Management Challenge

Management Challenge

Reiner acknowledges the need to manage things differently under real time, saying the company's management structure and approach have changed enormously over the past four years to accommodate some of the new challenges being brought on by the real-time movement. Yet he says that "real time" is also a bit of a misnomer. "Right time" might be a better way of looking at it, he says: Few operations at GE outside of finance need to be monitored on a minute-by-minute, much less a real-time, second-by-second basis. "Most of our monitoring is daily or weekly," he says, "or at eight-hour intervals." While it might be technically possible to monitor much more rapidly, there is little or no advantage to be gained from such an increase in data, experts agree.

Still, according to Lynn Boyd, manager of information development at GE, there are cultural speed bumps that must be negotiated. Even within IT at GE, she says, the digitization drive has led to a "significant restructuring" of the company's information management training program, "especially the two-year, entry-level program for IT people." Specifically, it has become much faster paced, and a lot less site specific. "The business problems they're dealing with now, which used to involve business planning, now increasingly revolve around digitization," explains Boyd. "You could find yourself working on a project with maybe two people here in our Fairfield office, and another 30 working on coding in Bangalore, India." Clearly, holding a meeting under such circumstances will continue to involve, among many things, whole new levels of uncertainty and collaboration.

Analysts credit GE with having the management discipline built into the culture so that the movement toward more automation might be easier than at other companies. For his part, Reiner says he sees the real-time movement as an extension of GE's already relentless Six Sigma quality drive, which he helped spread through the company when he was promoted to CIO in 1996. Like vigilant quality controllers, he says, GE will continuously monitor time savings as passionately as it does quality improvements. "The technology is going to keep getting better and will keep wringing out costs," he asserts. So when will GE be fully operating on real time? "It's going to take forever," he says. "Like quality, it's something you are always looking to push further."

But can GE and other organizations change fast enough without risking greater, hidden costs down the road? The experiment so far at GE is unquestionably benefiting the company's push to cut costs, even as the initiative is still being put in place. But it's also flashing some early red and yellow warning lines of its own about the risks of moving toward real-time enterprises. Says CGE&Y's John Parkinson: "Technically what they've done is very impressive, but it may well be a house of cards." Adds Gus Stuart, a professor of game theory and business strategy at Columbia University's Graduate School of Business: "GE and other companies should be very excited about the potential of real time, but there will need to be a whole new cultural adjustment to make it happen.…My guess is that there will be a huge growth in the IT consulting business, because some managers are going to botch this, big time."

Dave Lindorff has written for such publications as The Atlantic Monthly and BusinessWeek.

This article was originally published on 11-11-2002
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