in Innovation

GE dares to dream of the future

In my tangible futures presentation last week, I repeated a statement I’ve written here, that sometime during the second half of the 20th century, American companies forgot how to dream. I’m happy to contradict that statement with a clear example: GE.

In Growth as a Process, Jeffrey Immelt reveals the process that led to their Ecomagination initiative. Not only is it not greenwashing or a flimsy vision statement, it grew out of their strategic planning process and has metrics that benefit the company and the environment, while bravely looking several years into the future.

The whole article is full of valuable insights, but this section is worth quoting:

The very economics [of scarcity], by the way, that drove you to read the demand for organic growth. You’re trying to make tailwind out of the headwind.

Exactly right. So we plugged that input from S-1 [GE’s strategic planning process] into the Commercial Council, which studied it for nine months. We met with people from NGOs, government offices, and other relevant organizations. We brought a lot of assets together, including our knowledge of public policy and how it gets influenced. Once we had done our homework, we launched ecomagination with 17 products we could point to. As always, we were metric driven. We said that our $10 billion of revenue from products tapping renewable energy sources like the sun and wind had to go to $20 billion in five years. The $750 million we were spending on R&D for clean technologies had to go to a billion and a half. Our own greenhouse gas emissions had to come down by 1% by 2012.


Has there been any push back from your customers, some of whom I can imagine would rather stick to their carbon-burning ways?

There were plenty of guys on our energy team who hated this in the beginning because half of their customers were saying they hated it. Never mind that half of the customers loved it. We just kept talking: “Here’s where we’re going. Here’s why we think it’s good for both of us. And it’s going to come someday anyhow, so let’s get ahead of it.” We hosted what we call a dreaming session in the summer of 2004 with the 30 biggest utilities. Some of the top players in the industry—CEOs like Jim Rogers and David Rutledge—came to Crotonville and heard Jeff Sachs from Columbia talk about global warming. There were other speakers who were pretty compelling on different topics, and breakout sessions. I floated the idea of doing something on public policy on greenhouse gases, and we had a good debate.

In part, ecomagination helped to show the organization that we can do these things. The company has been great in terms of management practice but more reluctant when it comes to what I would call business innovation. Ecomagination was one way to show the organization that it’s OK to stick your neck out and even to make customers a little bit uncomfortable.

  1. I am encountering more evidence of discussion than actual changes in business practice (perhaps with the GE exception). A friend of mine, who was instrumental in the creation of Apple QuickTime VR, is out in the business world now, seeking opportunity. He is encountering more “talk” than genuine interest in taking the plunge into major innovation.

    It does feel inevitable, to me, that
    “dream” innovation will happen in the corporate world. But, I wonder if two things need to be addressed first:

    1) Collaboration — Clearly, innovation means that technologies will “fuse” to create innovative products. That means no one discipline holds sway over design. It will require a new order of collaboration: Egos dropped, genuine respect for each other’s disciplines, and a transparent collaborative process. Fiefdoms of the past will have to be abandoned. A winning design is the win of the entire team, not just one designer or department. Otherwise, design will be fraught with turf war battles, delaying the product release.

    Victor, I was glad to hear that you were promoting the collaborative process. But, I think it will take a large paradigm shift. I recently read an article titled “Other Groups Encroaching on Design”, posted in a major professional organization — not a collaborative mindset.

    2) Credibility — I sense a very jaded public, especially when it comes to advertising. Standard and Poor’s 2005 report on advertising clearly delineates, in numbers, the success of Google ad words compared to other “in-your-face” forms of advertising. Users are gaining control of media (even TV). They no longer have to be subjected to media that is annoying or unusable. If innovation is to be sold to the public, marketing and advertising will have to change its aggressive tactics. If innovative products are to “stick” with the public, they will also have to be usable.

  2. Thanks Jim. Of course, a clear, compelling vision of where a company wants to go (a tangible future, in this case) is only one element in any change initiative, particularly one seeking innovation.

    I agree whole-heartedly with the need for collaboration, and as a greater imperative than this is usually cited. It’s one thing for a designer and an ethnographer to collaborate to create a better product. We’re reaching a point where more disparate disciplines need to work together, like finance and design, to invent and evaluate whole new kinds of opportunities. Disciplines need to merge more to realize new benefits, but no one person can stretch enough to represent them.

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