Our people must be as comfortable in New Delhi and Seoul as they are in Louisville or Schenectady . . .
When Jack Welch came on board, General Electric had hundreds of boundaries. Those boundaries kept people within the company from communicating easily with one another. And by extension, they kept GE personnel from communicating with outside constituents.
When Jack Welch assumed command, he tried to identify all the debilitating boundaries within GE. He knew that if he could eliminate boundaries, it would go far toward creating the open, informal business environment that he believed was essential.
THE GENESIS OF BOUNDARYLESS
Welch called upon GE to become boundaryless. The term was certainly not in any dictionary. And as Welch was quick to acknowledge, the made-up word was clumsy at best. But people soon understood what it meant.
Welch first began using the term in the early 1990s. At that time, he acknowledged that the business strategies he had employed in the 1980s—restructuring, reducing the number of management layers, and the like—were too incremental. They took too long to affect the company.
Something new was needed. The answer was boundaryless.
WHAT’S IN A WORD?
The boundaryless company, Welch notes, is one in which “we knock down the walls that separate us from each other on the inside, and from our key constituents on the outside.” The boundaryless company:
- Removes barriers between functions
- Removes barriers between levels
- Removes barriers between locations
- Reaches out to important suppliers and makes them part of a single process
We no longer have the time to climb over barriers between functions like engineering and marketing, or between people—hourly, salaried, management, and the like.
How does one get rid of boundaries? At GE, it was easiest to get rid of the vertical ones—the boundaries of hierarchy—and the company made great strides in this area in the 1980s.
What happens after getting rid of the boundaries?
Instead of hierarchies, there are cross-functional teams.
Instead of managers, there are business leaders.
Instead of workers who are told what to do, there are workers who decide what to do.
If you want to get the benefit of everything employees have, you’ve got to free them—make everybody a participant.
Everybody has to know everything, so they can make the right decision by themselves.
By the summer of 1993, boundarylessness had become one of the core values at GE:
If you’re turf-oriented, self-centered, don’t share with people, and are not searching for ideas, you don’t belong here . . .
Being boundaryless allows us to jab one another and have fun. We rag each other when somebody starts to protect turf.
THE CEC MODEL
One powerful force for boundarylessness at GE is the Corporate Executive Council (CEC), which includes the top 25 to 30 executives of the company. It meets every 3 months, from a Monday to a Wednesday, for a free-flowing exchange of ideas.
In the bad old days, says Welch, GE functioned like a classic conglomerate. “Each business quarter,” he explains, “the divisional manager phoned the finance person to report the numbers.”
GE is very different today. Through the CEC, leaders don’t merely discuss numbers; they exchange ideas.
By design, CEC sessions have no formal agenda. The point is to keep it loose.
A senior GE official may distribute a brief memo in advance of the get-together to alert the executives about the main topic of the meeting. But that’s about it in terms of structure. The whole purpose of the meeting is to foster learning about problems being faced by other businesses and to pick up good ideas that might work in one’s own business. Structure would work against these goals. The CEC is, in a sense, a model and metaphor. Welch urged his colleagues at GE to break down boundaries, wherever they existed, from the CEC level on down. The fewer the boundaries, the more likely that employees could do their jobs well.
WELCH RULES
- Root out boundaries. Anything that disrupts communications between departments and employees or between employees and outside constituents is bad.
- Model behaviors with senior managers. Welch credits his CEC meetings with helping to spread the flow of ideas throughout all of GE’s diverse businesses. They also set a positive pattern for others in the company.
- Involve everybody. To achieve boundarylessness in your organization, involve everybody. If boundaries are deeply ingrained, consider holding a Work-Out session.