When you think about internal change—culture, people, leadership development—again, here’s a time where multiple things happened at the same time. We started our digital initiative maybe five or six years ago. We’ve also, as a company—and I don’t think GE’s unique—lived through the financial crisis. And we’re an old company. We live in highly regulated industries. What we found was our culture was too complicated to get the work done the way we needed to get our work done, both in terms of how we were trying to digitize and how we were trying to survive in terms of a more highly regulated world. And just think about our footprint and the complexity of running a global operation: even since I was CEO, GE has gone from 70 percent inside the United States to 70 percent outside the United States.
So what we’ve tried to do inside the company is really just drive what we call a “culture of simplification”: fewer layers, fewer processes, fewer decision points. We’ve adapted the lean tools in what I would call a Silicon Valley approach, what we call “Fast Works.” We’ve embraced some of the Silicon Valley tools in terms of putting everything on the clock, bringing commercial intensity into the company. The way I describe that is, like most big companies, we’re willing to take all kinds of market risk so that we don’t have to take internal risk, right? We try to say, “Look, let’s actually be aggressive in the markets, and let’s count on our own execution to risk reduce inside the company.” And broadly, getting to digitization, we’re democratizing information inside the company; getting IT tools that were contemporary in a mobile setting, and we call these things the culture of simplification.
My notion is we’re in a permanently complex world. And this historical organization chart with lots of processes is a thing of the past. We’ve basically unplugged anything that was annual. The notion is that, in the digital age, sitting down once a year to do anything is weird, it’s just bizarre. So whether it’s doing business reviews or strategic planning, it’s in a much more continuous way. We still give a lot of feedback. We still do a lot of analysis of how you’re performing. But we make it much more contemporary and much more 360-degree. So somebody can get interactions with their boss on a monthly basis or a quarterly basis. And the data you get is being collected by your peers, the people who work for you, in a much more accurate and fluid way.Reference: GE’s Jeff Immelt on digitizing in the industrial space.