Simultaneously, we developed a series of ad campaigns to explain the benefits of industrial data and our role in it.
The moment that put us in the center of the conversation—a breakthrough storycraft moment that seeded our Industrial Internet identity with the public—came a little later, with a nerdy kid named Owen. Bespectacled Owen starred in a series of GE ads about a college grad who has to break the news to his friends that he isn’t going to work for his buddy’s cool app company, which makes playful GIFs, but for GE. “I’m going to transform the world,” he says, as his friend interrupts with a GIF of a cat costumed with fruit: “I can do casaba melons!” In a second ad, Owen’s father waxes proud that his son will be manufacturing at GE, and passes on “Grandpappy’s” sledgehammer. “But I’ll be writing the code that will allow those machines to share information,” Owen says, to which his father answers, “Pick up the hammer. I bet you can’t pick it up,” a line that became a small sensation.
Those ads fundamentally changed GE’s perception. We had reached our goal of being recognized as the science and engineering nerd, proudly laughing at ourselves, winning mindshare, and changing the world. Within a month of airing the commercials, visits to GE’s online recruitment site jumped 66 percent.
GE would go on to hire thousands of coders and data analysts, including a horde of people who gave up high-tech jobs at Google, Apple, and Amazon because they believed in our mission and were excited about the industrial scale of data and its power in addressing the world’s problems.
The digital and physical worlds were converging, even if we didn’t know exactly how it would all turn out. In the coming years, the Internet of Things is going to put fifty billion machines online, each shipping off a continuous stream of data. Our machines are telling us about their inner lives and how they can make our own lives better.
The Industrial Internet story continues to evolve, as digital technologies such as wearable devices are increasingly monitoring and interacting with the physical world.
For the first time in history, intelligence is spreading not only from person to person—but from human to machine, and back again. Jet engines, for example, will be outfitted with more sensors to gather data on the environments through which they fly. We’ll be able to fix engines before they break and extend their useful life. If an average airline with one hundred 777 aircraft extends its engines’ time on wing by just 1 percent, it saves approximately $100 million over the lifetime of the fleet.
In the end, data, machine sensing, and enhanced human understanding will fuel a virtual cycle of productivity: gather-analyze-adjust. And this new, mashed-up operating system is going to fundamentally change how we work and live.
Challenges
CONSIDER THE UNEXPECTED
The next time a result that isn’t supposed to be there pops up on a report, don’t dismiss it. Take a close look at it. It might be the first bit of evidence, the first drop of rain in a coming storm you need to weather—or the first sign of a trend you can take advantage of. Management guru Peter Drucker identified “unexpected occurrences” as one of the major drivers of innovation. When someone says, “That is an outlier. Don’t pay attention to it,” this is your chance to ask, “What if it’s not? How can we see if there is something here?”
ERASABLE ZEN
I find a whiteboard to be an essential tool for real-time collaboration. I also keep a stack of blank, white paper at my desk and in conference rooms, along with a full jar of colored markers (I travel with a smaller set). When I’m in a discussion, I’ll map out the conversation in a series of illustrations or key phrases. I find keeping these pages as a record of my free associations helpful when I synthesize the points to share later.
INCORPORATE STORYTELLING INTO YOUR DAY
I once bought an expensive basket of berries despite the fact that they were twice the price of the others. The proprietor told me that a young Amish girl had just picked the berries that morning. I imagined a sweet, hardworking girl in the morning sun tenderly picking the fruit and then gingerly placing each berry into the basket. I was sold. A good story sells—always has and always will. That is its power. Perhaps good stories are the only things that ever sell—with the great product or experience required to make the story stick.
THE STORYTELLING CHALLENGE
Take a set of routine work activities, and weave a tale around them that infuses insight, humor, collaboration, failure, and success.
Come up with stories about a person on your plane, train, subway, or bus. What is his story? Where is he going and why? Can you tell his story in a sentence? What about the people who work on and in support of the bus or plane?
Do the same after a meeting. Do it for a colleague or a competitor or an important customer. Share it with a colleague. Can they top it?
Try ending every meeting with a story summing up the project at hand. Can you use the story in selling the idea to clients or management?
Turn story into an ongoing team challenge. Put it on a whiteboard or collaborative digital space. Encourage teams to challenge one another with humor, with impact, with valor. Offer gold stars to the most concise story.
Legend has it that Ernest Hemingway won a bet over whether or not he could create a compelling six-word story with this: “For sale: baby shoes. Never worn.”
What’s your story today?
SECTION V
Creating a New OS
CHAPTER 11
OPENING UP
New Power Trumps Old
Open is the ethos of the digital era. Easy access to ideas and information—and the informality, immediacy, and autonomy that creates—has instigated a shift from hierarchy to networks, from centralized bureaucracies to decentralized platforms, where sharing and transparency are the standards. From around 2007 onward, all this openness began to speak a language that those in GE could understand: growth, revenues, and profits that scale exponentially. It was unprecedented. Apple, Alibaba, Amazon, Facebook, Google were embracing this new open, boundary-less reality to orchestrate people and resources in entirely new ways, rapidly scaling at low cost by enabling a self-governing ecosystem of buyers and sellers and developers and even competitors to share information, perform transactions, and create value. It was unprecedented.
The nature of these open economic exchanges—the relationships they created, the business models around which they were built—was entirely new. And it introduced a level of messy complexity that I knew would terrify those within GE. “Who’s in charge?” we’d ask. “How will we protect our secrets? How will we know who’s working on what, when?”
GE’s questions were borne out of a culture and processes built for an industrial age, when a premium was placed on productivity, certainty, and top-down control. To GE, the hypercollaborative endeavors of this new networked age came across, then, as free-spirit dot-com insanity. GE and the best of corporate America—think of them as Old Power—had always won by developing proprietary knowledge and then ferociously guarding that knowledge as a valuable asset.
In the past, partnerships with GE, like much of the corporate world, went something like this: do it my way. The goal was always to get 51 percent ownership interest in any joint venture. Someone had to be in charge. The idea of working collaboratively with other businesses and individuals in order to increase returns for everyone was highly suspect. Old Power worked like cash. There was only so much, and you tried to hoard it for yourself.
In the digital age, power functions quite differently. The problems we need to solve (the environment, health care, access to technology) are increasingly too complicated for any single organization—even one as big as GE—to go it alone. As authors Jeremy Heimans and Henry Timms wrote, “New power is open, participatory and peer driven. Like water or electricity, it is most forceful when it surges.”
The dynamic of Old Power meeti
ng New Power was on the top of my mind as I sat on stage in January 2013 at the beginning of a panel at GE’s annual Global Leadership Meeting in Boca Raton. New Power players were on stage with me, and they weren’t a very “GE” group: a confident boyish man, dressed all in black and barely into his twenties, named Ben Kaufman; a perpetually upbeat man named David Kidder, just flown in from the Bahamas and completely underdressed because his luggage had been lost, but still wearing his signature blue Buddy Holly glasses; and Phin Barnes, an approachable guy who, with khakis and a polo shirt, was the most “GE normal” of the three, save for his fluorescent-orange sneakers.
Facing us was a sea of people raised on Old Power: a seven-hundred-strong audience of GE execs, a corps of mostly men in golf shirts. It was a delightful powder keg, this combination of established gatekeepers with my ragtag crew of underdressed foreigners, because each inherently did not value the other. My merry lunatics thought the Six Sigma posse was a group of dinosaurs, while the execs who made GE purr didn’t value the network power the three misfits represented. They couldn’t fathom the one million inventors Ben Kaufman had brought together on his virtual innovation platform, Quirky; nor the community of hugely successful entrepreneurs who had provided the wisdom David had just published in his book The Startup Playbook; nor the VC world that stood with Phin as a partner at First Round Capital.
Old Power. New Power. The challenge was not to reject one for the other but to blend new and old, combining more openness and transparency with the kind of leadership and structured mechanisms that create action and accountability. The goal was equal fluency in both. I would come to call people who became “bilingual” emergent leaders, and such “bilingual” businesses adaptive organizations. It would take some time, and a dose of heartbreak, before I understood exactly what that meant.
I looked into the light at the familiar execs before me. They didn’t know the surprise my friends on stage had in store.
I had met David earlier in my career, when we had had lunch at the TED conference. He was running a media technology start-up called Clickable and had published a bestselling series of Intellectual Devotional books, and our conversations that year and going forward were just total creator energy. He told me he felt so passionately obliged to share what he and others knew about seeding businesses that he had decided to write The Startup Playbook, in which he asked the world’s best entrepreneurs two questions: First, What are your selection criteria for picking great ideas? And second—and this one really spoke to me in the context of a big company—What do you do in the first five years so that those ideas don’t die? I was so excited, I just blurted out, “I need this knowledge in GE.”
Ben was something else entirely.
Ben is incredibly infectious, a great salesperson full of energy. There was something so appealing about his excitement, even when he bragged, “Yeah, I did that in two days.” Ben was one of the few people I had ever met who seemed to have a purpose he was trying to deliver on in the world, something that mattered more to him than money. When he would give his impassioned speech about innovation and improving the world with ideas, you could tell he meant it. When someone’s authentic, people can just smell it.
The basis of his crowdsourced invention company, Quirky, was that its community of small-time inventors submitted ideas, voted on them, and the winners were turned into products by Quirky’s industrial designers and marketers. It epitomized the openness and ecosystem mentality—the “open innovation”—that I wanted inside GE.
In the days after we first met, a year before, Ben just bombarded GE with ideas—Quirky had meticulously aggregated thousands of ideas from its community, including hundreds that related to dishwashers and refrigerators. So not long after, I sent him out to the Appliances division in Louisville, Kentucky. Around that time, Jeff had declared that Appliances was GE’s lab for new manufacturing methods.
For Ben’s tour of Appliances Park, we paired him with the head of product, a traditional manufacturing exec named Brett. Brett was a good GE guy, talented at getting products out the door, but he and Ben were not a good fit.
“We’ve got to show you the coolest new thing. We’re going to have a sideways hinge on the oven door—something we’ve been testing for over a year now. We should have it in production sometime next year,” Brett told Ben.
Ben’s response, cocky and rapid-fire as always, was, “Why would it take that long to test? And now it’s going to take almost another year to go into production? I don’t get it.”
Brett replied that it would take thirty-six months, and the plant had been optimized to ship ovens that fit neatly in traditional oven boxes. “If you can innovate inside that 24x46-inch box, I’m all yours,” he said. “But don’t give me anything else. We have constraints, and it takes time. That’s the way you do it at scale.”
Ben, who developed products from idea to shelf in twenty-eight days, lost it. “That’s innovation? That’s lame,” he said. “Come on. You’re GE. I’m embarrassed for you.”
To start off the Boca panel, Phin spoke eloquently about the need for investors such as GE to start with early-stage funding as part of their venture capital (VC) model. He might as well have been speaking Martian.
Then I turned to David.
“So, David, if you could ask our leaders one question,” I said, “what would it be?”
David smiled and squinted, like a parachutist at the plane door.
“Well, the question I’d ask is, ‘Jeff, how many $50 million companies did GE launch last year?’ I bet the answer is zero. If that’s true, you should be terrified. How is that possible if you have 300,000 people and billions in the bank? How come you’re not using GE as a platform to embed and launch start-ups on a regular basis?”
The room went dead silent as I imagined their collective fury at me for bringing David there. I had told him to be fearless, but I was expecting some limits. “Oh well,” I told myself, “this is how you seed change.”
“Why don’t you tell us how you really feel, David?” I joked, to lessen the tension.
After we had had a thoughtful chat about the importance of innovating inside the organization—and learning to become creators, not just operators—it was Ben’s turn. I had told him what I wanted to discuss, so when I nodded to him, he smiled his cockiest grin.
“One of the great pluses of tapping into a community of innovators is speed,” I said. “More heads, more ideas, more innovation. But that’s hard at scale. So, Ben, let’s talk about that: You visited Appliances Park recently. Give me your impression.”
“Appliances is innovating, all right. How about those new hinges that will be ready to ship in three years on the same ovens in the same boxes! Sorry, but there’s nothing innovative about that,” Ben said.
There was a surprised group inhalation from the crowd.
“You might not fear Quirky now, but be afraid,” Ben said. “If you think that is innovation—‘New hinges in 2016!’—I’m going to eventually beat you. Why can’t you do a hinge now? Hell, why can’t you do a new smart oven in a new box a year from now? The whole situation screams opportunity.”
We were the last panel of the morning, and after Ben’s edgy appearance, we moved to lunch.
“Oh, I hope I didn’t offend people,” Ben said to me as we unhooked our microphones.
“No, Ben, it was great. Mission accomplished.”
As we were walking through the crowd, the head of Appliances, Chip Blankenship, pulled me aside. He was not happy. “That was really rude, totally inappropriate. That little smart-ass doesn’t know what he’s talking about,” he told me, face flushed, well within earshot of Ben. “What was your goal in bringing him here? He doesn’t know anything about how to make appliances. Have you seen the stuff he puts out? A five-year-old could make that stuff.”
At the same time, there were people in Appliances who instantly loved Ben. One was Kevin
Nolan, the CTO, who found me to say, “You know, I like the way that guy thinks; we need more of that.”
One of the lessons of that panel was that provocateurs like Ben and David serve as a way to filter who’s in from who’s not. When pressed like that, people have to choose a side.
The tension continued into the evening. I had placed Ben next to Jeff Immelt at dinner, because I knew Ben would not shy from planting new ideas in Jeff’s head.
Ben did not disappoint. Over appetizers, Ben starting filling Jeff’s ear about his big plans: “I’m going to launch bigger, more complex products. You look at this stuff today, it’s plastic, simple gadgets, but tomorrow it’ll be dishwashers. And eventually MRI machines. Get on board, Jeff, or get left behind!”
As bombastic as Ben was, Jeff liked his full dose of the guy: “I just wanted to squeeze his cheeks,” Jeff told me afterward, charmed by his boyish pluck. Ben’s just immensely passionate, and Jeff was predisposed to listen.
Later, as the event was winding down, Jeff got on stage to say that David’s question about $50 million businesses was one of the most important questions he had heard in Boca. A month later, he wrote to all GE shareholders to mention the two most important books he had read in the last year—one was David’s The Startup Playbook (the other was The Lean Startup, as I’ll talk about later).
The seeds of change were planted.
When David Kidder shouted his $50 million business query, it forced us to reconcile something very basic—and very scary: Why was new growth still so elusive at GE, a company overloaded with talent, money, expertise, international reach, and scalable leverage? And Ben Kaufman’s mockery of our new oven doors made us question our basic standards for innovation: How could the size of an appliance box inhibit new ideas?
We—all of us: GE, the corporate world, the government—were slow, organized into strict hierarchies and silos, and so beset with complicated rules and minimal feedback loops that everybody inside was largely disconnected from everyone outside. There was something in the way we were organized that inherently limited our agility to respond to our rapidly evolving environment. That limited our ability to adapt.
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