GE Aircraft Engines: A Supersonic Turnaround

FRAMINGHAM (05/01/2000) - Although its business is jets, GE Aircraft Engines (GEAE) has never been known for moving at supersonic speed. Quality, thoroughness and methodology have made it the world's largest producer of aircraft engines, but it moves more like a C-130 than an F-15.

Early last year, when it came to Chairman Jack Welch's Internet strategy, GEAE, a division of General Electric Co. was clearly stalled. A massive customer-extranet initiative was collapsing under its own weight, leaving GEAE in the dust of sibling companies that had quickly embraced e-commerce.

Here's how the $11 billion company transformed itself in three months from a plodding, straight-laced electronic-business-technology underachiever to a kamikaze start-up with an impossible mission and an attitude that failure simply wasn't an option.

Grounded

Last May, as it became clear that an ungainly, unfocused and overly complex 18-month e-commerce attempt would never get off the ground, CEO Jim McNerney changed course. He recruited a human dynamo named John Rosenfeld to jump-start e-commerce by taking one part of the failed vision - a customer Web center for the complex spare-parts business - and building it at lightning speed.

Rosenfeld, a former Green Beret who has led jump teams from 20,000 feet, is used to tough assignments, and he liked McNerney's mandate: "Kick open doors; break down barriers. Break some glass if you have to, but get this thing rolling."

Rosenfeld explains why this was do-or-die time for e-commerce: "The technique of being a fast follower no longer works. Things move so fast that the first one to jump in is drying off on the other side of the pool before you even think of jumping. And GEAE was behind. That's why there was such an urgency about moving fast."

But Rosenfeld took time to plan. He assembled a small team that spent the next three months quizzing GEAE's external customers - mostly airlines and aircraft manufacturers - about their needs. Their feedback would be crucial throughout the project. "That allowed us to build the right thing and allowed them to feel a part of it," says Ric Davila. "Their taking some ownership of it is a big win for us, because if they don't use it, we failed."

Davila, an early recruit, was the team's Six Sigma Black Belt, a standard position on all GE projects, whose job was to ensure that Welch's corporatewide quality initiative was integrated into all processes.

Another key constituency was senior management. A GE mantra is that if you want the business to change, get the leadership to change. So Rosenfeld launched an electronic-mentoring process to educate top brass about the Web. It worked.

McNerney, who used to have his secretary print his e-mail, was soon yoked to his laptop and checking in online from around the world.

As summer turned to fall, Rosenfeld began recruiting from the business units and from outside the company. He hired people in 24 hours. At the end of an interview, if the candidate was right, he made an offer on the spot. Those who accepted on the spot were processed immediately.

Meanwhile, McNerney recruited Dave Overbeeke to lead the broader e-commerce initiative, which Rosenfeld's project was to spearhead, and Scott Guilfoyle came over from GE Plastics to become CIO for electronic business. Guilfoyle's first job would be to tie all the proposed Web functionality to GEAE's back-end Oracle Corp. systems.

Guilfoyle, a GEAE veteran who had been away for years, remembered its information technology staff as a bunch of methodical engineers who worked in the basement. But McNerney and Overbeeke assured him that electronic-business IT would be different.

Electronic Space

Overbeeke had decided that GEAE's manufacturing plant was the wrong environment for his team. He wanted a neutral place to assemble team members from every corner of the company, and he wanted the space to reinforce their energy and excitement and to provide the automony for them to do things their way. So he commandeered a vacant concrete warehouse full of old pallets and barrels and turned it into a clubhouse. It was across the street from the GEAE plant in Cincinnati but light-years away from the GEAE standard of engineers toiling in the basement.

The space has cavernous, open ceilings and rounded, open "pod" workspaces painted in vibrant, warm shades of orange, green and purple. Above it all hangs a gridwork of suspended white plastic mesh trays that guide dozens of multicolored cables running like a visible electrical current through the space. A great design feature, it enables new cable connections to be made in seconds. Overbeeke has scattered toys throughout the space - air hockey, Foosball, a pool table - to help people let off steam. "We are trying to create a new environment within GE that will allow for maximum creativity," Rosenfeld says.

The main conference room, wryly christened "Cognito," is a wide-open, step-down space between two pods that's full of state-of-the-art electronic and audiovisual equipment. McNerney's idea: "When you have meetings, I want everybody to see it. I want them to catch the energy, get the virus."

On Oct. 15, the team moved into the front half of its new space as construction continued in the back. "You've got all these people crowded in - taking any table, any space," Guilfoyle recalls. "The ‘back 40' is under construction, so you've got pounding - Bam! Bam! Bam! - and drilling - Rrrrrr! Rrrrrrr! - banging and clanging, and people are screaming and everybody's talking - and you've got this energy! It was like nothing I've done at GE, and I've been here 17 years. It was awesome.

"We try all the time to have what Jack [Welch] calls a small-company environment with the muscle of a big company," he says. "We're always working on that, but this is over the top."

Team members are clearly enjoying their upstart image, and they boast that senior GE leadership has been known to ask teasingly to see their body piercings. But it's a start-up with a difference. "We're not a garage," Overbeeke says. "We're an $11 billion business that has an incredible desire to get this done and the resources to do it."

Stretch goals

Around October, as the team began to gel, Rosenfeld and Overbeeke decided to up the ante. Taking their cue from Welch, who is known for establishing "stretch" goals, they picked a Jan. 1 launch date. "Everyone does best when they're the underdog," says Overbeeke.

Rosenfeld began wearing a hat embossed with "01/01/00." Before long, 01/01 paraphernalia was everywhere. Once, during a presentation, someone asked Rosenfeld what the launch date was. He pulled up his pant leg, displaying 01/01/00 socks, and a senior vice president said, "Stop there, John. We don't want to see your boxers."

"But it got them fired up," Rosenfeld laughs. "They were going to hit it!"

Davila, a former Army ranger, says working on the project was a lot like being back in the Special Forces. "In both situations, you've got very talented people and you get things that are pretty impossible to do," he says. "But you don't waste any time on how hard this is or whether we can do it. You make it happen."

For example, late in the project, a demonstration was scheduled for a key customer, but the site wasn't working properly. Rather than cancel the demo, Davila and his team boarded a plane to the customer site. While they were in the air, the team back home furiously attacked the final bugs. By the time the plane landed, the site was up.

Pushing the envelope

"Speed was driven by management," says Mindy Rishforth. She started Oct. 7 as program manager for transactions, the largest segment of the customer Web center project, which was code-named Mercury, after the god of speed.

She says Overbeeke's clout in the business smoothed the way. "He has great business ties - a lot of pull, a lot of credibility, a lot of respect," she explains. "So anytime we came across a bureaucratic issue, he would step in and say, ‘Look guys, we have to get this signed today.'"If he couldn't do it, McNerney would. When finance said it would take 45 to 60 days to purchase software, the CEO intervened, and they got it in four.

But often Rosenfeld could move mountains alone by waving the Web banner. One Friday he had to find space for 40 contractors who would be arriving Monday. He eyed a huge double-size classroom nearby whose occupants resisted moving, since they had already scheduled daily classes for the next three months. "I said, ‘What is the No. 1, 2 and 3 priority for the business?" Rosenfeld recalls. They gave up the space.

"Jack Welch gives us instant credibility," Overbeeke says.

Rosenfeld found that his gonzo approach was contagious. "We had a little resistance up front, but once people started seeing how effective it was, they wanted to be a part of it. They all started moving at light speed. The janitors go through here faster than they do in the other buildings."

Rishforth also credits the spare-parts business, whose people worked weekends to help define the requirements and test usability. "There was a lot of commitment," she says.

The last part of the juggernaut fell into place when the team found two key vendors, SpaceWorks Inc. in Rockville, Maryland., and Enigma Inc. in Burlington, Massachusetts, that were able to match the team's commitment. "They had the same culture; they were energized," Overbeeke says. "They were going to die on their swords trying."

GE's corporate CIO, Gary Reiner, says the project is a great example of GE's famous "boundaryless culture" in action, melding the strengths of engineering, marketing, service, pricing and IT. " They co-located that team and brought that together in record time," he says. "They were able to cut through a whole lot of stuff to get this done."

The customer Web center went live on schedule, with 14 customers online by the end of January and plans for all 300 customers to be online by midyear.

Launch Lessons

No one claims that the site is perfect. Julie Gruntrip, a Six Sigma Black Belt, is focusing on customer feedback and tracking issues to help solve problems and head off difficulties for future customers.

But customer response has been enthusiastic. "As far as support and service, this is way ahead of the others we deal with," says Piotr Wolak, a project manager in Continental Airlines' engineering group. "It will make my job easier. And if the other [suppliers] do not go the same route, my personal loyalty will be with GE."

The e-commerce effort has only just begun. The team will broaden the effort to other GEAE business units while improving its robustness. "Running an Internet company is not something we've done before, so all the processes that go around making it a stable operation are being established as we go," says Guilfoyle.

"It's a tremendous challenge."

There's also the 800-pound gorilla of back-end integration: 85% of orders come through electronic data interchange (EDI), and though the site tracks those orders, most customer back-end systems aren't integrated with the Web. So if a customer orders online, the payment systems don't kick in. "We've got to close that loop," Rishforth says.

Meanwhile, Guilfoyle is leveraging e-commerce throughout GEAE by using the familiar Six Sigma Black Belt model. He's appointing "e-belts" - dedicated top-notch people in each division - to own and drive Web thinking in the business units. "We're the gurus; we set the architecture and direct it," he says. "The e-belts will generate the rest."

Guilfoyle predicts that tying e-commerce to Six Sigma energy will be powerful.

"Get ready for the wave when these e-belts start kicking into gear," he says.

"When GE believes in something, it happens. Everything that was Priority 1 will start to look like Priority 2 real quick."

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