How the Lean Startup is transforming GE

The Lean Startup started as a smarter way for startups to build product. Today, the Lean Startup ideas transform how people think, work and operate together inside organizations. The perfect example of such transformation is happening at GE (General Electric).

Janice Semper who is leading an effort to drive a cultural transformation to make GE a simpler, faster and more customer-centric organization shared that story on stage at the Lean Startup Conference in San Francisco last November.

GE recognized that in a rapidly changing world, the companies that thrive have the ability to learn, react and adapt faster. In a quest to achieve this, GE tried to re-organise by removing some of the middle management functions. But this had no impact on their ability to react faster.

From a one-week experiment to FastWorks

Interested in the Lean Startup concept, they asked Eric Ries to come in for a week and work with a few teams to show this approach to build new products. After a week of work, the team feedback was very positive. They felt more productive, that they achieved more, collaborated more and had more fun.

But when the teams went back into the organisation, problems started. The rest of the organisation didn’t understand how those teams operated. “It was basically like an organ rejection,” said Janice. Although the benefits of working in this new way were clear. “So, we took the tools of the Lean Startup and made FastWorks”. FastWorks is GE’s version of the Lean Startup. Renaming it allowed GE to make the ideas their own.

To deploy FastWorks, GE trained coaches in the Lean Startup tools and in change management techniques. Janice explains GE started using FastWorks on projects in its Health Care division, because it was the most regulated. “If we can make it work in a highly regulated industry, then we can make it anywhere.” And it worked. The teams using FastWorks managed to work with regulation to find out what was acceptable or not and define a safe framework to run experiments.

Rolling out FastWorks to the other divisions helped get new leads and bigger orders, leading to better outcomes. Even in the aviation division where the order book is already full for the next 10 years. People in the company started to apply FastWorks on everything, for instance, before making a PowerPoint presentation, they would ask: who is it for? what is the expected outcome? how can I measure it?

Focusing on being fast, agile and customer-centric slowly transformed GE.

A new style of leadership

As more and more projects used FastWorks, the discrepancy between this new way of working and the historical style of leadership became a problem. GE leadership style was about command and control (Six Sigma), prescribing what should be done and valuing perfection.

Realising the problem caused by this discrepancy, GE promoted a new style of leadership, shifting from:

command and control – we tell, you do, we check
⤷ empowerment – you lead, we help you

prescription – we know what needs to be done
⤷ discovery – let’s find out what should be done

measuring activities – this is what you did today
⤷ measuring impact – this is the impact your activity had

perfection
⤷ iterations – make it imperfect and then improve it

The GE Beliefs

This transformation pushed GE to question the company core values. This led to the creation of 5 GE Beliefs, explains Janice. As you can see they are strongly inspired by the Lean Startup principles.

GE Beliefs:
1. Customers Determine Our Success
2. Stay Lean to Go Fast
3. Learn and Adapt to Win
4. Empower and Inspire Each Other
5. Deliver Results in an Uncertain World

Read more about GE’s Lean Startup transformation

• How GE Applies Lean Startup Practices by Brad Power from HBR.
• How One Multinational Conglomerate Radically Changed Its Company Culture and Saved Millions by Jennifer Maerz (Lean Startup Co.)