GE and Fastworks: It’s Not About The Fridge
Corporate entrepreneurship is a significant buzzword, but not many organisations know what to do. GE has responded to this drive for speed and the need to align more closely with customers’ needs by using a new technique called “FastWorks.” It’s a framework for entrepreneurs, building on “The Lean Startup” by Eric Ries. The Lean Startup is an approach to developing new products that came out of “Agile” software development, with “sprints” (quick deliverables) and fast learning. It’s now being tried in manufacturing since GE and others believe that rapid learning cycles with customers will reduce the risk that you build something you can’t sell.
Brad Power from the HBR Blog network reports that there is a lot at stake for GE’s operations strategy. GE Appliances is on a journey to prove that it can bring manufacturing back to the U.S. and compete successfully. In 2008, GE corporate decided to invest $1 billion in the $5.6 billion manufacturer of kitchen, laundry, and home appliances, and transform everything — launching 11 new product platforms, building or revamping 6 plants, and hiring 3,000 new workers.
Historically, GE revised products every five years, and they would have kept their new products under wraps. But as Kevin Nolan, vice president of technology, said, “With FastWorks we’re learning that speed is our competitive advantage. How do we become much more open and collaborative with the customer base? You can’t do that if you want to be secretive.”
To make FastWorks work, changes have been made in several areas, including supplier relations, finance, and roles and responsibilities:
Finance. Vic Roos, Lead Purchasing Program Manager, explained, “We let a finance guy in the room. He helped us challenge the big company mentality. At times we moved much faster than the company would normally allow.
Leadership roles and responsibilities. Vic Roos explained, “You need to invert the pyramid. There were times when we were moving so fast that people outside our team were concerned. There was a group that was having trouble moving as fast as we wanted. The CEO came to a meeting, and that wall was knocked down. I always felt that we were not put out on an island, the organization worked around and supported us.”
The results GE Appliance has achieved so far are striking, says Brad: half the program cost, twice the program speed, and currently selling over two times the normal sales rate.
To me it's not whether or not GE can make a better fridge. It's whether the Fastworks framework becomes the new norm at how entrepreneurship within the corporation will take place.
Time will tell.
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