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Impact of Six
Sigma Implementation at GE |
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Results achieved over the first two
years (1996-1998):
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Revenues have risen to $100 billion, up 11%
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Earnings have increased to $9.3 billion, up 13%
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Earnings per share have grown to $2.80, up 14%
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Operating margin has risen to a record 16.7%
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Working capital turns have risen sharply to 9.2%, up from 1997's
record of 7.4
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The Toughest
Stretch
Goal
Jack Welch
was told that Six Sigma, the quality program pioneered by
Motorola, could have a profound effect on
GE quality.
Although skeptical at
first, the GE Chairman initiated a huge campaign – in the GE Way, a way that
had never been done before – to infuse quality in every corner of the
company. Welch called six sigma the most difficult
stretch goal
GE had ever undertaken. Within four years, "we want to be
not just better in quality, but a company 10,000 times better than its
competitors," he announced. "We want to change the competitive
landscape by being not just better than our competitors, but by taking
quality to a whole new level. We want to make our quality so special, so
valuable to our customers, so important to their success that our products
become the only real value choice."7
The Biggest
Opportunity
for Growth
Welch made an official announcement launching the quality
initiative at GE's annual gathering of 500 top managers in January 1996, He
called the program "the biggest opportunity for growth, increased
profitability, and individual employee satisfaction in the history of our
company." He has set itself a goal of becoming a six sigma quality company
–
producing nearly defect-free products, services, and transactions – by the
year 2000.
Setting
Individual
Performance Standards
In his letter to all Corporate Executive Council attendees in
1997, Jack Welch described what he felt should be the five characteristics
of the people who steer the quality program through its rigors:
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Enormous energy and
passion for the job – a real leader
– sees it
operationally, not as a "staffer."
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Ability to excite,
energize, and mobilize organization around six sigma benefits – not
a bureaucrat.
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Understands six sigma is all about customers winning in their
marketplace and GE bottom line.
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Has technical grasp of six sigma, which is equal to or bettered by
strong financial background and capability.
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Has a real edge to deliver bottom-line results and not just technical
solutions.
Making the Six Sigma Process Work...
Making Quality
the Job
of Every Employee...
5 Corporate Measures
to
Help a Business to Track Progress in Six Sigma...
Everyday Six Sigma...
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