Throughout General Electric’s one hundred and thirty year history they have remained true to the wise words of Thomas Edison “I find out what the world needs, then I proceed to invent it”.
At the recent Chief Strategy Officer summit in New York, Alex Tepper, Global Director of Innovation, gave us an insight into the ways in which GE is changing the way it innovates.
For a company with entrenched ideals and traditions, any attempt to spread innovation in a new form is admirable and the fact that GE has done this with considerable success shows how adaptable they are as a company.
Arguably, the words of Thomas Edison ring truer now than they ever have, as GE has shifted from a process of Technology led innovarion to Market Led Innovation.
Before this change, GE had been fixated on bringing the latest, most innovative products to the market with little thought for the market they were involved in. This had been a successful strategy for them, a fully established member of the Fortune 500; they undoubtedly have some of the most advanced technology in the world at their fingertips.
Up until their recent shake up, innovation manifested itself in small niche groups wherein experts would share concepts and implement ideas accordingly, a very closed environment that paid little attention to the wider, market-led picture. Now, Alex and his team, work with both internal and external parties to guarantee that GE is aware of any converging trends within the service arena that could have the potential to disrupt new business models.
As a widespread philosophy, GE is now highly focussed on delivering exactly what the customer wants. Despite sounding somewhat obvious, for a highly evolved technological giant, this underlying notion can be forgotten. At the centre of this customer-focussed approach, Alex’s team are putting significant emphasis on identifying what the big thrusts in the next five years are going to be.
At the conference, Alex showed us a diagram that demonstrated how valuable business model and platform innovation is when compared to product performance innovation. Outside of GE, this is quite visible for Apple, especially within the iPhone market where the ecosystem in which the iPhone operates in generates more revenue that the actual product itself, and this realisation was perhaps the catalyst for GE’s new outlook on innovation.
Big Data, has been on everyone’s minds recently and its value to GE is clear. As mentioned before, GE is keen to improve upon the services they provide that go along with the products they outreach. The millions of machines that GE operates are being covered with a Big Data layer that allows them to perform predictive analysis on important machines such as aircraft engines and MRI scanning machines.
If we take the first example, the use of Big Data in aviation will alert engineers as and when aircraft engines are soon to have functional problems. Having this foresight will allow engines to be fixed more readily and consequently contribute to the cutting of airline delays.
Financially, the use of Big Data across GE operations has been estimated to save them an astronomical amount of money, well into the billion-dollar mark over the next 15 years. To give you an idea of the figures involved, within Aviation alone, $30 billion dollars has been touted as the savings mark.
Alex and his team at GE have come up with a six point plan that outlines their methods for incorporating new business models into their current operations and at the forefront of this dossier is their determination to explore and empower divergent thinkers. Through experimentation and a number of forces affecting the internet, such as phenomena like the Internet of Things, GE has an unrelenting desire to reshape the way they go about innovating.