Focusing on software, big data, GE is a game changer in global scale. Such strategic move requires a change in in GE’s mindset & culture. Consequently, GE cannot develop in the way a traditional company does. In Jeff’s words, the company is a “boring” with average growth. Instead, GE need to grow like a startup, with founders’s mentality, and airm for disruption with high growth. GE has leveraged that spirit through open innovation lean startup methodology.
With full support from GE’s senior leaders, GE has been doing very well in promoting innovative open manner. One of is is the philosophy of Predix. GE created an open platform third-party to contribute with applications, creating a sustainable ecosystem around GE. In countries where GE is present, Predix platform were also introduced to the community, especially the start-up community. In Vietnam, GE has various projects in different fields. In particular, in the field of information technology, FPT Software is the global partner of GE Predix; FPT has also become a regional partner of GE Digital.
This thinking is reflected in open programs to attract people to contribute ideas. Besides opening R&D centers around the world, GE has organized many competitions such as “Imagination Breakthrough”, “Idea Jams”. As for Imagination breakthrough, GE’s senior leaders must submit at least three projects a year, these projects will be approved and reviewed by a “council of growth”. The project should contribute to GE at least $ 100 million incremental growth absolute value; help GE to expand globally, acquire more customers, expand to new business lines.
Apart from internal resources, GE also get helps from community outside the company such as as GrabCAD- hub for digital manufacturing, Quirky (crowdsourcing platform for ideas), or Kaggle, the platform for data-science-prediction contests. Typical competions are: Ecomagination-contest that startups present to help GE accelerate technology development of products and services in the smart grid; other competitions in the field of health, energy, etc. Through this method, internal as well as external knowledge is leveraged.
Mindset of a startup is also reflected when Jeff Immelt imposed policy that fit into digital transformation. GE removed ranking system under Jack Welch (10% of the lowest ranking employees is about to be laid off) to make way for new one in which each employee get feedback from management more frequently, and regular professional training are provided. Jeff also wants every millennial that he hires to learn to code and insist on making GE a “learning organization. This helps GE to go fast and more nimble the 4th industrial revolution.
Apart from open innovation, GE tracks market changes frequently and get updates from clients by applying lean startup principles by Eric Ries, who is famous in Silicon Valley for his Lean-Startup book. The principle has much influence on startup community so that Gartner forecasts in 2021, more than 50% of companies will apply the lean startup method. Because of the importance of this philosophy, Jeff Immelt personally invited Eric Ries to lead the internal project named Fastworks in 2012. This philosophy helps companies to be closer to customers, improve go-to-market speed, and make products cycle go faster through quick feedbacks and validations from customer.
Fastworks is executed seriously: all senior managers are asked to read the book. The coaching staff is also thinking about risk, always learning, asking questions. The annual review meeting is replaced by meetings regularly. Jeff also built a co-working space to booste creativity.
|The basic process of lean startup:
Fastworks had achieved positive outcomes: more than 500 projects to be implemented, more than 500 trainers, and reaching to thousands of employees, dozens growth board consists of members who are senior leaders who will judge the pitch deck, provide funding approval for the projects that will be carried out within 90-day sprint. Fastworks boosts product effectiveness, job satisfaction (especially Millenial generation). Fastworks projects will foster experiments on the MVP (Minimum Viable Product), which helps accelerate the process of testing the hypotheses and tuning products rapidly. Specifically, in the GE energy division, MVP was created simply as a customer data file before developing into fulfilled product. This method was also used in Amazon and called “Working Backwards” – customers have access to the documents of sale, PR press before using products. Other projects in the fields of health, energy are also encouraged to listen to customer feedback. Product development teams and other functional groups will meet directly suppliers, customers … to understand demand from them.
Openness, lean startup principles contributed to a cultural shift in GE: customer oriented, nimble, makingquick decisions like a startup. It is summed up in the “GE beliefs”
- Customers determine our success,
- Stay lean to go fast,
- Learn and adapt to win
- Empower and inspire each other
- Deliver results in an uncertain world.
In a nutshell, like the slogan “Imagination at work”, what GE has achieved is remarkable and seems unreal: to transform into one of the pioneering companies in software, analytics in digital transformation. Betting on the “Industrial Internet”, GE has made initial positive results so far, but also face many challenges. However, determination and devotation from 333,000 people from GE will undoubtedly make GE’s dream feasible in 4th industrial revolutions.
Hoang Nam Le – FPT HO
Part 1: Striving for change amid digital transformation era