Prof. Steve Phelan
Lecture 20

• Continuous change at GE
 Cracking the code of change (2000)
 Unlocking the mystery of large scale change
 GE issues
• LMZ Chs 43-44
 Seven practices of successful organizations
(1998)
 The new agenda for OD (1997)

• Two change styles (Theory E and O)
 Theory E is shareholder value driven, top down, focused on structure and systems, relies on financial incentives
 Theory O is commitment driven, bottom up, focused on culture and employee skills
 Authors argue that management needs to do both by explicitly embracing the paradox

• New think
 Shared ownership of vision – open dialog
 Public information – we all work from the same picture
 Volunteer mindset (‘what can I do?’)
 Respect for whole individual
• head, heart, hands, spirit – equally human
 Wisdom
• We have the knowledge and skills we need or know how to get them
 System
• I understand how we fit together
 Process
• We continually learn and change together

• Challenges of copying GE strategy/culture
 What were the hardest things to copy?
 Why?
 What should be done?
• Workout
 Is violating “no meeting Wed” a big deal?
• Internet strategy
 How did it roll-out so fast?

• The seven practices are:
 Employment security
 Selective hiring
 Self managed teams
 High compensation contingent on performance
 Training
 Reduction of status differences
 Sharing information
• Best way of unlocking Vaill’s latent energy?

• Loss of community
 People pretend to care more about one another than they really do
• Loss of employer-employee social contract
 I must take care of myself
• Employability
 Is my employer giving me the skills to find another job if I have to?
• Trust
 Widening gap between have and have nots
 Difference between what managers say and do
 Lack of openness
• Culture Clash
 Need for negotiation and conflict resolution skills

• Interesting list of change strategies
 Importance of vision/superordinate goal
 People need to understand the why behind the vision
 Importance of employee communication
 Relationships beyond the workplace
 A few off-site meetings together early
 Proximity was key
 Getting on with it/rapid decision making
 Walk the talk
 Don’t forget the customer
• Very similar to our merger simulation

• List of emerging discontinuities
 Globalization
 Deregulation/privatization
 Volatility (need for flexibility)
 Convergence of technologies
 Indeterminate industry boundaries
 Standards
 Disintermediation
 Eco-sensitivity
• What about terrorism, oil? Not even anticipated