Background
A few years ago, I wrote a post about innovation at GE Healthcare. I wrote about how a design engineer was on site when a new MRI system was being installed in a pediatric area of a hospital. The engineer saw how scared the very young patients felt about interacting with the equipment. He started a project and a few years later released a new way to configure the imaging suite to make the patients feel more relaxed and less afraid.
But before I describe some resent GE innovation success, look at this graph from a GE global innovation report. It is the results of surveying executives all over the world and indicates that 40% of executives felt that during the past five years, innovations have had a positive impact on their business’ bottom line. And only 15% of innovations were a total write-off, with nothing being learned. Not bad for such a high risk activity.
Over the past 10 years or so, innovation at GE has concentrated on additive manufacturing (3D printing). Most of their manufacturing divisions were and are working very hard to figure out how to make their new products more reliable (with less parts), lighter (less material for the part), perform better (by optimizing shapes that could not be made any other way), and embedding sensors and communications to monitor performance and anticipate when service would be required.
Here are a few examples of individual business accomplishments.
Innovation at GE Healthcare
Well, the Healthcare business appears to have done it again. This time the innovation is in the area of women’s health. In addition to the kids, another group of patients that are very uncomfortable when being tested are women having a mammogram. And they are old enough that they can, and often do, skip the whole process because of the pain and fear of the results!
A few years ago, a team on GE engineers, many of whom are women, set out to build a new mammography machine the wouldn’t scare people. They wanted to humanize the examination. They wanted to put their patient at the heart of the project. They called it “engineering by women for women.”
The team appears to have followed a process that is very similar to the Outcome Driven Innovation process developed by Strategyn. First, they are women and so have a first-hand understanding of how the process feels. Second, they interviewed over 1200 doctors, technicians, and patients to get a large sample of their issues. And they then did their design thing, trying to correct and eliminate the issues that they knew and heard about.
These pictures compare the original mammography machine (circa 1996) with the current design:.
Original mammography machine circa 1966
Newest GE Mammography machine, circa 2018
The new machine gives the patient some control over the amount of breast compression and other features that significantly reduce the patient’s anxiety.
When screening labs are being constructed or updated, many are taking a lead from the pediatric imaging story and are making the lab a soothing color, not white, and adding calming background music. And the design allows much of the “support structure” of the machine to be hidden behind a wall so as to be less intimidating.
Innovation at GE Aviation
Recently, the world’s largest jet engine made its maiden flight. The engine will be used on the upcoming Boeing 777X. The fan diameter is 134 inches, and is so tall that Shaq O’Neil could stand in the opening with Kobe Bryant sitting on his shoulders!
The engine could be so large because the fan blades are made of advanced carbon fiber composites, which is very light. And they reduced the number of blades from 22 to 16.
GE also 3D-printed the fuel nozzles from very light heat-resistant ceramic composites. This allowed the nozzle to perform better than previous parts because the additive process allows designs that cannot be made by traditional metal cutting techniques. The engine will be up to 10% more fuel efficient than the ones currently powering the 777.
Innovation at GE and their focus on services
There are many stories about Innovation at GE, but I think you get the picture. So enough about products. Let’s talk briefly about innovation in business models and specifically the move to Servitization. If you are not familiar with this term read this post first (from February 2017).
For the last 10 or more years, GE has been focusing on combining products and services into a single saleable package. And now the results are available and in some cases mind-blowing.
This table was created from data in the 2017 GE Annual Report:
Notice that except for the Renewable Energy and Lighting (bulbs) segment, services make up greater than 50% of the total backlog. And for Aviation, the services backlog is $137.7 billion. Not only is service a major component of every order, the services usually is renewed long after the equipment is paid for.
As for the renewal business, they recently entered into an innovative business with a soon to be completed power plant in Ciudad Juarez, Mexico, which may set the way for other future deals. From a GE report:
GE’s Power Services business will provide an “integral services solution” that includes overseeing operations and maintenance (O&M), contractual services and digital support for Norte III over the next 25 years, under agreements valued at more than $330 million.
The arrangement made sense — GE has been operating and maintaining power plants for nearly half a century. Enlisting a company like GE to provide O&M support gives Macquarie peace of mind that industry experts are handling day-to-day operation and any required maintenance at the facility.
GE has begun caring for Norte III before it is even built. A technical crew of advisors, working closely with Techint experts, currently is helping install the GE gas turbines and their generators. Soon the technical O&M team will collaborate with Techint, putting software into place, coordinating environmental health and safety protocols, and boning up on Norte’s equipment.
Summary
So, while Servitization may not help save GE as we know it, it will certainly help the individual businesses survive and prosper in whatever form the GE Board decides is the way forward.
Where does your business stand with the transition from being product focused to services as the shinning light?