FT.com / Business Life - GE keeps innovation in harness
General Electric is a powerhouse of Global Research, employing 2,600 scientists on a site covering 550 acres with an incredible $500m a year budget. As you would expect from a company of its heritage, innovation is a key component in unlocking this R&D potential for GE. However, this is not a one off activity. Over the years GE have seen that even the greatest of their innovation breakthroughs, such as the light bulb, lasers and non reflective glass for optical lenses, become commoditised products.
“Companies need to keep innovating if they are to keep growing”.
Therefore, GE’s growth has been built upon its capability, sustainability and scalability to successfully innovate and bring new and better products to market. After all, as Mark Little, head of GE global research says “It is easier to sell good things than bad things”.
With the constant pressures from globalization and the emergence of low-cost manufacturing in Asia and elsewhere, other companies, if they are not already doing so, are rapidly coming to the same conclusions as GE and harnessing their innovation potential to drive growth in profits and market share.
Yet how do you keep 2,600 scientists from spending too much time and money perusing intellectually promising projects that maybe too difficult or costly to execute commercially and instead steer them to create workable inventions?
One of the key elements of this success has been GE’s decision to infiltrate there Global Research team with commercially minded business program managers who are given control of their budget, which creates an interesting dynamic within the group to ensure that the money is well spent. This article is an interesting examination, of these business program managers, as one of the key elements for a successful innovation program and is well worth diving into for a deeper read. Other key lessons and best practices from these business program managers include:
- Spread and manage risk
- Avoid overlap
- Communicate realistic expectation of innovations
- Develop clear paths for projects to market
- Be ruthless about failing projects