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GE: How an Industrial Leviathan
became a Digital Giant
An interview with
Transform to the power of digital
Beth Comstock
Vice Chair of GE
Beth Comstock
Vice Chair of GE
Beth Comstock
The Journey So Far
What have been the key
milestones in your digital
transformation journey?
We started our journey about five years
ago. We were already picking up a lot
of signals between 2008 and 2011 and
understood that digital disruption was
going to impact the industry in a big
way. We started by incubating digital
expertise via our technology group. We
embedded a software analytics team at
our global research center for example.
It was around 2013 when we decided to
meld the best of our digital capabilities
with the best of our physical capabilities.
Hardware and advanced materials
science have always mattered a great
deal in our business, but we started
focusing on the intersection of the two
and began digitizing the manufacturing
process, not just the things that we
made. The vision started to coalesce
around a digital transformation, from
This is a long journey
for us. I think we are
about a third of the
way in our digital
transformation.
We have a billion dollar
run rate investments so
far into our
digital efforts.
designing to producing to shipping and
in-the-field services. Our biggest impact
today has been on our service business
because you are suddenly selling
everything as a service.
Where is GE now in its journey
towards a digital industrial
company?
This is a long journey for us. I think we
are about a third of the way in our digital
transformation. We built an industrialstrength
cloud to power all of the data
needs that our industries are going to
have. We have really great use cases,
especially in the energy sector and in
transportation.
Can you give us an idea of the
level of investments you are
making in digital across the
business?
We have a billion dollar run rate
investment so far into our digital efforts.
And our goal is get $15 billion in revenue
by 2020.
Can you share some examples
of digital initiatives you have
launched?
A great example is our “Digital Wind
Farm”1, which connects the embedded
sensors and controls in the actual
wind turbine, providing connectivity
across multiple layers. The blades
of the turbine are able to sense the
environment. Using technologies such
as radar and lidar2, they know where
the wind is coming from and motors
shift the pitch of the blade to react to
the wind. So, the whole wind farm is
orchestrating and communicating and
optimizing for that specific environment,
even for microclimates that may be
different within the wind farm. They are
then able to send information about the
cost and the quality of the energy being
generated to the utility company. This
way, the utility can plan to not use other
energy sources, such as coal or gas,
when wind is more efficient. It’s all done
with Predix, our cloud-based platform
for the Industrial Internet, which provides
a digital infrastructure for the wind farm,
enabling collection, visualization and
analysis of unit- and site-level data.
GE’s Predix Platform
– The Cornerstone Of
GE’s Digital Strategy
Predix is very much at the core of
your digital transformation. Can
you explain the concept of Predix
and why you want to become a
platform company?
If you think of the range of industries
that GE is in – energy, transportation,
healthcare – you realize that some of the
basic capabilities are similar. You want
to connect your machines, know how
they are performing and predict failure
and maintenance. That’s the vision.
We needed a platform
that would ingest,
analyze, and predict a
vertiginous volume of
industrial data with the
right kind of security
capability. It hadn’t
really been built at
industrial scale, so it
needed to be.
With Predix, we are
creating a network
effect and an
intelligence effect.
The more people you
have on the platform
contributing, the
smarter the whole
system gets.
The creation of our new
GE startup, Current,
powered by GE, is an
example
of us launching
Greenfield operations.
Beth Comstock
To do that, we needed a platform that
would ingest, analyze, and predict a
vertiginous volume of industrial data
with the right kind of security capability.
It hadn’t really been built at industrial
scale, so it needed to be.
You mentioned technology that’s
industrially scalable. How does
Predix scale up with increasing
data volumes?
We have created the concept of a
“digital twin”, where we simulate in the
cloud every piece of machine we make.
As data comes in, the cloud constantly
runs simulations to make the models
that will one day predict service needs.
They will predict things before they
become catastrophic or before it costs
a lot of money.
We have invested in startups from a
venture perspective and are also using
their technology as a part of our offering.
So, as they grow, we grow.
Why did you decide to open up
your platform?
The more people that can be building
and contributing non-confidential data
to the stack, the better the outcomes
are. This is why we have opened up our
Predix platform to our customers – and
even competitors – to enable them to
write applications on the platform. We
already have 11,000 developers at this
stage.
So you wanted to create a
network effect?
With Predix, we are creating a network
effect and an intelligence effect. The
more people you have on the platform
contributing, the smarter the whole
system gets.
Implementing The
Strategy: Building,
Acquisitions Or
Greenfield
How do you operationalize
GE’s digital strategy? Investing,
Greenfield or acquisitions?
I think we have done a little bit of all.
What we have done especially well
is investing in digital startups that we
can embed in our technical stack. An
example is Maana, which acts like a
search engine for the Industrial Internet.
The creation of our new GE startup,
Current, powered by GE – which
focuses on energy efficiency, energy
management, and on-site power – is
an example of us launching Greenfield
operations. It can be a pretty profound
shift for a 140-year-old business. Our
startup goes to market in a different way.
The measurements for the organization
are different, as is the way we drive our
commercial strategy.
In the past, GE
grew a lot through
acquisitions. Recently,
we have focused on the
organic route. When
something is new, you
have to grow it. You
can’t buy everything.
Beth Comstock
While we have focused less on
acquisitions, we recently announced
the acquisition of Daintree Networks,
which leads the market in smart building
control, sensing, and enterprise IoT
applications. Together, we will make
buildings of all sizes smarter, more
energy efficient, and be the gateway
to new services that create value for
customers both in energy and beyond it.
In the past, GE grew a lot through
acquisitions. Recently, we have focused
on the organic route. When something is
new, you have to grow it. You can’t buy
everything. We invested in technology
and innovation to grow from within – to
grow ourselves.
In the fast-moving digital
environment, how can you build
quickly enough?
Partnerships have helped us advance
our capabilities really rapidly. We
are now working with Cisco, Intel,
Pivotal and many startups. A lot more
partnerships are happening at GE and
it doesn’t always require an ownership
stage.
Partnerships have
helped us advance our
capabilities really
rapidly.
The new formula of
success is that you don’t
do it all yourself – you
have to know what you
have to be uniquely
good at.
You still need to have
a vision of where
you want to go or
understand your
differentiation. But
you have to be much
more adaptable.
We told our employees
– “We are going to hold
you accountable for
being faster”.
With technology evolving so fast, is
it still possible to have a long-term
strategy? Do you still have three- or
five-year strategy plans?
You still need to have a vision of where
you want to go or understand your
differentiation. But you have to be much
more adaptable. Maybe your vision
stays the same, but how you get there
may change faster than you could have
imagined. So, I think the three- to fiveyear
plans are more vision setting. They
are more like scenario planning that tells
you what the world might look like.
Culture
GE is well over a century old. How
did you adapt GE’s culture to the
digital world?
We had to get leaner, more agile and
react faster. We told our employees –
“We are going to hold you accountable
The new formula of success is that
you don’t do it all yourself – you have
to know what you have to be uniquely
good at. We may partner with some
companies helping us do some of the
simulation and machine learning. These
can be things that are not necessarily
core to our capabilities but which are
important for the stack.
We launched FastWorks, our lean
startup method, which is all about
launching something in a minimally
viable way. The key principle is that
you only fund what you need to get
to the next stage of development. It’s
like having our business leaders act
like venture capitalists – funding things
earlier and faster, killing things quicker.
How do you encourage people
to experiment and accept a very
iterative process?
We did a massive overhaul of GE’s
incentive structure to better reflect
what we are trying to do. We are also
changing how we fund projects –
implementing this seed/ launch/ growth
stage gate funding. Business units in the
past might have said, “I made $5 million
in five years.” Now, we would have a
series of iterative questions instead.
For example, “What can you do with
$50,000 in five weeks to validate that
this is even a need in the marketplace?”
And “What can you do with $150,000 in
three months to validate that we even
have the technology that’s going to be
required?”
We have not figured it all out but that’s
the transformation that’s happening
real-time here.
for being faster. You can try something.
It doesn’t have to be perfect every
time.” Of course, this does not apply
to everything that we do – we want a
perfect flight for a jet engine. But for
some of the other things, perfection is
not required.
Beth Comstock
Industrial Leviathan to Digital Giant
2011
when GE started its digital
transformation
(source: https://www.ge.com/digital/sites/default/files/predix-platform-brief-ge-digital.pdf)
-Beth Comstock
GE’s DIGITAL JOURNEY in NUMBERS
year old company
140
We are about a third of the way
in our digital transformation
1 billion USD run rate
investments so far into
digital efforts
Objective of
15 billion USD
in digital revenue by 2020
11,000 developers
already writing
applications on Predix
50 million data
elements of industrial
assets secured and
monitored everyday
Greenfield
GE startup “Current,
powered by GE”,
focusing on energy
efficiency
Acquisitions
Daintree Networks,
smart building
control/ enterprise
IoT
amongst others
Investing Organic Growth
MAANA
Current,
powered by GE
Daintree
Networks
Pivotal
Microsoft
Oracle
Intel
in digital startups – Cisco
Maana, a search
engine for the
Industrial Internet
Partnerships
Beth Comstock
We invested in
technology and
innovation to grow
from within
GE’S DIGITAL STRATEGY
Beth Comstock
What is the culture you would like
for GE? How would you define it?
I think the company has to be more
collaborative, more open and react
even faster. We want to instill a culture
of permanent iteration – a culture
obsessed with constant improvement; a
culture of perseverance.
We did a massive
overhaul of GE’s
incentive structure to
better reflect what we
are trying to do.
The company has to
be more collaborative,
more open and react
even faster.
Just get started – don’t
over-analyze things.
We have Chief Digital
Officers (CDOs) for
each line of business
and they are all part of
the centralized digital
unit.
Does the move of GE’s HQ to
Boston play a role in this change
of culture?
Yes, I think it’s a great manifestation of our
new culture and the acknowledgement
that we are a much more distributed
company. We have turned our
headquarters into centers of expertise
that are connected to the outside
world. The role of our headquarters
is now more about bringing in new
models from the outside and finding
ways to adapt and translate them for
our business units. Boston is also a city
where there is a lot of Industrial Internet
capability development going on.
Governance
You created GE Digital. What was
the rationale behind creating this
new unit?
We needed to get to scale fast. You
can’t have five different businesses
building five different technology stacks
and clouds. It does not make sense.
We centralized the digital capabilities
until we felt confident we had the heft
we need while at the same time creating
that connectivity to the business unit
and the market. So, it’s a tension. It’s
neither central nor distributed, and you
are constantly toggling back and forth.
Is there a dual reporting structure?
We have Chief Digital Officers (CDOs)
for each line of business and they are all
part of the centralized digital unit. They
report in to our head of digital and their
business units. We need to have that
dual oversight to make sure the business
needs are represented, but also the
digital needs are not underwhelmed.
Our CDOs have revenue numbers and
productivity numbers. Those roll up to
the business leaders’ P&L. So, they
have accountability in both places.
They’ve got to get it built, and they have
to make sure it gets rolled in a way that
the customer finds value.
The Future
How do you see GE evolving in the
next ten to twenty years?
We will still be selling hardware. You
can’t fly a plane without an engine. You
can’t create electricity without some
kind of electricity power generation.
These industries will continue to exist.
But more and more of our revenue will
be coming from new service models,
from “as a service” and not just from the
pure hardware.
Can you give us some examples of
these new service models?
Let me give you an example of a new
service we are incubating – inspection
done by drones. Drones surveying oil
rigs in the sea and wind farms. There
will be new applications, new kinds
of mash-up of the hardware and the
software. But GE will continue to remain
in its core industries, perhaps looking at
being more of a system partner than just
a machine partner.
What would you recommend to
companies on how to handle their
shift to digital?
Just get started – don’t over-analyze
things. Pick an area to get smart. The
more you do, the smarter you get. I also
think partnering with others who have
the expertise is the fastest way to get
there.
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Vice Chair of GE
Beth Comstock is the first female vice chair of GE. She leads the organization’s Business
Innovations unit, which seeks to accelerate growth from new service models. Prior
to her current role, Beth served as GE’s chief marketing and commercial officer, and
before that was President of Integrated Media at NBC Universal, where she oversaw
the company’s digital efforts, including early development of hulu.com, Peacock Equity,
and acquiring ivillage.com.
GE is a highly diverse business and a venerable 140-year-old organization that
occupies a significant place in the US’ corporate history. How did this corporate giant
take such giant strides in its digital transformation to position itself as one of the top ten
software companies globally by 2020? Capgemini Consulting spoke to Beth Comstock
to understand more about GE’s strategy for shifting from industrial leviathan to digital
giant. Incubating state-of-the-art technology, investments in startups, and strategic
partnerships are some of the ingredients GE has used to propel its digital transformation.
Beth Comstock
Contacts: Didier Bonnet, didier.bonnet@capgemini.com, Jerome Buvat, jerome.buvat@capgemini.com
Beth Comstock