What is the French and German plan to create bi-national champions really about? 2 страница

Generally the gains add up swiftly as Six Sigma squads discover ways to reduce personnel, capital spending, or overhead. Bosses can then re-deploy staff or take the gain to the bottom line. At Dow Chemical Co., for instance, each Six Sigma project has freed up an average of $500, 000 in the first year. In one case the discovery that an additive was causing imperfections in packaging materials enabled Dow to reduce defective items on that line by 70%. Managers claim that in total, such improvements have saved the company more than $750 million since 1999.

Increasingly, however, manufacturers are racking up their big savings far from the factory floor. Dow Chemical, for example, projects it will save another $750 million by the end of next year as it applies Six Sigma to such areas as procurement and sales. And Six Sigma experts at 3M Co. have employed the methodology to reduce inventories and speed up R& D efforts at the company's headquarters. One team even analyzed the performance of sales reps in 3M's orthodontic-products division to identify exactly why its top agents sold so much more than others. And it doesn't stop there. By judging how well employees run fix-it projects, company leaders are hoping to spot their successors. " Six Sigma is about developing tomorrow's managers, " says Chairman and CEO W. James McNerney Jr. " It gives them a shot to show what they can do."

Six Sigma isn't a cure-all, to be sure. In the first few months of a project, up-front training costs always outweigh any savings. And through the life of the project, the expense of compiling and analyzing data may also exceed what is saved, particularly in areas where a process cannot be easily standardized.

Even GE, which does thousands of Six Sigma projects a year, concedes it hasn’t yet made much headway in applying Six Sigma to its legal operations. Companies also stand to lose if top management doesn't buy the program and implement the fixes recommended by its top Six Sigma analysts, known as '" black belts."

But that said, GE is still pushing the envelope. Its GE Capital subsidiary recently dispatched a couple of black belts to Dell Computer Corp.'s headquarters in Round Rock, Tex., to analyze its accounts-payable process. After mapping the procedure step by step, they discovered that Dell was getting buried in paper invoices because its just-in-time manufacturing operations required that the company purchase some types of parts as often as 12 times a day. To solve the problem, the GE Capital team moved Dell from its slowpoke manual system to an Internet-based electronic filing setup. Estimated savings: $2.4 million a year.

Although Dell pockets the cash, GE can come out ahead, too. If GE customers are more productive and profitable, GE wagers that the goodwill generated through Six Sigma advice will translate directly into contracts. Jack Welch may have moved on. But to more and more companies, Six Sigma is gospel.

By Michael Arndt in Chicago

Business Week

The Nuts and Bolts of Six Sigma

What is it?

An analytical method aimed at achieving near-perfect results on a production line. In statistics, the Greek letter sigma denotes variation in a standard bell curve. One sigma equals 690, 000 defects per 1 million. Most companies do not better than three sigma, or 66, 000 errors per million. Six Sigma reduces that count to 3.4 defects per million That saves money by preventing waste.

How does it work?

The tool achieves results by reducing subjective errors in the assessment of problems. First, auditors define a process where results are subpar. Then they measure the process to determine current performance, analyze this information to pinpoint where things are going wrong, and improve the process and eliminate the error. Last, controls arc set up to prevent future bugs.

The language of Six Sigma

Black Belt — Leaders of team responsible for measuring, analyzing, improving and controlling key processes that influence customer satisfaction and/or productivity growth. Black Belts are full-time positions.

Green Belt — Similar to Black Belt but not a full-time position.

Master Black Belt — First and foremost teachers. They also review and mentor Black Belts. Selection criteria for Master Black Belts are quantative skills and the ability to teach and mentor. Master Black Belts are full-time positions.

Variance — A change in a process or business practice that may alter its expected outcome.

Process mapping — illustrated description of how things get done, which enables participants to visualize the entire process and identify areas of strength and weaknesses. It helps reduce cycle time and defects while recognizing the value of individual contributions.

BusinessWeek

Notes

1.Swiss army knife — швейцарские армейские ножи славятся качеством и обилием приспособлений, что позволяет с их помощью решать множество разнообразных задач

2.bell curve — колоколообразная кривая, гауссова кривая, кривая нормального распределения

Vocabulary

Exercise 2. Translate the following word combinations into Russian.

to undergo basic training; a sales target; to make up the bulk of the users; capital spending; capital gains, public spending; consumer spending; large-scale manufacturing; economy of scale; to rack up profits; to rack up savings; sales reps; procurement and sales; to implement the recommended fixes; just-in-time manufacturing operations; to generate profit; chief quality officer; to spot one's successor; for two successive years; to reduce inventories; to build up stocks of the goods; up-front costs; to outweigh advantages; to push the envelope; to pinpoint and fix a problem; gain in production; to gain ground

Exercise 3. Translate into English.

крупномасштабное производство; панацея (средство на все случаи); накапливать запасы; сокращать запасы; проводить корректировку товарных запасов; приносить прибыль; произвести оценку проблемы; расходы на капитал; отгрузить некий товар г-ну А; переводить работников на другое место; счета к оплате; счета к получению; накладные расходы; преимущество в конкуренции; назначить преемника; передать управление снабжением поставщику; рост производительности труда; прирост объема производства

Exercise 4. Translate the following text into Russian paying attention to the underlined words.

1 Since the salad days of just 18 months ago, worldwide revenues from investment banking have fallen on average by 43% at the big firms, and profits by 49%, according to Boston Consulting Group (BCG).

2. Underwriting initial public offerings (IPOs) of shares is one of the juiciest bits of investment banking.

3.As they wield the axe, the heads of the biggest investment banks hope that they are merely chopping away the forced growth of the past two years, bringing a healthier cost structure back to the industry.

4.Alfa Bank, a leader of the Russian corporate-banking world, is treading water when it comes to individual accounts, growing no faster than the overall market.

5.The latest merger boom may turn out to be just a boomlet.

6.The uninspiring track record of some shipowners is but a squall compared with the storms that may be gatheringover the horizon. The recent bumper returns from shipping have prompted a ship-building boom. As a result an armada of new ships is joining the world's fleets just as the rate of growth of world trade may be slowing.

7.The bottom line, Ms Reid said, is that Coca-Cola wants to be as successful with marketing beverages geared toward kids as it is selling carbonated soft drinks to teens.

Exercise 5. Translate the following text into English.

Концепция «шесть сигма» была разработана компанией «Моторола» (Motorola) в 80-е годы как действующая философия и подход к достижению высокого качества посредством процесса всеобъемлющего управления качеством, что позволило компании «Моторола» получить национальную премию Малколма Болдриджа (Malcolm Baldridge) за работы в области качества.

С тех пор такие компании, как «Элайд Сигнале», «Дженерал Электрик», «Тексас Инструменте», «Бомбардье» (Allied Signals, General Electric, Texas Instrument, Bombardier) и другие, адаптировали эту концепцию к своим нуждам. Однако базисные понятия, первоначально выдвинутые «Моторола», сформировали основы метода «шесть сигма». Они включают следующие положения:

• Подчеркивается, что число дефектов на единицу продукции и число дефектов на миллион событий служат стандартами измерений, применимыми ко всем аспектам любого предприятия: аппаратные средства, программное обеспечение, производство, разработка новой продукции, администрирование.

• Проводится интенсивное обучение с последующим развертыванием проектной бригады в целях повышения рентабельности, сокращения непроизводительных действий и времени производственного цикла.

• Осуществляется опора на корпоративных спонсоров, ответственных за поддержку деятельности рабочих бригад. Эти спонсоры обеспечивают механизмы, которые могут потребоваться рабочим бригадам, чтобы преодолеть сопротивление переменам, получить дополнительные ресурсы, а также удерживают бригады от выхода за пределы стратегических целей предприятия.

• Подготавливаются высококвалифицированные эксперты по улучшению процессов бизнеса, умеющие применять качественные и количественные инструменты улучшения для достижения стратегических целей бизнеса.

• Обеспечивается, чтобы соответствующие меры измерения процесса идентифицировались заранее, а измерения отражали бы результаты бизнеса до и после изменений и вносили бы вклад в конечный результат. Устанавливаются цели, ориентированные на величины улучшений на порядок (в 10 раз) выше.

• Назначаются обученные и сертифицированные эксперты по улучшению процесса бизнеса, осуществляющие руководство проектными бригадами, на полномасштабную нагрузку в течение от одного до трех лет.

Каковы отличия концепции «шесть сигма»?

Некоторые специалисты помнят программы «нулевых дефектов» 60-х годов. Что отличает метод «шесть сигма»? С одной стороны, этот метод сосредоточен на определении меры удовлетворения потребителя на каждой стадии процесса, а также на непрерывном снижении времени производственного цикла и числа дефектов на миллион событий на каждой стадии. Число 3, 4 дефекта на миллион событий, получаемое при использовании метода «шесть сигма», столь мало, что воспринимается как «фактическое совершенство». Тот факт, что это не ноль, как раз и позволяет людям уверовать в «шесть сигма».

www.six-sigma. Rи

Exercise 6. Read the article and summarize its contents in writing. Speak about GE changing its course under Jeffrey Immelt.

The Immelt Revolution

He's turning GE's culture upside down, demanding far more risk

and innovation

I

Despite his easy-going confidence, Jeffrey R. Immelt admits to two fears: that General Electric Co. will become boring, and that his top people might act like cowards. That's right: cowards. He worries that GE's famous obsession with bottom-line results — and tendency to get rid of those who don't meet them — will make some execs shy away from taking risks that could revolutionize the company.

Immelt, 49, is clearly pushing for a cultural revolution. For the past three and a half years, the GE chairman and CEO has been on a mission to transform the hard-driving, process-oriented company into one steeped in creativity and wired for growth. He wants to move GE. average organic growth rate — the increase in revenue that comes from existing operations, rather than deals and currency fluctuations — to at least 8% from about 5% over the past decade. Under his former boss, the renowned Jack Welch, the skills GE prized above all others were cost cutting, efficiency, and deal-making. What mattered was the continual improvement of operations, and that mindset helped make the $152 billion industrial and finance behemoth a marvel of earnings consistency. Immelt hasn't turned his back on the old ways. But in his GE, the new imperatives are risk-taking, sophisticated marketing, and above all, innovation.

This is change borne of necessity. The Welch era reached its zenith in the booming, anything-goes economy of the late 1990s. Back then, GE always seemed to beat the consensus forecasts by a penny a share — and investors felt no burning need to figure out exactly how they did it. Immelt has no such luxury. With a slower-growing domestic economy, less tolerance among investors for buying your way to growth, and more global competitors, Immelt, like many of his peers, has been forced to shift the emphasis from deals and cost-cutting to new products, services, and markets. Any other course risks a slow descent into irrelevance. " It's a different era, " says immelt, a natural salesman who still happily recounts the days when he drove around his territory in a Ford Taurus while at GE Plastics. He knows the world looks to GE as a harbinger of future trends, says Ogilvy & Mather Worldwide Chief Executive Rochelle B. Lazarus, who sits on the GE board. " He really feels GE has a responsibility to get out in front and play a leadership role."

П

So how, exactly, do you make a culture as ingrained as GE's sizzle with bold thinking and creative energy? To start, you banish some long-cherished traditions and beliefs. Immelt has welcomed outsiders into the highest ranks, even making one, Sir William M. Castell, a vice-chairman. That's a serious break with GE's promote-from-within past. He is pushing hard for a more global workforce that reflects the communities in which GE operates. Immelt is also encouraging his homegrown managers to become experts in their industries rather than just experts in managing. Instead of relying on execs who barely had time to position a family photo on their desk before moving on to the next executive assignment, he's diversifying the top ranks and urging his lieutenants to stay put and make a difference where they are.

Most of all, Immelt has made the need to generate blockbuster ideas more than an abstract concept. In true GE fashion, he has engineered a quantifiable and scalable process for coming up with money-making " eureka! " moments. While Welch was best known for the annual Session С meetings during which he personally evaluated the performance of GE's top several hundred managers, Immelt's highest-profile new gathering is the Commercial Council. Immelt leads the group of roughly a dozen top sales and marketing executives, including some unit heads such as GE Consumer Finance CEO David R. Nissen. The members hold phone meetings every month and meet each quarter to discuss growth strategies, think up ways to reach customers, and evaluate ideas from the senior ranks that aim to take GE out on a limb. " Jeff has launched us on a journey to become one of the best sales and marketing companies in the world, " says Nissen, who describes the meetings as collegial and more experimental than other GE gatherings.

This is no free-for-all, however. Business leaders must submit at least three " Imagination Breakthrough" proposals per year that ultimately go before the council for review and discussion. The projects, which will receive billions in funding in the coming years, have to take GE into a new line of business, geographic area, or customer base. Oh, and each one has to give GE incremental growth of at least $100 million. Such change can be scary stuff for folks steeped in Six Sigma, who were led to believe that if you made your numbers and were prepared to uproot your family every year or two, you had a shot at the top rungs. Now they're being asked to develop real prowess in areas such as creativity, strategy, and customer service that are harder to measure. They are being told to embrace risky ventures, many of which may fail. Immelt's GE can be seen as a grand experiment, still in its early days, to determine whether bold innovation can thrive in a productivity-driven company.

ш

То inspire the fresh thinking he's looking for, Immelt is wielding the one thing that speaks loud and clear: money. The GE chief is tying executives' compensation to their ability to come up with ideas, show improved customer service, generate cash growth, and boost sales instead of simply meeting bottom-line targets. As Immelt puts it, " you're not going to stick around this place and not take bets." More concretely, 20% of 2005 bonuses will come from meeting pre-established measures of how well a business is improving its ability to meet customer needs. And while he hasn't exactly repudiated Welch's insistence that managers cull the bottom 10% of their staff, insiders say there's more flexibility, more subjectivity to the process. Risking failure is a badge of honor at GE these days.

IV

To lay the groundwork for an organization that grows through innovation, Immelt took steps early on to rejigger the GE portfolio. He committed to sell $15 billion of less profitable businesses such as insurance, while shelling out more than $60 billion in acquisitions to dive into hot areas such as bioscience, cable and film entertainment, security, and wind power that have better growth prospects. In doing so, he pared the low-margin, slower-growth businesses like appliances or lighting, which he diplomatically calls " cash generators" instead of " losers, " down to 10% of the portfolio, from 33% in 2000. Nicole M. Parent of Credit Suisse First Boston is impressed with " the way they have been able to evolve the portfolio in such a short time" and with so little disruption. " This is a company where managers will do anything to achieve their goals."

Good thing, as their back-slapping chief is now looking for " those things that grow the boundaries of this company." He's confident that the new business mix and growth incentives are already paying off. At GE's annual gathering of its top 650 executives in Boca Raton, Fla., in January, he insisted that " there's never been a better day, a better time, or a better place to be [at GE]! " Strong words in a company that stretches back 127 years to founder Thomas Edison.

That in itself may be a stretch of the imagination for now, but Immelt is trying to recast the company for decades to come. He's spending big bucks to create the kind of infrastructure that can equip and foster an army of dreamers. That means beefing up GE's research facilities, creating something akin to a global brain trust that GE can tap to spur innovation. He has sunk $100 million into overhauling the company's research center in Niskayuna, NY, and forked out for cutting-edge centers in Bangalore, Shanghai, and Munich.

Globalizing research has allowed GE to get closer to overseas customers. The simple fact is that most of GE's growth will come from outside the U.S. Immelt predicts that developing countries will account for 60% of the company's growth in the next 10 years, vs. about 20% for the past decade. But he is also spreading new practices to lethargic economies such as Germany. After a 2002 meeting with German Chancellor Gerhard Schroder reinforced his notion that GE could be doing more in that country Immelt decided to open the Munich center. By July, 2004, a new center was up, and the results were immediate: the company saw a 22% growth in German-speaking markets last year from 2003.

V

Now that Immelt has repositioned the portfolio and added resources, his main objective is to get more immediate growth out of the businesses he already has. That's where the Imagination Breakthroughs come in. Over the past 18 months, Immelt has agreed to invest $5 billion in 80 projects that range from creating microjet engines to overhauling the brand image of 3, 000 consumer-finance locations. The hope is that the first lot will generate $25 billion in revenue next year — cheap, if it works, when you consider what it would cost to acquire something from the outside with that level of sales. In the next year or two, Immelt expects to have 200 such projects under way.

The pressure to produce could not be more intense. Many of the company's 307, 000 workers weren't exactly hired to be part of a diverse, creative, fleet-footed army of visionaries who are acutely sensitive to customers' needs. " These guys just aren't dreamer types, " says one consultant who has worked with the company. " It almost seems painful to them, like a waste of time." Even insiders who are openly euphoric about the changes under Chairman Jeff admit to feeling some fear in the depth of their guts.

" This is a big fundamental structural change, and that can be tough, " says Paul T. Bossidy, CEO of GE Commercial Equipment Financing, who is reorganizing his sales force so that each person represents all of GE to particular customers. Susan P. Peters, GE's vice-president for executive development, even talks about the need for employees to " reconceptualize" themselves. " What you have been to date isn't good enough for tomorrow, " she says. Ouch.

VI

To Immelt. the best managers are great marketers and not just great operators. That's a rethinking of GE's long-held bias that winning products essentially sell themselves. Beth Comstock, who was appointed chief marketing officer three years ago with the mission of boosting the company's marketing expertise, says that when she started, a number of insiders were skittish about the new agenda: " Everyone thought, I've got to get into sales and marketing to be relevant in this company? "

Well, yes. Comstock is trying to elevate the role of marketing throughout GE. She has helped develop a commercial leadership program that sends the best and brightest marketers around the organization for two intensive years, much as GE's corporate audit staff has long done on the finance side. The auditors were important to maintaining financial discipline under Welch. Now, GE has initiated new courses in marketing, as well as ones on how to spark idea generation. Some executives have also taken to holding " idea jams, " where people from diverse businesses brainstorm. Within GE Energy alone, there are " growth heroes, " who are held up as emblematic of where the company wants to go, a " virtual idea box" to spur brainstorming via the Web, and " Excellerator awards" for the development of ideas. The jargon may smack of classic GE, but the approach is novel. " This is about unlocking the curiosity, yet having the rigor stay intact, " says Comstock.

In this era, marketing is not just a matter of producing edgier commercials or catchier slogans. It means getting outside the company to understand markets and customers. Among other things, GE's top marketing executives have spent a lot of time examining the practices of companies such as Procter & Gamble Co., which let them spend time last November in " The GYM" where strategies and issues are debated, examined, and maybe even solved. " The idea is to enhance a team's creative thinking, " says P& G spokesman Terry Loftus. GE staffers also spent time at FedEx Corp., which has exceptional customer service. Welch did the same thing in benchmarking Motorola Inc. when he delved into Six Sigma, but the external focus is even stronger now.

Immelt wants his managers to lead industries rather than merely follow demand. Take the company's move to create a cleaner coal plant another Imagination Breakthrough — before its customers were even asking for it. GE initiated the push after acquiring Chevron-Texaco Corp.'s gasification technology business last year. Immelt and GE Energy CEO John G. Rice brought together big power customers and experts on subjects such as climate change at GE's education center in Croton-on-Hudson, N.Y., last July to debate where the industry would be in 2015. James E. Rogers, chairman and CEO of public utilities giant Cinergy Corp., was shocked to hear Immelt talk about the need to generate electricity with far fewer emissions — a touchy subject in an industry that still bums a lot of coal. " He was unafraid to articulate a point of view that his customers might not share, " says Rogers, whose company bums 30 million tons of coal a year.

What convinced Rogers to partner with GE on a cleaner coal power plant was the prospect of having an integrated package managed by GE. Instead of forcing Rogers to license the technology and figure it out himself, GE in partnership with Bechtel Corp. will design and implement the plan. GE's promise: that the cleaner-burning plant will soon become competitive with pulverized coal and that GE will handle any hiccups in the process.

VII

But there's a limit to how much Immelt can transform his own people. A key strategy — and one that amounts to a gut punch to the culture — involves bringing more outsiders. In sales and marketing alone, GE has hired more than 1, 700 new faces in the past few years.

Immelt is also looking for more leaders who are intensely passionate about their businesses and are experts in details. No one represents Immelt's vision of what a GE leader should be better than Bill Castell.

Castell is quite unlike the archetypal GE executive. He's totally immersed in his industry, a leading thinker on the future of personalized medicine who will never head up a business based on jet engines or commercial finance. Nor is he pursuing a black belt in Six Sigma or losing sleep over making his numbers. Yet Immelt loves him. " I want managers to have the kind of curiosity that Bill has, his passion for the industry, " he says. " He understands where the market is going."

To encourage that kind of expertise and passion in the rest of his organization, Immelt is urging people to stay in place longer to build stronger relationships with customers and markets. GE Energy's Rice —a hotshot who is emblematic of the old system, in which a great GE manager could parachute onto the scene to turn any business into gold —notes that the idea of staying put takes some adjustment " There was always an impression in the midlevel ranks that if you weren't moving every few years, something was wrong, " says Rice. He now says he likes the fact that he has been in one place for four years, because he's developing a deeper knowledge.

Investors are still waiting to see whether GE's evangelizing chairman can truly make his company grow faster than the world around it. Even some of his fans think that GE's new momentum has more to do with the overall economy man with idea generation. Says Steve Roukis of Matrix Asset Advisors, which owns 2 million GE shares: " H" you have a revolutionary decade of growth around the world, who's going to be there to capture it? GE."