He has also been “all-in on Lean” for a long time going back to his years as CEO of Danaher (and in previous roles there).
Note how the emphasis is SQDC and not cost-cutting.
Aviation Week: “Where are you in GE's Lean manufacturing overhaul, and is it actually saving you money?”
Culp: “It's early innings, but I'm really encouraged. Our mantra is safety, quality, delivery–before cost–but I believe that we are saving money. I see the waste that's coming out of the system.
I think the primary benefit we're getting today is delivery. It's a daily battle within our own four walls and with our suppliers and their suppliers to ramp up, given everything that many industries are dealing with post-pandemic. I don't think we would be shipping as many Leap engines if we were not executing this Lean transformation.
In time, it's going to help us with productivity as well, but that's not the primary orientation today.”
I've watched the last two publicly available “GE Investor Day” events and Larry has a very consistent message. He really puts the S (Safety) in SQDC.
March 2023 Investor Day
Before Larry even came out to speak as CEO, the host of the meeting started with… a SAFETY briefing. I love it.
“We are going to start with a safety briefing like every meeting at GE,” the person said. At their site in Evendale, Ohio, they talked through the possibility of bad weather or tornadoes. They reminded investment analysts to review safety tips about their planned “gemba” visit (and they used that word to describe the factory workplace).
“If you feel unsafe at any time, call the number on your badge,” they were told.
The host talked about SQDC and how injuries were down 18.8% year over year compared to 2022.
How? By “implementing standard work, safety training” and the “quick identification and correction of stop work issues.”
Then Larry started his remarks with safety. “We really start every meeting…are focused on safety, so we do the same thing here.”
Larry talked about leader behaviors and “walking the talk on a daily basis”:
He said they are “driving the culture they want to see.” He mentioned Lean and how “Kaizen” means “a little better every day,” capturing the “compounded basis” of small incremental improvements.
They're emphasizing “the customers and those closest to the action to serve the customers.”
Larry also mentioned quality and a reduction in “defects per engine” performance.
He also emphasized that Lean is “not just pushing people hard, but helping them.”
Other GE business leaders talked about Lean concepts including:
- A “3P” (Production Preparation Process) event
One leader said, “Always start with Lean first… we want great processes first.”
Another leader explained they are “Using our Lean operating system to deliver on that growth and improve our operations,” which included reducing defects by 90%, and partnering with suppliers on Lean tools to improve flow.
From the audience, Cliff Ransom asked a question. He's probably the most knowledgable Wall Street analyst who really understands Lean and advocates for it.
He asked a question the other analysts might not have even understood… not just about Lean but how their progress was going with “Hoshin Kanri.”
Executives said it's the “early stages” but they are “making progress” with “HK.” One leader said, “It's the first time in his career that people are asking about what we're NOT going to do.”
As a quick aside, I've seen how healthcare organizations get bogged down with too many (meaning hundreds) of “top priority” initiatives. The discipline of HK has leaders not just put projects into “yes” and “no” buckets but also into a “yes, but not now” category. That comes back to Larry's point about “focus.” I've found it's better to get some things done and then move on to other big initiatives.
Another leader said there's been “a lot of progress in daily management with the front lines and weekly reviews” and that HK has led to “a lot of alignment,S” but they are now working on “breakthrough” initiatives.
One other leader said that HK is something he's “practicing personally” and it's “rallying the entire organization around our top objectives.”
June 2023 Meeting
How did their investor briefing at the Paris Air Show begin? Of course… with a safety moment!
They showed a video about some ergonomic improvement work that was driven by Lean principles at one of their factories — creating lift assists for workers who were picking up relatively large and heavy parts. They mentioned “protecting our most important assets… our people.”
They again emphasized “this is how we start all meetings” and that safety is “number one.” Larry later added these safety moments provide reminders about “why safety is so important” and that the lessons help spread knowledge.
He mentioned their progress with Lean, saying, “SQDC are the priorities. Lean is a wonderful way to transform the culture” and they are “starting to see green shoots all over the company.”
Something to Emulate
What would you want to emulate from this modern-day Lean GE example? This is all very applicable to healthcare.
If you think employees aren't excited about Lean, ask yourself if it's because you're focused exclusively on Cost and not on SQDC with a true “safety first” approach?”
It seems that few leaders do this. It can be a real competitive advantage for GE — and other organizations. Larry and his focus reminds me a bit of the late Paul O'Neill and the approach he took at Alcoa (and shared with healthcare leaders).
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