by Ted Stiles & David Portney
Stiles Associates

General Electric (GE) recently published its 2023 Annual Report and the results were significant, more than tripling earnings while generating almost 70 percent more free cash flow than 2022. This was no accident, as CEO Larry Culp led a shift to a back-to-basics mentality that fostered a culture of continuous improvement.

“Our imprint is synonymous with progress itself,” he noted in the report. “GE has propelled the world forward because we have believed a better way was possible.”

This alteration allowed the company to focus on its fundamental principles and values, eliminating unnecessary complexities and streamlining processes for greater efficiency.

The mentality also encourages employees to prioritize core competencies and essential tasks, quickly enabling them to identify areas of success and areas requiring improvement. This approach empowered frontline workers by providing them with easily understandable feedback on their progress, successfully aligning its operations with the principles of Lean management to optimize its performance.

One of the key aspects of Culp's approach is the emphasis on visual management techniques, where his introduction of red and green indicators provided a clear and intuitive means of tracking performance. This visual representation simplified information and enabled teams on the floor to assess their performance instantly.

By adopting these techniques, GE created a real-time feedback loop that promotes a sense of ownership and accountability among employees. The visual approach not only simplifies information but also enhances communication and collaboration among team members.

Culp's approach as CEO of GE included creating a safe environment for employees to disclose processes that aren't working or underperforming. Unlike the punitive and competitive culture of the past, he encourages open communication and constructive feedback. By removing the fear of reprisal for pointing out flaws or areas of improvement, GE has reaped the benefits to the bottom line.

This culture of openness and collaboration enhances employee engagement and satisfaction, leading to higher levels of productivity and retention. Employees feel empowered to take ownership of their work and contribute to the overall success of the organization.

The shift in organizational culture brought about by Culp's approach is crucial for driving sustainable growth and long-term success. By promoting transparency and encouraging a willingness to address shortcomings, Culp has enabled GE to adapt more effectively to changing market dynamics and customer demands.

His approach as CEO of GE serves as a blueprint for other organizations seeking to drive sustainable growth and innovation. The emphasis on back-to-basics principles and Lean leadership practices demonstrates the power of simplicity, clarity and a culture of continuous improvement. Other organizations can learn from GE's transformation under Culp's leadership and apply similar strategies and tactics to drive their own success.