Imagine It Forward

by Beth Comstock

  Same for inside the store—hundreds of sensor-embedded LEDs throughout that, in addition to providing energy-efficient lighting, are connected to a larger system that allows the store (from the local manager to the enterprise) to know where inventory is, link consumers to available inventory, manage energy usage, track traffic flow in the aisles, and communicate with consumer smartphones for loyalty points and incentives. The store manager may also decide to generate some of his energy with solar panels, and eventually store it on-site.

  Best of all, the reinvention of Lighting as an “internal start-up” would allow us to amplify our new OS throughout GE. My dream was to see thousands of employees bringing entrepreneurial skills to work. Why is this just the domain of Silicon Valley? It was a new twist on GE’s early LED skunk works. Every function needs to be connected to a refounding. It’s a continual act. We could do this.

  We settled on a name for the new Lighting: Current. As in energy. As in what makes light. As in something that was current, now, today. More specifically, it would be “Current, powered by GE.” To show that it was a venture, not a division. Its own world. A proud rocket launching off platform GE, with $1 billion of sales as a rocket booster. We thought it was a future-driving name, with a nod to the past. But some employees were skeptical, even scared, as they hadn’t yet contemplated a connected, energy future coming from the one-hundred-plus-year-old lighting business.

  Now I had to choose a CEO for the business, someone who embodied the emergent, fast, and lean principles of the new GE. That was not going to be simple. What I really wanted to do was to “Hulu” Lighting. I wanted a seasoned entrepreneur with a track record of seeding and launching a new business. I wanted to keep it tethered to Lighting but not constrained by the needs of a company at scale, a legacy company at that.

  “Why can’t Maryrose lead this?” Jeff asked me.

  Maryrose Sylvester was then the CEO of GE Lighting, a skilled operating leader who had grown up in GE. I had watched Maryrose grow her leadership style and impact, from our early days seeding the GE Women’s Network, and by now, I had worked with her directly for about a year since taking over responsibility for Lighting in 2014. She had been a champion in growing the LED business to almost $1 billion of annual revenue, but I didn’t see her as an entrepreneur; I viewed her as a GE operator.

  “One billion dollars in sales! That’s what it takes to be a Silicon Valley unicorn,” Jeff would say anytime I brought up alternate CEO names from outside of GE. “A unicorn. We have a unicorn right here within GE.”

  Jeff was right about Maryrose’s selling capabilities. I had learned in the year we had worked together that she was a commercial zealot. She also had been steadily transforming the business to LEDs for the past five years, had a good command of the details of the business, and was excellent with customers and channel partners. Maryrose would go anywhere, anytime to win a deal.

  Maryrose had a more diverse background than many GE business leaders. She had worked in our semiconductor and industrial automation businesses when they were in the portfolio. She had led a global software team. Yet I questioned whether Maryrose had the entrepreneurial tolerance for ambiguity and iteration or the passion to excite her teams toward a new future. Her style was understated, her methods precise. She led her team well and they liked her, but they hadn’t been tested beyond what they knew. Selling new LEDs to existing channels was a start, but now we were suggesting more change—a new business that would go beyond light fixtures to include solar and energy storage, along with software so that the LEDs could connect to the Internet and host a range of applications from in-store location positioning to energy efficiency. Eventually, Current could become a virtual power provider and help manage electricity flows between business and utilities. To get business on board, Maryrose and the team would now have to call on new decision-makers—CIOs, CFOs, and CEOs—and not with an existing product or a solution but with untested and unproven offers built on energy savings, shared cost savings, and new applications. In many ways, this mirrored GE’s broader challenge with digital.

  Now my challenge was even clearer: not just to launch a start-up from GE’s oldest business but to encourage an established leader and her tactical operating team to be entrepreneurial. This was a living, breathing FastWorks challenge. At scale. Premature or otherwise, this was now mine.

  I broached the idea to her that we were going to separate Current from the consumer business and now she’d be running only the future-proofing business under the Current brand. Her CFO, Bill Lacey, would now be CEO of the old consumer lighting, as a separate division.

  “But Current is small,” she said. “Look, I believe in the vision. I do. But I know how to run the whole business. And that’s what I thought you wanted me to do?”

  “Yes, you are a great operator. But we need to focus,” I explained. “We need to keep the legacy from getting in the way of Current’s future. If we do this well, we’re creating a whole new life and value not just for Lighting, but for GE. How can you focus on growing the new if you’re worried about old factories and whether we win more share at Home Depot?”

  “It’s just that there are many synergies and reasons to keep the lighting businesses all together. I need access to the manufacturing plants and the sales from all the global regions—we share talent and technology. Now we’re funding Current from the consumer business profits.” she said. “All of this works together.”

  Many of our GE business peers measured their standing in the organization by the size of the P&L statement—by how much revenue and especially by how much profit they gave back to the ever-hungrier operating machine. Now Maryrose had a job where there were no profits to fund the future—in other words, a classic start-up play, where losses are immaterial in the face of the land grab, the installation of a customer base. We were to be dependent on corporate funding and short-term financial scrutiny in addition to taking on something that wasn’t proven. This made her nervous.

  It made me nervous, too.

  You see, the stakes were higher for me now as well. In mid-August 2015, Jeff called me to his office right after our usual two-week vacation break. New staff changes happen then—I called this Jeff’s reflective time of the year, because he always came back from vacation with pages of handwritten notes that we had to decipher (he has the worst handwriting), capturing his ideas for projects or areas of focus. And this being August, I went in with my list of the thoughtful things to discuss, knowing that his mind would be particularly open then. (I have finally learned that timing is critical—and often overlooked—in having your ideas understood.) After the usual niceties about vacation, he said something I wasn’t expecting.

  “I’m making you a vice chairman. I’ve taken this to the board, and we’re good to go.”

  “Wow. That’s a big deal,” I said.

  Surprised but acting cool, taking it all in. Sometimes I’d get a heads-up from HR about things being considered for me. But not this time, which was odd because earlier that year I had talked seriously to HR head Susan Peters, saying that I thought it was time for me to leave GE at the end of 2015. I was feeling I had reached the end of the road there, and frankly, I was tired of pushing the change and innovation boulder up an ever steeper incline.

  But it is a big deal, being named a vice chair at GE. It was symbolic in that it represented a capstone to a GE career for me, but also because it symbolized what themes were becoming important to GE. Growth and innovation were being recognized. Marketing—the new kind, the outside in, discovery-minded kind—was being recognized. And I was the first woman to hold the role ever.

  “We need the work you do here. I like what you’re doing with Ventures and making progress with Lighting. Current is a good idea. We have to do more of these. The GE brand is in great shape. FastWorks is important—we need your help more than ever,” Jeff said. “Please help me change the place. Digital industrial and outcome s
elling—we have to make these real. The culture simply has to move faster. I need you to keep pushing.”

  There was an urgency to his voice. It was not the laid-back Jeff I knew. There was still work for me to do. Ever loyal, I was back in. Later that night, I sent Jeff an e-mail, now that things were sinking in: “Thanks for the support. This means a lot to me.” He responded, “Feel good for a minute. And then help us change! Faster. We need this.”

  In October 2015, we launched Current with great fanfare. Our oldest business gave birth to our youngest. Maryrose and the team were energized by the market reaction, and big, new leads were coming in. She agreed to locate Current in Boston—a city we chose because of the entrepreneurial talent. Ground zero was a collaborative worktable in a shared workspace where the core leadership team sat—about a dozen of them, with others remaining in Nela Park, San Ramon, and Schenectady (Solar’s headquarters).

  Sing It

  I believe that symbolic acts matter. Whether you are leading a project, a team, or a company, you need to take visible actions to show you are seriously committed to the cause. One of my favorite examples came from Bill Lacey, the CEO of GE Lighting. He was dealt a tough hand in running the simplified consumer business, yet he managed it, while continuing to fund smart-home technologies and pushing for new growth. He wanted to win the Lowe’s account badly. Not only would it increase revenues but it would cap a so far unsuccessful, twenty-year effort to gain a major presence in their stores. Bill needed everyone in the organization to work toward this goal. So he enlisted the help of Katy Perry. Bill told his colleagues that Katy Perry’s “Fight Song” inspired him to win the deal. So he asked employees to share their favorite fight song, creating a playlist to motivate everyone on the team. Every time someone walked into the building, a new song would play, reminding employees of the goal they were all working toward.

  What’s your fight song?

  Soon after we picked Boston, GE announced it was moving the headquarters out of Connecticut to none other than…Boston. With the act of selling off GE Capital, announced in 2015, Boston represented a fresh start and a visible sign that a new GE was emerging—more open and collaborative, one ready to be part of a vibrant ecosystem of universities and start-ups. For the Current team, it was like your parents announcing they are following you to college.

  But then 2016 would prove to be a tough year. Tough times always come. These are when you are sorry that you announced an idea to great fanfare—you get customers you desperately need, but you also raise expectations.

  We kicked off the year with a team meeting to remind everyone of the vision. We’d had such momentum ending 2015—a GE darling, industry buzz, interest from customers and employees from across GE and the energy sector who wanted to join the Current team. Maryrose took to the front of the room. She was talking fast and softly. Everyone leaned forward to hear her. She was fading away, as if the enormity of what we were trying to do hit her just at that moment. The vision was on mute.

  I spent a lot of time talking to her about owning the vision, telling the story, asking what help she needed.

  Current had very aggressive sales targets—this was GE, and we had set a stretch target of $5 billion in revenue by 2021. Our confidence was high, and perhaps, we were high on it. We projected 60 percent growth based on continued strong sales in LED (they had grown at over 50 percent over the past few years). We expected that we’d close a big deal with J.P. Morgan Chase. Heck, Jaime, our sales leader, was a West Point grad with the confidence and charisma to lead troops into battle and new markets.

  But the targets hadn’t been wishful assumption, and a big part of the sales plan—what we called the “whale strategy”—was to spend our time hunting the megadeals like J.P. Morgan Chase that would give us a huge installed LED base in bank branches, and then upsell them on other capabilities like solar and, ultimately, software and services that gave ongoing revenue. The team had little experience selling these deals and assumed they would close more quickly than the twelve to fifteen months it really takes. At one level, it was an issue of split motivations: we still had the LED machine running full on, bringing in sales through channel partners. And this is where the team kept much of their energies, because it was what they knew. It felt good to see revenue flowing in. Big deals required more strategy, planning, partnership, and patience; they were hard.

  To follow the new OS, we surrounded Maryrose with aides: David Kidder set up her growth board; Aaron Dignan coached her on culture; and we brought in an entrepreneur in residence, Erik Straser, as the master guildsman. He had run several energy start-ups and been a venture capitalist with Sue.

  Despite the help, things started to wobble early on. We were trying to do too much. We still carried some of the “build it big and they will come” mentality—especially for our offering for cities, which in a year had ballooned with hardware feature creep, burning cash that we increasingly didn’t have.

  For the first year of our new life, we projected about a $35 million loss for the business, with additional new revenue of over $200 million. GE Corporate was covering the loss as part of “growth funding”—a mechanism we had put in place to seed Imagination Breakthroughs and other big bets. I think these mechanisms are important to have as a way of seeding possibility with discipline. By the end of the first quarter, the projections proved wrong. Sales had not moved as fast as we had planned—we needed time to build a pipeline and the sales were complicated. We had hired too many salespeople ahead of developing a clear offer, once again scaling prematurely.

  Most worrying, the problems were cultural OS problems, which are the most resistant to change. Here’s the thing: people say they want to behave like a start-up, but the old behaviors often return, especially in moments of stress. Erik, as our resident coach, was a sounding board for Maryrose and a commercial sensei for the sales team. He saw his role as helping the team get to a viable commercial model—getting them from one customer to many. Maryrose brought on board Bruce Stewart, a skilled marketer who came with energy and start-up experience. He brought a relentless drive to segment customers and hone value propositions. He led the test company and scale company approach—first assigning a small team to test and validate new commercial models, and once greenlighted, moving projects to the scale team, which was incentivized to sell and make bigger, faster. But people kept going back to what made them comfortable. Current’s new MO demanded open communication, but many people, when asked about their worries, would say, “I got it.” They never asked for help, never let anyone see them sweat. This phrase “We’ve got this” requires special attention—and a good “BS” detector. If it means “We’re making progress, give us time to figure it out” or “We’ll ask for help when we need it,” then encourage the team to keep going. In my experience, “We’ve got this” can also come laden with arrogance, a way of saying “We don’t need help because we know the answers.” If that is what is meant, watch out.

  Worse, I found out sales was turning down deals because the margins weren’t good enough. “We don’t take anything under 25 percent,” Jaime said, shrugging. He just wasn’t interested in going from selling a thing (money now!) to selling a service (more money over time!).

  Maryrose panicked. She had violated the first rule of GE: never surprise with financials. I had said to her, “Your job is to grab land, as much as you can; we’re measuring you on top line, not profit.” But it was hard for her to adjust, as deeply programmed as she was to deliver. Her DNA kicked in: Her first call was to GE’s CFO, not to me. She was asking for forgiveness. I was frustrated.

  Originally, the agreement was to have limited HQ reviews and instead use our growth board to make big decisions. But behaviors are hard to break, and once we missed our sales forecast, the team was forced into the standard GE operating rhythms for a fully scaled business. This was a bad turn, because we needed to move under the radar and use start-up metrics. T
he beast again was attempting to eat its young.

  Would it even be possible to change GE’s OS? And was I cut out for this? I truly believed I was, but at moments like this, my insecurities come out. Had I taken on a losing proposition? Had I pushed a strategy before its time? Were we destined to fail?

  The calendar gave us a welcomed respite. During the second quarter, the business rebounded and came closer to meeting our financial plan, meaning that some of the urgency wore off. Maryrose was convinced we would have a strong second-half recovery. There were also some signs that offered optimism. But then, the third quarter brought an August break and weeks of lower intensity. Maryrose called me desperately to say that sales had missed by a long shot and that we were going to have a huge loss.

  “We’re another $35 million short. I don’t know how, but the sales just…didn’t happen.”

  It wasn’t a huge number for a company like GE, but it was huge in the fact that it was unexpected. We missed; we didn’t sell what we had committed to. We also had higher-than-planned costs for developing our storage and solar solutions. Our internal credibility was frayed. I spent the weekend alternating between freaking out, beating myself up, and mapping out an action plan. I created a set of new recommendations for Jeff. I had been planning all along to seek an outside investor for Current as a way to validate our model—and with the added benefit of giving us additional funding, of hedging our risk. And I knew Jeff was keen to sell the consumer-lighting unit, so selling it sooner could present other funding options.