GE’s CIO on Transitioning to the Digital Age
Many people still think of GE as a classic manufacturing organization, but the 125-year-old startup has a history of strategic evolution and is currently several years into a major transition from an industrial to a digital industrial. I spoke with James Ross, CIO of Global Functions for GE, to learn more about what prompted this initiative, how they’ve taken on the challenge, and what it’s meant for the business.
As the person responsible for managing all corporate functions – HR, payroll, workforce management, digital learning, legal, etc. – for 300,000 employees worldwide, James oversees a portfolio of about 150 different technologies across 17 global product lines. Understandably, transitioning such a large and complex entity into a new way of working is a huge undertaking.
“We started transitioning to digital in a very focused way about six years ago,” James recalls.
“Even after doing ERP implementations, lean, and overhauls of core technologies, we weren’t seeing the increased productivity that we needed. In fact, we started seeing a downward trend in which industrial productivity was declining from 4% to 1% or less.”
The problem, GE discovered, was that there was no platform that allowed for the collection, ingestion, and analysis of all the data across the enterprise. Since that realization six years ago, GE has been working to evolve their business around digital innovation – both internally, and also for customers via the Predix platform, GE’s application development platform for the Industrial Internet, to collect and analyze data from industrial machines.
GE’s Three-prong Plan to Drive Innovation
GE has taken a multi-faceted approach to digital innovation:
Digital & Technology
“The first obvious step is looking at how we leverage technology,” says James. “We want to be able to gather data internally in a way that allows us to drive the right outcomes. A key example of this is how we’ve added sensors to many of our products and manufacturing equipment to understand how we can operate them more efficiently.”
In addition to implementing technologies that support such operational efficiencies, GE is also committed to having the right digital solutions for their customers and employees. There are three primary areas in which they have focused their efforts:
- Cloud Adoption: “Internally, we’re moving more and more to the cloud,” James says. “We’ve talked about trying to exit data centers as much as we can. Our core competency is building the employee experiences that matter. It’s about making our workforce more productive and exploring emerging technologies like artificial intelligence, virtual reality, and machine learning. We are focused on leveraging technology to change the way people work.”
- Asset Performance Management (APM): “On the product side, one area we’re focusing on is APM, a suite of tools that allows an industrial business to get an integrated view of all their assets, all the equipment, and how those assets are running,” says James. “This helps these organizations make the right operational decisions, and – in some cases – even better understand their workforce and whether they are optimized for productivity.”
- Field Services: “We recently acquired a company called ServiceMax to help us drill down on how cloud technologies can help our field service organizations better understand the environments they’re going into,” says James. “These tools help them understand the equipment they’ll be servicing as well as enabling them to record all the actions they’re taking. This has allowed them to be much more efficient. Unplanned downtime has been reduced, and we’re seeing a more cost-effective model for our field service engineers.”
In addition to the digital technologies, GE implemented a major shift in their workspace layouts. When the company was located in Fairfield, CT, the space was broken up into a lot of individual offices, a configuration that wasn’t as fluid as it needed to be to accommodate the level of collaboration GE wanted. The company’s new offices in Boston were redesigned to fit a different way of working.
“We put a lot of focus on how we operate and how the office needed to be laid out in order to optimize collaboration. Now, there are only about five or six offices and most spaces – even for our most senior executives – are part of an open floor seating design. Experience shows us that this approach fosters easier interactions.”
Last, but certainly not least, James acknowledges that it’s critically important to address the company culture. “As we’ve gone through the digital industrial transformation, we’ve put a lot of focus on what the culture needs to look like,” he says. “We’ve spent a lot of time not only with new employees – explaining our vision and mission – but also taking our senior executives through a digital bootcamp that walks them through all our products and shows them what becoming digital really looks like. We even have hands-on interactive elements so they can immerse themselves in the new technologies.”
How the Move to Boston Factors into the Company’s Evolution
Speaking of physical environment and culture, GE’s move to Boston has also played a role in the company’s digital industrial evolution. There were three primary factors that went into the decision:
Access to technology talent and innovation
“The innovation’s absolutely critical – the access to technology and talent along with an ecosystem of other technology companies that would help us continue to develop and move our mission forward,” James says. “We already have a large partnership with MIT, for instance, and have started working with them on their MIT Energy Initiative to develop clean energy solutions such as the energy storage and electric power systems.”
“One of the fun parts of moving here has been how many different elements are combined in terms of the community,” James says. “Our leaders are part of twenty-five different boards across Boston, including some customers like hospitals. In addition, we’re working to influence public policy and partnering with various nonprofits and universities.”
Finally, James notes the importance of the GE Foundation. “We’ve committed $15 million in philanthropic donations to education,” James says. “We’re also doing work with the Boston Public Schools. We want to find the best way to give back to the community and create a strong relationship with Boston.”
Advice for Organizations Undertaking Transformation
When asked if he had any advice to give other organizations that are thinking about undergoing a major transition – whether a digital one or some other evolution – James’ suggestions are all about focus and flexibility.
First, he warns against positioning any substantial transition as a side project. “I’ve talked with peers in other companies, and found that they’ve set their efforts up as a kind of special initiative rather than part of how they think about their company as a whole,” James explains.
“For a transition to be successful, it has to be something that touches everyone and makes each person feel like they’re part of something.”
Once an organization has made that full commitment, James recommends having a really strong understanding of the disruptive forces within your industry. “You need to understand the business models – not just how things operate today, but how they will operate in the future,” James says. “What are the big shifts that are going to happen? For instance, if the taxi industry had looked back, would they have been able to predict that ride-sharing would take off the way it did? Those types of trends exist in every industry, and they’re getting ready to upend a lot of different parts of the companies that we work with every day.”
Finally, an organization needs to be able to act on those disruptive forces – taking proactive steps into the future. “You need to be willing to embrace new ways of working, and understand that automation is just a way to create more focus for higher-value tasks,” James says.
“In many cases, automation won’t eliminate work, it will transform it and even create new work. We need to have the right mindset about it so we can move forward and make our employees even more productive than they are today.”
As does any company taking a leadership role and working to evolve ahead of the curve, GE has a clear vision for where they want to be in five or ten years. “We’ve already done a lot to define ourselves as the digital industrial company of the future, but we believe that in order to fulfill this mission, we need to continue to transform the industries we’re part of,” James says. “We’re focusing on how to we move, power, and cure the world through our products and technologies; and we believe that our industrial platform, Predix, will allow companies to continue to evolve and innovate in creative ways. I see the next five to ten years as a very exciting time during which we’ll see all the industries we’re a part of completely transformed.”
Read this before you create yet another to-do list.
In a perfect world, people make rational decisions and the best idea always wins. But as we all know, things don’t always work out this way.