What is under the innovation bonnet at GE?

There does seem an awful lot going on in GE around innovation on what we can observe from the outside looking in. Of course, you would expect this in an organization the size of GE employing 300,000 people across 100 countries and generating $150 billion dollars in revenue.

In Jeffrey Immelts (Chair and CEO) own words “the toughest years of my life were 2008 to 2009”.To drop 31 billion dollars in revenue in two years is tough to manage through, and to see net earnings drop by nearly $6 billion dollars in this period to where it is today, of $11.6 billion dollars, must have been very hard.
GE seems though on a path of recovery after these very tough years. Is innovation leading that recovery? It is hard to really tell from the outside, trying to read behind the hype as you can’t see so much under that innovation bonnet as you would ideally like. It needs greater transparency and ease of clarity, well certainly for me.

We see much activity outside-in but not enough of what is going on ‘inside’

Clearly, the ‘flagship’ of innovation, publicity-wise, has been the imagination theme for GE, with two stated growth pillars. These are open innovation activities for the outside –in. Let me summarize these:

The Ecomagination was GE’s open challenge commitment to imagine and build innovative solutions that solve today’s environmental challenges and benefit customers and society at large.

There has been two ‘biggies’ in challenges thathave opened up as a call to action from the outside of GE with the promise of  the winner achieving a commercial relationship with GE and the “bait’ of having funds of $200 million as a capital pledge within this area to award.

The two challenges so far have been “Powering the Grid” and presently “Powering your Home”.

The other open challenge is healthymagination. This is again an external idea challenge focusing on three critical criteria: lowering costs, touching more people and improving quality with the aim of providing  100 new innovations by 2015.

Healthymagination is an investment by GE of $6 billion over six years to develop innovations that measurably improve quality, access and cost by up to 15% with a focus on lower-cost technology, more IT, expanding access, and consumer-driven health. There seem to be more winners in
this one.

These tell me that the innovation ideas are flowing into the organization an clearly swirling around being explored, evaluated and worked upon. I worry over the level of disappointment by the many that don’t get to the reward stage.

How sustainable is this approach?

Certainly it is fuelling much to encourage more of these challenges but with a real need to increasingly establishing pathways for multiple winners either in commercial relationships with GE or directed to others to commercialise if GE decide not to.

There must be some brilliant ideas that can’t simply fit within the ‘appetite’ of GE’s quest for innovations on a large scale, likely to be at least offering the potential of $1 billion in annual sales.

Researching to understand innovation in the world

We also can see GE has been growing in its understanding of innovation in the outside world with GE releasing their first-of-its-kind “Global Innovation Barometer” at the end of January 2011. It is focusing on identifying the changing landscape for innovation in the 21^st
century.

This report (http://bit.ly/dPyT0j) follows a previous one that came out in July 2010 that was an European survey, again sponsored by GE, (http://slidesha.re/ecqMfl) on the current barriers and the current state of innovation policies within the EU.

These tell me they are actively curious about the world of innovation.

The questions for me though are far more about the inside workings of GE for innovation?

The global research centers for GE (www.geglobalresearch.com) provide some solid indicators of what research is being conducted. Research has been doubled in recent years and GE spends $4.4 billion on this area. By the way this sum is getting close to the magical figure of 3% of the revenue that the EU wants each country in the EU to commit to innovation research to maintain and progress.

GE employees 3,000 technologists and they are promoting their Engineers and Scientists as the modern-day “Edisons” and feature a different person each day to show who they are, and what they are working upon. Nice touch I feel, to get them to form as an innovation research community with a real face.

Corralling from the top the best and brightest

I also gather at the top they have a Corporate approach to corralling the top 100 big ideas as protected and guide these through the GE innovation pipeline, providing they keep hurdling the different ‘stage gates’ required to make progress through the system and the ones that don’t make it through the next gate get moved out the coral and others come in to inject fresh innovation ‘big growth blood stock’.

All these tell me that on innovation they indicate the huge strides GE are making for an organization to open up and make innovation as part of ‘coursing’ through the GE blood. Or does it?

GE has opened up; they are certainly ‘open’ for external ideas (providing they are big enough to survive within GE) but what really is under the GE innovation bonnet within its culture to innovate? What makes the innovation activity tick, to promote it, sustain it, instil it in every person thinking, working for GE?

So has transformation arrived or where are they on their innovation journey actually?

This is my difficulty to fully understand. Apart from the usual “innovation is a constant journey” stuff, I find the GE story is not so open for all to see on its journey point from what I can see. I’d love that to change to understand and value. We read governance reports, we get enthralled in big projects, we see the end result in new innovations but has the inside really changed or just added the outside-in?

There is a real pressing need for GE I can only assume it is grappling with. The fact the sums involved in often these ‘winner takes all’ imagination competitions must only give a limited ‘lift’ to GE more in the judging, evaluating and assessing of external ideas.

This intensity of activities has the danger that it is only a short term effect on building an internal culture for innovation unless the benefits can be ‘touched and felt’ throughout the organization, not just simply read about, blogged with pride and interest.

The rules of innovation are changing at GE or are they?

Beth Comstock (SVP & CMO) has mentioned in recent interviews “the rules of innovation are changing”. She was talking far more admittedly about what GE have been learning through their market research and in these big engagements with the outside world. I am sure she is bringing that learning into the organization.

She also offers two other themes that resonated with me:“Doing well by doing good” and “Makes good in people’s lives”. Again these were more in the external context of where GE is heading. I would suggest this is equally where the inside should be going as well, making their lives feel good by given the chance to make their personal contribution to building a sustaining culture of  innovation across GE.

For me, innovation should always have a social result, as it is first and foremost, a people engagement activity.It is not just a bottom-line result, and I would feel running a challenge internally that uses those two themes might give such a personal identification and sense of engagement and significantly advance the adoption of innovation as part of the everyday job.

How about an internal imagination challenge on a similar scale to the others?

GE needs to translate this external engagement within perhaps a matching inside engagement. Something as highly visible and as big in its challenge: to transform the culture of GE to a lasting innovating one.
Perhaps an inner-imagination set of challenges, to embed a greater innovation culture within GE.

In other words, they spend a similar appropriate sum of money internally but not for one ‘big’ idea but for the thousands of small ideas resident in the employee’s minds that effect their everyday work and then allow them the time to pull down the resources to translate them, wherever they reside, not just in the research lab, but across all 300,000 people working for GE. Let innovation cascade throughout the organization.

Most would compare equally with the existing  healthymagination goals of reduce costs, increase access (to innovation), improve engagement and quality, and most importantly opening up minds, sparking conversations and exploring all the possibilities that innovation touches within an organization.

I quote from a recent article “the term innovation now acts as the proxy for strategic renewal and market disruption- what we really need is to uncloak it and recognise the breadth of change enterprises face” ( www.innovationmanagement.se for the source article http://bit.ly/hyTNVh).

They always say the biggest challenge lies within, not just a reliance on simply bringing in the outside-in perspective, it can deflect from the potential that is within and also that can go more inside-out.

Innovation is certainly changing and what it means, and how we are going to manage it going forward. GE needs a new inner culture to innovate far more, to manage greater growth ambitions across a complex array of business sectors tackling substantial societal problems, and to achieve this I’d like to see more openness under their innovation bonnet-

GE need to have a fully visible commitment to changing the culture so it is made up of many innovators across the whole organization, not just selected parts of it. Now that is a big imagination challenge

The post Going behind the outside-in of imagination at GE. first appeared on Building Your Innovation & Ecosystem Intelligence.

GE released their first-of-its-kind “Global Innovation Barometer” at the end of January 2011. It is focusing on identifying the changing landscape for innovation in the 21^st century. It suggests innovation will be a catalyst for improving multiple areas of citizens’ lives in the next ten years.

In many ways, it paints a very optimistic future for innovation. Innovation, the survey predicts, will create jobs, improve lives, address more human needs, find better ways to collaborate and learn, and simply create good in people’s lives with the promise of prosperity.

I wonder a little differently: “are we not placing too bigger a burden on innovations’ shoulders?”
This report (http://bit.ly/dPyT0j ) follows a previous one that came out in July 2010 that was a European survey, again sponsored by GE, (http://slidesha.re/ecqMfl ) on the current barriers and the current state of innovation policies within the EU, just prior to the release of the much-awaited EU Innovation Union document (http://bit.ly/bEDLNh)  outlining their strategy for achieving the 2020 goals.

The EU survey is not what I’m commenting upon here, although I might come back to it in a subsequent blog as it supports significant change to the EU’s approach to innovation.

The burdens of expectations placed on innovation seemingly are growing
Reading both reports commissioned by GE there is a heavyweight of expectations to come from innovation. The  global survey has many significant aspirations and to list but a few:

• The belief that innovation is (truly) global and the main lever for a more competitive national economy
• It is the nature and value of innovation that is changing
• Innovation will be centred more on prosperous and competitive activities
• Innovation will be the best way to create jobs in countries
• Innovation and competitiveness are inextricably linked through growth and jobs
• Innovation will increasingly integrate more social and human dimensions
• Innovation will address societal needs, green the world and improve lives (health, energy, education)

The new model is the power of “I” for impact.

Innovation will be totally different from how we have innovated in the past according to this report. Some of the key aspects given are:

• It will need to be more localized to service-specific markets
• It will focus on individuals and SMEs who will be more or equally innovative as the large organizations
• It will call for integrated solutions that bring value to society as a whole.
• It will require more impactful innovation, focused on human needs more than just profits
• It will require incorporating partnerships between several players to bring success

The perceived barriers to the Innovation Optimism Paradox.

The survey looked at country perceptions. In this survey, only 12 countries were surveyed and the optimism continuum shows real differences in the belief and trust placed in the country’s ability of innovation to transform their society and improve citizens’ lives. These clusters of optimists, traditionalists and pessimists are driven by the country’s relationship to innovation changes, sources and purpose.

I found this (attempted) comparison on this optimism continuum interesting and useful. Stuck in the traditionalists are five of the twelve countries. These were the USA, Israel, Australia, Sweden & Germany. These are all in among the present-day leading innovative countries. The others within the survey optimists were Saudi Arabia, UAE, Brazil and India and in the pessimists were China, South Korea and Japan.

There are many thoughts that possibly can open up with this sort of designation but let me stay within the confines of this report. Traditionalists by the survey’s definitions were mainly “driven by hard science, serve global markets’ products and services needs and not specifically to serve social needs. These want to protect what they have more than adhere to a new model, their needs are very specific and diverse”. This definition does sound very US & EU in its reality today.

My real concerns from this GE sponsored Global Innovation Barometer.

There is a lot of ‘open’ interpretation from this global survey. GE has taken the optimistic route, perhaps for self-justification, perhaps because it needs to manage its own changes towards managing innovation successfully. That has a potential great takeaway for the future direction for GE if they can grasp it, although it will be a bold step.

The comments made in the press release at the time by Beth Comstock, chief marketing officer and senior vice president, GE holds promise: “the results clearly demonstrate that globally our priorities are shifting from innovations that simply make money to innovations that also create good in people’s lives.” And “fosters creativity, and emphasizes solutions that meet local needs.

I feel GE are dipping their toe in these innovation waters more and more, it is getting nearer in time for them to make the real deep, all committing plunge if they believe in their own research.

I reacted in some different ways, certainly optimistic about where innovation fits within the future thinking on creating jobs, improving society and addressing human needs. It has the potential to do this but…

The pessimist side also kicked in. The survey was based on interviews with 1,000 senior business executives, conducted by telephone across 12 countries.

All respondents are directly involved in their company’s innovation processes and are VP and above with 30% of those surveyed C-suite. Is this truly representative of the world of reality surrounding innovation? Don’t this group have a vested interest to promote innovation in these ways?

The fear of groupthink needs to be resolved in future surveys.

These are people working within their own innovation bubbles, wanting to relate what they are doing with the bigger societal issues we need to face but is there a touch of “groupthink” here?

Wikipedia defines ‘groupthink’ as a type of thought within a deeply cohesive in-group whose members try to minimize conflict and reach consensus without critically testing, analyzing, and evaluating ideas. It is a second potential negative consequence of group cohesion.

Individual creativity, uniqueness, and independent thinking are lost in the pursuit of group cohesiveness, as are the advantages of reasonable balance in thought that might normally be obtained, in this case by more open discussion and not (semi) structured questions asked over the telephone .

The survey should counterbalance those from ‘within’ with those that are still ‘without’ to clarify innovations’ impact.

You can get a ‘warm and fuzzy secure feeling’ also

I welcome the report, don’t get me wrong, it helps point us in new directions because of the changing need that innovation can help deliver but these will not on just innovations own. It has many positive pointers but it does not address the gaps, the report itself reveals.

Perhaps this will come from future surveys, I think they should be less on a barometer of the innovation climate but more on assessing the changes identified within this survey. It should point out more ways to shift this innovation barometer.

The survey brings out perceptions that need resolving. Some of these for example are:

The positive perceptions show the general public is not so convinced of the value innovation can bring to their day-to-day lives

In the balanced perceptions there are three lags that need improving: the (lack of) speed at which innovative products are adequately coming to market, trade regulations are still a limit (or constraint) to commercial success and thirdly, private investors are not supportive of companies that need funds to innovate.

The most negative perceptions are that government support is not as efficiently organized and coordinated, governments should allocate more share of their total budgets to support innovative companies and thirdly, that Public authorities do not support SMEs and large companies that want to innovate.

In all of these there is possibly nothing new but as they are focused on the ‘known’s’, the current drivers and present deterrents, and not the ‘unknowns’ or less articulated needs, for making societal innovation happen as GE wants to paint the picture of moving to a new innovation paradigm.

Lastly, within these concerns, I would have liked to see from this survey more on possible solutions to the future bigger innovation picture.  I come back to the Traditionalists, here lies a real roadblock.

This is where innovation is truly stuck. “They want to protect what they have more than adhere to a new model, their needs are specific and diverse” Here lies the big challenge to overcome.

Expectations come with changing parameters

I hope this ‘first-of-a-kind report” can really build on this initial work. It ‘hints’ at a new innovation landscape that we need to take forward. It indicates to GE and others who care to read this, that globally our priorities are shifting from innovations that simply make money to innovations that also create well in people’s lives and meet their local needs.

I welcome GE’s exploration and hope for its future innovation barometers it can set out more of the enablers to make this journey to the new landscape reality.

None of us needs a warm and fuzzy understanding only; we need clarity so we can all move towards this new innovation dawn, with some fresh light and power from more of GE’s help and investigations.

GE have the global innovation promise in their hands.

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