While he was flying over New York City in a helicopter one winter’s day in 1987, Jack Welch had a lightbulb moment. The charismatic chairman and CEO of the General Electric Company (GE) was frustrated with his organisation’s silo mentality and its detrimental effect on decision-making. As he sped past the skyscrapers of Manhattan, he came up with a solution that would become known as the GE work-out programme.
This took the form of large meetings designed to optimise communication and accelerate change. The sessions had to involve cross-functional groups of between 45 and 100 people from different levels of the organisation to ensure a broad range of perspectives. Each session would be led by one member of the executive leadership team, who had the power to approve or veto any idea arising.
Whenever significant problems presented themselves at GE and rapid adjustments were needed, the company would convene work-out sessions. In each case, the teams that were closest to the problem at hand worked intensively alongside representatives of customers, suppliers and/or other relevant business partners to analyse critical issues and come up with their recommended solutions, which were then implemented at speed.
Many other big companies, including IBM and Philips, have since adopted a similar approach, yet some of the world’s largest brands still find effective cross-functional collaboration problematic. A silo culture, in which departments work independently and rarely share information, can stall the decision-making process, reduce productivity, hide serious problems and hold back innovation.