Power paying outside consultants millions...to tell everyone what we already know. So how are we covering that cost...more layoffs. Absolutely disgusting...between CAS and outside consultants are tripping over themselves; running redundant plays. Everything being reviewed had been in place years ago and due to the constant organizational changes, lack of proper role transitions and promotions based on everything other than meritocracy this is what you get. We are a broken record...we will again fix processes for a short period of time and then everything will come undone in a year because the root cause will not get fixed... constant organizational churn, lack in knowledge depth (all the best leaving) ...so the wheel keeps turning. For all the cost people are so diligently trying to take out the incompetent Leaders who feel the need to bring in outside consultants and spend millions faster than we can make it up! When was the last time a consultant told you something you didn’t already know. It’s not a question of people not knowing what’s broke and how to fix it; it’s the fact that for some reason when you tell Senior Leaders the same thing the consultants do; nothing happens until there is a pretty power point stating the obvious that they put resources in place to fix it. Yes the power points are alive and well... how many times over the years were we told stop spending so much time on the pretty power points but yet those same Leaders won’t let you get away with a conversation without a presentation wasting hours of time. Get your heads out of where the sun doesn’t shine and stop wasting business hard earned cash on useless consultants and save some jobs...if you don’t know one will be left. If Senior Leadership and Strazik think you can bring in new hires after their missteps and replace the lost knowledge going out the door...good luck-you’re in for a rude awakening.
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GE pays leadership $Millions for their special skills and knowledge. Then these leaders making $Millions hire dumb consultants to tell us how to do something they have never done.
Consultants Can Make A Difference
A timeless lesson on how Consultants can make a difference:
Last week, we took some friends out to a new restaurant, and noticed that the waiter who took our order carried a spoon in his shirt pocket. It seemed a little strange. When the busboy brought our water and utensils, I noticed he also had a spoon in his shirt pocket. Then I looked around saw that all the staff had spoons in their pockets.
When the waiter came back to serve our soup I asked, "Why the spoon?" Well," he explained, "the restaurant's owners hired Kurt Salmon Associates to revamp all our processes. After several months of analysis, they concluded that the spoon is the most frequently dropped utensil. It represents a drop frequency of approximately 3 spoons per table per hour. If our personnel are better prepared, we can reduce the number of trips back to the kitchen and save 15 man-hours per shift."
As luck would have it, I dropped my spoon and he was able to replace it with his spare. "I'll get another spoon next time I go to the kitchen instead of making an extra trip to get it right now." I was impressed.
I also noticed that there was a string hanging out of the waiter's fly. Looking around, I noticed that all the waiters had the same string hanging from their flies. So before he walked off, I asked the waiter, "Excuse me, but can you tell me why you have that string right there?"
"Oh, certainly!" Then he lowered his voice. "Not everyone is so observant. That consulting firm I mentioned also found out that we can save time in the restroom. By tying this string to the tip of you know what, we can pull it out without touching it and eliminate the need to wash our hands, shortening the time spent in the restroom by 76.39%."
"After you get it out, how do you put it back?"
Well," he whispered, "I don't know about the others, but I use the spoon."
Maybe GE can get some of this wisdom with their money
I believe I saw JPM's Stephen Tusa recently say on TV that major layoffs in Power aren't needed, and might be counterproductive. I think he used some sort of sales/headcount number compared to industry norms to justify that.
this is no different than at any other point in GE history. always (over)pay for consultants and scr_w the employees who actually know what they are talking about. you think things will change with Culp? to get to his position he had to play the game and will continue to do so.
@YXOoc9E-mov, if direct labor was $ 1 million per unit when 10,000 units where made, I'd say $100 per unit is less than the round-off error in the calculation of per unit cost. Even if the demand dropped to 6,000 units, the increase to $166.67 would not have enough savings opportunity to outweigh the benefits of letting a single overpaid executive pursue other interests.
When all you have is a hammer, everything looks like a nail. And when the only tool an executive knows how to use is layoffs, everything screams for the need to layoff of direct labor.
The only thing senior management is sure of is that it's not their fault. Just ask them.
@YXOoc9E, what suggestion do you have drive down direct labor cost? If it was $ 1 million per unit when 10,000 units where made and now demand is 6,000 units, 40% of direct labor (hourly/union) has to go. Conversations about how too many leaders are around is a separate topic but even if you want to go there, you'll see SG&A (management) costs have been in a steady decline since 2011. As a percentage of sales, SG&A is down and direct labor is up. That fact screams for the need to layoff of direct labor. Alternately, the same direct headcount could remain with a 40% concession in wages and benefits.
Well written🤙. Thanks.