The New York Times had an intriguing story while I was on vacation about General Electric, where CEO Jeffrey Immelt is spearheading a kind of mindset reset that is designed to make the company more relevant and responsive to the marketplace.
The "eureka moment" came, the story says, when Immelt was speaking to GE scientists about new jet engines the company was building that were "laden with sensors to generate a trove of data from every flight." The fact was that the data could actually be more valuable to GE than the engines ... but the problem was that GE had no infrastructure capability to use it.
Immelt realized that the company needed to develop that sort of software expertise to go along with its heavy industry capabilities ... and "needed to think of its competitors as Amazon and IBM," and not just the other companies building jet engines and medical imaging equipment.
The result was the opening of a software center in San Ramon, California, where one of the most important projects "is to build a computer operating system, but on an industrial scale — a Microsoft Windows or Google Android for factories and industrial equipment. The project is central to G.E.’s drive to become what Mr. Immelt says will be a 'top 10 software company' by 2020."
The story goes on: "Many industries see digital threats, of course. Yet the scope of the challenge is magnified at G.E., a 124-year-old company and the nation’s largest manufacturer, with more than 300,000 employees worldwide. Employees companywide have been making pilgrimages to San Ramon for technology briefings, but also to soak in the culture. Their marching orders are to try to adapt the digital wizardry and hurry-up habits of Silicon Valley to G.E.’s world of industrial manufacturing."
You can read the entire story here.
The "eureka moment" came, the story says, when Immelt was speaking to GE scientists about new jet engines the company was building that were "laden with sensors to generate a trove of data from every flight." The fact was that the data could actually be more valuable to GE than the engines ... but the problem was that GE had no infrastructure capability to use it.
Immelt realized that the company needed to develop that sort of software expertise to go along with its heavy industry capabilities ... and "needed to think of its competitors as Amazon and IBM," and not just the other companies building jet engines and medical imaging equipment.
The result was the opening of a software center in San Ramon, California, where one of the most important projects "is to build a computer operating system, but on an industrial scale — a Microsoft Windows or Google Android for factories and industrial equipment. The project is central to G.E.’s drive to become what Mr. Immelt says will be a 'top 10 software company' by 2020."
The story goes on: "Many industries see digital threats, of course. Yet the scope of the challenge is magnified at G.E., a 124-year-old company and the nation’s largest manufacturer, with more than 300,000 employees worldwide. Employees companywide have been making pilgrimages to San Ramon for technology briefings, but also to soak in the culture. Their marching orders are to try to adapt the digital wizardry and hurry-up habits of Silicon Valley to G.E.’s world of industrial manufacturing."
You can read the entire story here.
- KC's View:
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It isn't really an apples-to-apples comparison, but I think that what GE is trying to do should have a lot of resonance for traditional retailers and suppliers. After all, GE is a company that, even as it was investing in software development, decided also to shed many of the ancillary businesses that it felt turned into a strategic drag on the company's attention.
I love the idea that GE is defining its competition differently and more broadly than it used to ... that is a critical leap that most companies have to make in order to be competitive in the current climate.
