Jack Welch & The G.E. Way: Management Insights and Leadership Secrets of the Legendary CEO by Robert Slater

Author:Robert Slater [Slater, Robert]
Language: eng
Format: azw3
Publisher: McGraw-Hill Education
Published: 1998-08-21T04:00:00+00:00

Eugene Murphy, GE vice chairman, recalls his experience as head of Aircraft Engines: “If we look at a product and say it will take four years to do that product, we then look at how to improve the schedule. We say we can improve it by a year. When all is said and done, we have a ways to get to the year; but we may add two months.”

Murphy used the concept of stretch to attain $50 million in benefits from GE’s six sigma quality program when he was running Aircraft Engines earlier in 1997. “We took a stretch to try to get to $70 million. It’s going to be very difficult to accomplish. I don’t know at this point if we’ll achieve it or not. We may end up getting to only $60 million. But if we had set the goal at $50 million, the likelihood is that we’d have worked like hell and we’d have gone to $50 million. If we set it at $70 million, there’s a better chance of going beyond $50 million.” (P.S.: Engines did achieve the $70 million.)

To Robert L. Nardelli, head of GE’s Power Systems, stretch is a concept not to be taken too literally. “Stretch,” he suggests, “means really challenging yourself and believing there is an infinite capacity to improve upon everything you do. Once you get through the denial period, then you really embrace stretch as something you want to do, not as something management tells you to do. It is far better to challenge yourself and then experience the satisfaction of winning, than to be driven to the same point anyway. With this mindset, the term stretch becomes secondary to the way you run the business. You expect to get top-line growth regardless of the industry environment because it’s ingrained in your attitude.”

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