting to see how that evolves. I was also going to give a shout-out to another CEO speaker the day before Gary Michel. We had a chance to talk. He's agreed to come on the show at some point because he was also sharing a very consistent message, not just about the financials and the business results but humanizing.
I don't think that Lean needs to be humanized but there's always that risk of it being dehumanized by focusing on process, numbers and data results. Gary started his keynote by showing a picture and telling a story about a frontline team member. Fewer CEOs don't do that. They want to talk about themselves. Neither Gary nor Larry was at all making it about them, which I also couldn't help noticing and admiring.
They set the level of humility and generosity that came forward. How they talked was incredible, the generosity of sharing the time, the energy, the reflections and sharing some of the challenges as well that they've had personally. It's the learning curve they've had to do something different in a different way. I reflect this concept of go show you care and be human is such a message that comes out in all my conversations with Toyota Leader Isao Yoshino in my book, Learning To Lead, Leading To Learn. The secret is about learning and learning is about caring about people and helping them also be part of the solution and the learning process.
Speaking of generosity, I'll bring it back to your book again, Learning To Lead, Leading To Learn. Larry was very generous in his praise for the book. He had heard or at least heard part of your appearance on an internal GE podcast. He said something like those were the two best sentences about Hoshin Kanri. What was the exact word he used?
I was looking through the transcript of the sessions. I hadn't had much time to reflect. This was a good prompt for me to do some reflection too. He said it was the two most coherent sentences on Hoshin Kanri that he'd ever heard. I need to go back to that podcast and try to find those coherent sentences that I said. This is an internal GE podcast, which is available on my website. I love the podcast name. If you're a Lean aficionado, it's called Andon That Note. Play on words. Andon being the chord you pull when you have a problem but also and on. I hadn't heard that story. What Larry started to tell me before we went up on stage was, “I'm going to save it and tell that story when we're on stage together.”
It turned out he had heard the podcast and then it was right before he went on summer vacation. He asked his team to get my book. He put it in his beach bag and read it on vacation. I got a bunch of pings from people working at GE saying, “Larry sent out an all-hands email saying he came back from vacation and read your book. He highly recommended it and the podcast that you had for all GE employees to understand what Lean is all about.” I was thrilled at that and then to be invited to have the conversation with him. When he put a big slide during his keynote with my book, Good To Great and a few other seminal leadership books was amazing.
I was pulling up the picture. Good to Great. The Machine That Changed the World, a book by basketball coach Dean Smith, The Carolina Way, Topgrading, which I'm not familiar with and then a book Principles by Ray Dalio. There's a stack of your books in the picture.
That was pretty amazing.
You should do a second edition of the book and get word from Larry.
At some point, that will be forthcoming. I only wanted to ask him one question about my book because it wasn't about me on the stage. I also appreciated him saying that this was my intention as a writer. It was a very accessible book to read and understand how Lean applies not just in manufacturing but across all different areas. It's a leadership journey. That was why I wanted to show Mr. Yoshino's journey of truly learning to lead and leading to learn. We all have to make changes for ourselves to become more effective leaders and a coach to create learning in our organizations. A Lean transformation is truly about an individual transformation or growth and collectively, how we pull that together. The culmination is the culture.
We can dive more into that. Larry said these exact words that at GE, Lean is not just manufacturing. The first thing we're going to dive into a little bit here was his comment thinking first back to Danaher and under his leadership at GE. He used the phrase, “This is how we manage.” That's a different way of articulating this than talking about, “We're doing all these tools and these many events.” He's emphasizing culture and the way leaders are leading. I'm curious to hear what some of your takeaways were on that.
He talked about the power of a Kaizen event and he talked about different tools but it's not about the tools. It's about how we're using the tools so leadership, behavior, mindset and actions. He also said, “You need leaders to walk the walk.” These are some quotes from him. The senior team has to be bought into this. This is not something you can delegate. That's something he specifically said. This is leaders at all levels. It's not that the executive can't delegate it. The executive cannot delegate it if it's going to be successful. We all have to be applying this. It's one of the first things he said and this is critical.
It gets back to your show in which we are both holding up some tea mugs for My Favorite Mistake with this concept of bad news and bad news first. Making it acceptable to have problems and bad news as a key management mindset and then how you respond to that as the action. He said, “Bad news in most organizations typically does not travel fast.” Later, he went on to say, “In his experience, when it doesn't travel, it can be fatal.” If we have this culture where we don't even look at problems, then we aren't going to be able to solve the problems. One of the biggest leadership shifts has to be welcoming and embracing bad news first.
I liked how he emphasized the moments of truth, as you put it. How do leaders deal with bad news? He said, “I want to hear bad news and hear it fast.” He talked about moments of truth of having to prove himself to people at GE by saying, “The past people had been shooting the messenger.” Larry had to prove to them that he could react constructively to “bad news.” You could use the phrase psychological safety to make it safe for people to report the truth. The bad news is to react in a way that's constructive, asking questions and seeking to understand instead of yelling and screaming or blaming.
This goes back to the same story Mr. Yoshino shared the first time we were guests on your show, My Favorite Mistake, about the famous paint mistake he made when 100 cars at Toyota had to be repainted. Not only did they not yell at or blame him but they looked at the process and then collectively looked at how they could make a better improvement for the future and thanked him. It was because that bad news was an opportunity to see improvement. All of us, at the human level, hold ourselves back. I think of myself as a parent sometimes too. We hold ourselves back from looking at the process and how we make improvements on that. That fosters learning, improvement and innovation.
I want to come back a little bit more about how they manage and another thing I had in my notes. Thank you for asking him that question about learning from mistakes. Larry said, “You need to acknowledge mistakes, own the mistakes and then get better.” That's the spirit of the My Favorite Mistake Podcast and the book I'm writing around all that. Thank you for the Daruma. I'm using one of Katie's Daruma with the one I filled in because the book is still very much a work in progress.
I appreciate that you asked him about that. Not only hearing them say it emphasized, “You can't talk the talk. You've got to follow through with the right actions and demonstrate to the people that, ‘I'm not going to shoot you for bringing me bad news.'” That flows downhill in a very positive way, where the opposite gets dysfunctional quickly. We've heard stories from all sorts of corporations like Ford Motor Company when Alan Mulally came. The famous story is about, “How can the status of everything be green when we're in the red losing money because people were afraid to report the truth?” He then had to change that culture there at Ford.
It's where Larry started the conversation. Psychological safety is how we talk about it but that is fundamental to being able to be successful and to move beyond the tools. However, this is the way that we manage, grow, improve and achieve the important business goals that each organization needs to do to survive and thrive.
Larry had learned this way of leading. He was relaying on paraphrasing and a story of when he came into GE, somebody had asked, “Are you going to lead the Danaher Business System way?” He is not going to call it Danaher Business System at GE but he said something to the effect of, “I don't know any other way.” I thought that was an interesting reflection and comparison. He talked about that fully committed senior team.
Larry became CEO at Danaher in 2001, which was the same year Jack Welch retired. Larry's path had not crossed with GE yet but Larry had time to build that culture. I'm sure by the time he left, the senior executives had all come up through that culture. He's coming in to lead GE where executives have not come up through that culture. I'm sure that creates new leadership challenges to recognize that situation.
He did have to change the way he was showing up as a leader. He even made that comment. One of my first questions was asking about what personal leadership changes he needed to make. He made the comment, “I didn't go to Harvard Business School to learn to ask questions. You learn to be intuitive about giving the answer.” He had to unlearn that instinct of wanting to come in and being the problem solver, the expert with the answer, ask better questions and listen more thoroughly and effectively as well.
He realized that that was the huge leadership shift that he had to make. He's quite effective at that. I can imagine that there was a growth curve. He even mentioned that it felt awkward in the beginning. He realizes that because he's gone through that himself. It feels awkward for the leaders who report to him or are working for him to move from this leader who has all the answers and is supposed to be the expert to, “I'm the leader who is asking more questions and setting the challenge but helping enable people.”
Larry did comment on that, saying GE leaders had generally grown up through the organization expecting to get answers from their leaders, not questions. Larry went back to his first P&L role within Danaher, which he had at a pretty young age. He said something that is a pretty direct quote. It was humility for survival because he didn't know the answers. As he put it, he barked out commands and had to go on this discovery journey. It was interesting to hear that reflection.
If he were here, it would be great to ask him about the shift in his leadership style of leaving Danaher, where he feels the culture is a place where the culture is something to build. I'm sure he's had to adjust his approach. It'd be interesting to think about how you would change your approach if you were making that shift.
I imagine he's doing this. He's sharing the why and the purpose behind his actions. I always suggest to leaders who are starting to make this shift and it's different in their organizations when they're doing what I call to break the telling habit. We're making that shift from being the expert with all the answers to more of a leader as a coach. Tell people what you're doing and why. Label it.
Say, “I'm asking more questions because I don't know the answer. I don't have the context for this. I want to hear how you're thinking about this.” Explaining the why can be so helpful for people. He's been so transparent, even on stage with us, that I imagine that he is saying those things to people, explaining that context. It helps people understand why and stop. Making assumptions about why he has malintent. No. He wants to be helpful.
This goes back to an acronym I learned in the auto industry many years ago and sticks with me. It translates well into other settings. SQDC, Safety, Quality, Delivery, Cost. That order is very intentional in emphasizing safety and respect for the employees. I loved when Larry was telling a story about Shingijutsu sensei. They're doing Kaizen events within GE and he told a story about the sensei leading a round of applause for the frontline workers. It's a sincere showing of appreciation sort of way. Larry shares how that influences a positive one of seeing how much the Shingijutsu people deeply respect the frontline workers.
They're the people who create the value. Leaders are there in service of helping them do the work and do it better and safer. That connects to the concept we were talking about why you go to Gemba as a leader. Gemba is the word in Japanese for the place the work happens. I asked Larry, when he goes to see the frontline or one of his organizations, what he is looking for and what's his purpose.
He said, “Two things. I'm going to see the status of the state of the Lean transformations, the process, the state of leadership and how people are doing with these core principles. How are they doing it? You're going at two levels to check on the process and people.” Often, we focus on that process side. We have to bring the people's side into that as well. It goes back to what we talked about at the beginning and what Amy and Deondra were talking about. It's the sense of humanity and caring as leaders. It's not just the outcome and the process. It's the people.
We can find a lot of different ways, maybe two sides of the same coin. We care about results but we're looking at the process because that drives better results. Larry talked about daily management. He made some comment, “People realize they need to look at hourly management to better win the day.” These dynamics are both top-down and bottom-up. For all of the talk about Kaizen events, he also talked about daily management, engaging people and improvement. Part of that top down, bottom up then comes back to Hoshin Kanri for strategy deployment. He talked about operationalizing Hoshin Kanri. What were some of your notes or reflections about the way he talked about that?
He talked a lot about Hoshin, Hoshin's strategy deployment and how important it is. I had talked to him a little before we had the conversation on stage and one of the challenges and what was appealing to him about the concept of Hoshin was how to break down silos and the cross-functional management of a large complex organization. You're going to have so many different functions but you have different products, services and delivery. On stage, when we talked about this, he said, “Hoshin Kanri is also a way when you operationalize it.”
By operationalizing it, my sense is from how we talked about it. It's like, “How do you put it into practice?” It's not just this concept. He says, “They use the X matrix as a tool at GE. How does that not become something that's slapped up on the wall but how do you use it to break down silos through conversation, shared alignment on priorities and so much more. It's about the conversations. It's not just going through the motions but how do we stay in alignment and talk across the system?
That also came through in a couple of different ways. One, back to this word operationalize. He also used the phrase that Hoshin Kanri helps you operationalize your ambition. That's one thing that has goals or ambitions. Instead of demanding breakthrough improvements to randomly pop up, you can be systematic through an X matrix or other methods of figuring out what we need to accomplish. What gaps are we choosing to focus on? What initiatives are we connecting with?
X makes my head spin as you're turning your head. It's probably better to turn the paper than to turn your head. Operationalizing is not just deploying goals but having those conversations and cycles. This is a powerful message where it's not just about having the goal and executing the plan but it's about these cycles of discussion, catch ball or whatever you might call it. Sometimes, we overestimate what we could accomplish and sometimes, we underestimate and adjust. It's not a huge mistake. It's an opportunity to adjust.
One of my favorite phrases from Mr. Yoshino is, “You have to have seemingly impossible targets.” That's the challenge. We talk about this in the healthcare space. The challenge should be zero errors, zero defects. We may not know how to get there. It's seemingly impossible but we need to move towards that. Pushing can help if you're doing it right. If we're failing along the way or having some successes, then we can learn to accelerate or ad throughout there.You have to have seemingly impossible targets. Click To Tweet
When we talked about enjoying Hoshin Kanri in my book, it talked about those fundamentals of how Toyota learned that it was about leaders' behaviors in doing Hoshin, having discussions across different functions, understanding the top priority and how they were going to help their teams achieve it. My sense is, from all that Larry is talking about, he's trying to create it at GE as well.
When he was talking about all of that, he made me think of a CEO of a previous generation, Paul O'Neill when he was CEO at Alcoa. He set what some might call the Big Hairy Audacious Goal of zero harm, that nobody who comes to work at Alcoa should ever be hurt at work. It evolved to, “You should go home healthier than you arrived.” There's that goal but it's not a slogan or cheerleading. You've got to do the work and lead the effort to help people become better problem solvers to make significant progress. It seems like that same thing exists there. I'm sure Mr. Yoshino would agree if he were on the line with this. It's not about the goal but then what do you do to work toward it? What other detail would you fill in about that?
How do you have a structure to check and adjust? You can't set something on the annual cycle or check on the process but how are you having those routine discussions, conversations and reflections? As we know, learning happens in reflection and adjustment as well. This goes back to what we talked about, bad news first. It's okay if we're off track in achieving our goal so what are we going to do about that?
One quick point on that. You're talking about not doing the road check of like, “Did you implement this or not?” I forget if Flair was talking about back at Danaher or GE but in my notes, somebody says, “We've done seventeen Kaizen events.” He said something to the effect of, “Which one of those had an impact?” It's not just about doing things. What are we achieving compared to our prediction and then how do we adjust if we're not getting the impact that we wanted?
I made this comment at the end of the discussion with Larry. You don't do Lean just to do Lean. It's in service of achieving important business outcomes or if you're showing up this way as whatever, you achieve some important challenges and then how are you going to get there? It's connected to both the outcome that you need and the process by which you're going to get there. That includes the learning process. You have to build that learning process for sure.
We're looking at the results. I'm picking from the notes here of how Larry emphasized the workforce, culture and the connection of these shop floor Kaizen events. One element of culture he touched on that I thought was interesting is he said, “It's telling how executives react to the invitation to come to a shop floor event.” I'm sure he's evaluating and thinking, “They don't seem very interested in this. They're making excuses of why they can't do it.” He said, “Culturally, why send an executive to a weeklong Kaizen event?”
In his opinion, he said, “It's the best way to internalize these Lean principles. Not just hearing about them but doing things.” He talked about the culture impact on the workforce. One of the union representatives used the word raving. They were raving about the effect on culture in a positive way. In my GM days, if you use the word raving, they were raving mad about something. I'm not blaming the union for being mad. GM management did a lot of stupid things back then but the positive effect on the culture in addition to business results is back to two sides of the same coin again.
I think about my early learnings as a Lean practitioner back when I was working in hospitals and healthcare systems exclusively as an internal Lean consultant. The power of a weeklong Kaizen event is magical. To go through that experience, not just by being the leader that's coming in and hearing the report out but by going through that journey is so transformative. The energy it creates is so powerful. It was exciting to hear Larry talk about how he believes in that as an important part of a leader's learning journey of not just achieving the business outcomes but about their understanding of what this is like.
He even said, “You don't know what a Wednesday night Kaizen event is like until you've gone through it.” You're like, “I don't know how we're going to do this. It's not possible.” You get to Friday and it's amazing. That's what sparked my absolute passion for this type of approach to leadership and the continuous improvement of operational excellence because it is magical. I was looking through my notes when we were talking here. Something that stands out to me is his comment that you have to go slow to go fast.
I reflect on how this pervasive impatience that most leaders and organizations have and they want it to happen now. It's hard because we do need business outcomes now but the time it takes to make changes, in behavior and culture does take a long time. You have to go slow to go fast. That's a real challenge for a lot of places. Why do Lean efforts fail because they didn't achieve the results that they wanted within six months? That doesn't work.We do need business outcomes now, but it takes a long time to make changes in behavior and culture. You have to go slow to go fast. Click To Tweet
That's the first time I've ever heard that phrase from a non-Toyota person. I guess I've heard it from people who've been influenced by Toyota. You see that lineage of Toyota and the Shingijutsu to Larry, this phrase, “Go slow to go fast.” I think of a change management course I went through. This comes back to John Carter in his change model. It's like, “You can force a lot of change quickly but it might be a fake improvement.” How often do people say, “We haven't sustained our change or improvement? I don't know if it was ever deeply implemented.”
“We didn't have the management capabilities to sustain and continuously improve.” I always think back to the story of Toyota's leadership development program called KanPro that I talk about in Learning To Lead, Leading To Learn. Mr. Yoshino was part of the internal group creating this leadership development program. His boss said, “We can't have just one year. One year is too short because it's too easy to fake it. 3 years is too long because it gets a little exhausting but 2 years is enough time where you have to be trying and changing. It'll probably sustain at that point.” Most of them were like, “3 or 6 months are fine. You should be self-sufficient.”
You asked Larry and he made a comment about being a CEO for years. I'm trying to remember if this was in a side conversation or on stage but he said it in a public forum. If he has been CEO for years, how long has this culture change taken? I recall him on stage saying something about, “COVID slowed us down a little bit. We were dealing with all of that.” I remember him saying, “2023 should be the year where it starts to take root and click.”
It'll be different levels across the system because that's the nature of it. This is connected to making behavior change stick but he talked about the power and importance of having a coach. Even if he is the CEO of this huge company, he has a coach. Not just an executive coach but a Lean coach who has been with him for a long time and who helps him continue to practice, learn and be more effective in leading this way. I appreciated him talking about how he has a coach. We all need coaches because we have our blind spots. He said it's a great outside perspective for him when they're not making enough progress. It's what he needs to do as a leader to help enable that or if he's not listening as effectively or seeing sides of things that he needs to do. We all have these opportunities. It was great to hear about that.
It does set a good example. He talked about that outside perspective or the trusted sensei advisor. You need some people who can tell you when you've screwed up. If you're in a culture where bad news isn't flowing up the chain and you haven't yet created a culture, the idea would be a culture of psychological safety where people aren't afraid to challenge the boss.
If you're still building that in different ways, it's having that outside perspective to keep you grounded and humble. He talked about that a lot, leading with humility. This is my supposition here. Can you imagine those words? I don't want to get sidetracked on the difference. I can't imagine Jack Welch ever saying that phrase out loud unless he was mocking it, maybe. That was not his style leading with humility.
It's so interesting that two different CEOs of the same company have different leadership approaches and perspectives. It'll be interesting to see how Larry leading with Lean as his leadership style is going to be able to make GE survive, thrive and achieve all of the big goals it needs in the future and what we've learned from the differences between those different leadership approaches.
He is the first outsider ever hired as CEO, which puts you in a unique position to help change the culture without being an inadvertent defender of the culture that you created. There are certain things only an outsider can help shake up an organization.
Also, to see things that become invisible when you have been habituated to them as the norm. That's one of a leader's roles. How do you make the invisible visible? He has an opportunity to help others see the impact of leadership styles or what's been happening in the past. He also talked in his talk and other podcasts I listened to about how there are so many amazing people at GE. That's why he's so excited to be there.One of a leader's roles is to see things that become invisible when you have been habituated to them as the norm. Click To Tweet
It's helping them see a different system and structure to help enable their success in realizing the impact and the potential that the company and the people have. There is a lot of greatness there. It's how you cultivate that, create the systems and structures that allow it to survive and thrive and allow people to contribute their ideas and thinking. He mentioned it on a different podcast. He was like, “Out of the woodwork came all of these great Lean thinkers and practitioners who are like, ‘I'm here.'” He's like, “Let's use you.”
One other thing I had in the notes here about culture was interesting. I had a chance to interview the CEO of the hospital for special surgery in New York, Louis Shapiro. He was very interesting. He would point to culture, especially hospitals. He brought up the phrase that a lot of people like to say, “Culture eats strategy for lunch. I don't believe that. Culture is strategy.” Larry touched on that a little bit differently. There was a story that had a surprise ending. He talked about back in the Danaher days because Danaher bought a lot of companies and applied the Danaher Business System model to them.
He said there was one organization they were looking to buy and somebody there made a comment. This is the quote. “We no longer talk about bad news here because it's deemed bad for morale.” I'm looking at it from a different lens of like, “Run away. I wouldn't want to work there.” His lens was, “That's a company that we can turn around. If you have good technology and other strengths, you can change a culture. It's easier said than done but you can do it.” Especially in the Danaher days, if the leaders couldn't come around, Danaher could bring in talent from other businesses to turn it around.
If they haven't been making the problems visible or once we start making them, we have an opportunity to change and make everything even better. I can see how it's like, “We can do something with this.” It's true. You can change a culture. The new me experience the joint venture between Toyota and GM. It is such an incredible example as well if leaders change their behavior to bad news and challenges and provide that support.
Going back to the Andon, when the Andon court is pulled, showing that the frontline worker has a problem, the leader or the manager is coming to provide help. That makes a big difference. That was a huge, powerful shift. The new me results are so well known. It's the same thing with GE. That's where Larry sounded very excited because of the people, the process and the potential at GE. I'm excited to see what he's going to do. I gave him a Daruma. It's slightly bigger than the one I've given you.
I was in an event where you had a lot of small Darumas that you gave away. I take no offense. It's all right.
I gave Larry one the size a little bit. It's smaller than some of my biggest ones because he has some big business goals. Hopefully, Daruma will be able to help him. Remember that it's okay to have setbacks and challenges. If you fall 7 times, get up 8 but keep going forward to achieve the goal. I'm excited to see not only the outcomes of this organization but also the process and the learnings that happen. With all the transparency they've had about their journey, I imagine we'll have opportunities to learn from and with them as well.
Before we wrap up here, was there anything else in the notes that you think was noteworthy? Here's one note that I had back to the idea of having a coach. Larry said that his son is such a great example for other leaders. I thought this was key. This shows the humility and Larry said, “It helps him see how far he still has to go,” which is a powerful thing to be willing to say in front of others.
Building on that, I asked him because we were talking about the concept of how he was talking with the leaders who report to him, which may feel awkward. I said, “How do you handle feeling awkward?” He made a joke of, “I don't feel awkward anymore.” He's willing to show that he does. It's always a learning journey. This is why you have a coach to help continue to challenge you to become an even better you and provide that support. That's where that learning zone is. That's why we all need leaders as coaches in our world, shifting that as well. For me, it was going back to Larry Culp reinforcing the essence of what makes Lean successful.
It's about having clarity on the challenge or where you need to go in that direction. I talk about how you, as a leader, provide the support to enable your people to learn their way forward. How do you develop yourself as a leader too? To have that humility to know it's okay not to have the answers, you always need to make some changes too. I remembered one thing. I was taking a note while you were talking and you mentioned the Danaher Business System. It's interesting that they shifted. They originally called it the Danaher Production System.
It was focused on manufacturing and the processes but they changed it to focus on this is the way we manage and lead. That's what Larry is focusing on here. I work with some clients who are trying to create their production system but we're also talking about, “That's great for looking at how you're improving processes but then what's your leadership system along with that to enable it?” You can do all you want with a production system but if you don't have the management and leadership capabilities and system to support that, you'll end up going back to tools and projects.
When it comes to business and production improvement, Larry emphasized, “What you won't read about in the media is what's happening daily in the factories. This is not just about talking differently.” Another quote I wrote down or paraphrased was, “We need leaders who don't just mouth the words and hire consultants. It's about working differently, not just talking differently.” He said, “We want to aim for better results.” He used the phrase true Lean culture and then he asked, “How do you change the culture? You change the way you work.” It's two sides of the same coin. I think back to models TQM days of learning do. These are very intertwined, talking differently, acting differently, working differently and leading differently.
We focus so much on, “We need to create this culture.” Culture is the accumulation of the acceptable and standard norms of behavior in action. It's not that we can't change our mindset. If we change our actions first, then it helps shift the mindset. It's always actions. Not only talking about it but walking about it. Larry is a leader who's doing that. It's super exciting. It was such a thrill to be able to not only meet him in person but have that chance to be on stage and talk one-on-one with him. He's leading and I'm thrilled to hear what he had to say about Learning To Lead, Leading To Learn.If we change our actions first, then it helps shift the mindset. It's always actions. Not only talking about it but walking about it. Click To Tweet
I was happy for you and for others who are going to be exposed to the book. Here's the final thing I was going to share from the notes here. There were so many great nuggets and a lot of great things being said. Going back to our discussion about going to the Gemba and seeing what's happening, he realizes, “Going to the Gemba might be an unrepresented sample but it's all I've got. An incomplete picture is better than a PowerPoint deck.” I want to get that.
Going to see something is better than staying in your conference room and relying on synthesized secondhand information. You can't make all your decisions on that but it gives you a pulse of where things are.
The final thing I'll add here. We go back to the idea of doing the work, being lean and leading lean, not just implementing Lean. He emphasized the difference between implementing Lean versus being Lean. He asked a question, “How many companies want the Danaher stock price multiple without putting in the work?” That was interesting. I don't know the answer to that but there are some and that's a sour note to end on. The positive side of it is you can't just talk about this to your workers and Wall Street. You got to do the work. It seems like they're doing the work.
This goes back to go slow to go fast. Know that you have to change as well and lead the way. That's going to feel awkward at times. Have a coach who helps you. Know that it can't be delegated. It was very clear that it had to be led from the top. Even if your company isn't there yet, you're growing into those senior leadership roles and you'll have opportunities. How do you cultivate this type of leadership within your sphere of influence and this current role or company but then it's going to change and there's going to be more a-has along the way? We have to keep going and keep our eye on it. As Amy said, “The true North and keep learning our way forward.”
That's a good note to end it on there.
It's a cycle. You have to lead to learn, learn to lead, all of the same and keep going around in the chain of learning. I talked about it in the same way that Larry had to start making a shift by asking more questions. My favorite mistake from back then was learning how to do the same. Thank you, Mark. It was so wonderful to hang out for four days in person, finally meet Amy as well and spend some time together. I look forward to more time together in the coming year and more conversations and reflections like this here together.
I'm glad we could hang out for about an hour-ish here, hearing our retelling of all the great stuff that was shared. Hopefully, it provides some value. If people don't get a chance to read this, I hope people do get a chance to hear some of this directly from Larry and other venues in the future.
One of the challenges we often find is having time to reflect. Sometimes, the best way to reflect is to have a deadline and a reflection buddy. Mark, thank you for being my reflection buddy and for having this on the calendar because this gave me the space and time. I created the space and time to reflect on it. I enjoyed the discussion as well.
That's the way to put it, creating the space and a little bit into how the sausage is made.
It was great. I'm sure there'll be more reflections and nuggets to have from the AME Dallas event and also this discussion with Larry Culp and more. I look forward to hearing what people think and reflect on after learning this discussion with you and me.
If people want to connect with Katie, the website is KBJAnderson.com.
Katie, thanks again.
Thanks again to Katie for being our guest yet again here. I always enjoy it and I'm sure she'll be back.
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