Abstract Today's business world is changing faster and faster. Most industries have actually become buyers' markets. Customer demand is not necessarily a specific product or service, but more likely to provide a solution to achieve economic benefits. Therefore, General Electric (General...
Today's business world is changing faster and faster, and most industries have actually become buyers' markets. Customer demand is not necessarily a specific product or service, but more likely to provide a solution to achieve economic benefits. Therefore, the starting point for General Electric (GE) innovation is always focused on the market and customers. As early as the beginning of the 20th century, GE began trading with China, and all GE business units are currently operating in China. GE's development in China is a process of constant change, and it is constantly exploring and seeking new models and methods. Fifteen years ago, at the time, 70% of GE’s sales were in the United States and other developed countries, and the share of emerging developing countries was relatively small. So many US basic innovations were directly converted into products and then directly put into the market. It is called source innovation, innovation in the United States and then global. About seven or eight years ago, the entire emerging market was rapidly emerging. GE began to consider how to put advanced technology platforms into emerging developing countries to develop products for local needs. So we have a reverse innovation model, that is, in emerging countries. The starting point for innovation is then pushed back to the world. Later, on the basis of reverse innovation, we have created a new model - collaborative innovation. The biggest difference from reverse innovation is that collaborative innovation is the integration of customers into the innovation process, allowing customers to participate in our innovation.
In the past few years, we have seen a big change in GE. At least the GE China team has changed: what we thought about selling products before, what more customers are asking now? Is our product innovation able to meet the needs of our customers? Because any good innovation must be customer-oriented, market-oriented, business development needs to be closely linked to customer growth, only when customers make money, companies can make money.
Driven from the outside
From an innovation perspective, whether it is source innovation, reverse innovation, or collaborative innovation, GE innovation is essentially a model, and our driving force for innovation remains the same: it is driven by the outside world, driven by market and customer demand. .
Take GE's medical business as an example. There are actually two medical markets in China, one is high-end and the other is grassroots. For high-end hospitals, its demand is no different from that of large hospitals in the United States and Europe. It is the most advanced technology. These technologies can be used anywhere in the world, whether developed in the US, Japan or China. So for the high-end market, we can use the source of innovative ways.
However, there are also primary health care markets in China, such as township health centers or community health centers. The functions they undertake and the talent skills they need are very different from those in the United States. From county people's hospitals, county Chinese medicine hospitals, county women and children hospitals, to large community health centers and township health centers, there are six or seven different market segments in China's primary health care market. For primary care, we can't have only one product design. Product innovation can't be used, but it needs reverse innovation. For example, GE's ultrasound products, China was originally a recipient, but now GE's global economic ultrasound research and development center is in China, and about 65% to 70% of ultrasonic products are developed, produced and manufactured in Wuxi, and then exported to the world. .
In addition, if you want GE's products to reflect the most modern technology and meet the needs of primary care, it is easy enough to use, so customers must participate in innovation.
In response to the urgent need for the digital upgrade of China's primary medical institutions and the soft power and productivity of grassroots physicians, GE released the digital X-ray imaging system iDR in April 2015. This product is an important solution since GE launched the collaborative innovation model globally. . The research and development process of iDR has changed the traditional one-way mode of re-development and light interaction. Using “please come in†and “go out†to introduce customers and partners into the whole process of R&D and innovation from concept design, user experience to product evaluation. Specifically, iDR's non-invasive digital upgrades, remote diagnostics, and multi-machine sharing are the fruits of customer engagement.
GE's product innovation cycle is generally long, like an aircraft engine may take 10 years, a heavy-duty gas turbine may take seven or eight years, and medical equipment may be two to three years. How to ensure that in the process, the products we developed will finally meet the needs of customers? This is a major challenge to traditional R&D and production. The way we respond is to constantly explore innovative models to ensure sustainable innovation and to maintain the vibrancy of innovation through constant “trial and errorâ€.
Sustainable investment
For GE, innovation is a system in which many elements are constantly changing, but some will remain the same.
First, innovation requires continuous investment.
Whether the economic environment is good or bad, or in what cycle, this principle is GE unchanged. Every year, we will invest 7% to 8% of our global operating income. These R&D projects include long-term basic R&D. It may take 10 years to break through, and there is no economic benefit in the short term. At the same time, there is still a part of research and development that is an innovation in products. An important aspect of GE's innovation system is the long-term, sustainable investment of innovation itself, at the group level, in every business unit, and in different regions.
Secondly, we are now building a decision-making economic product research and development center in China.
What is full decision making? After the establishment of this economical full-line product research and development center in China, all decisions are made in China, so it is very clear at the decision-making level, but the product and future commercialization process is oriented to the global market. For example, GE's current research and development of nuclear magnetic resonance MR, CT and ultrasound are all done in China. China's research and development of these products is not only for the Chinese market, but also for the global market.
Since all decisions on product development are in China, the most important thing in this process is talent. Although the process and organizational structure are clear and the responsibilities are clear, the ultimate problem lies in the improvement of the ability of localized talents. If the decision-making power is placed here, the ability of local talents can't keep up. In 2014, we built our first nuclear magnetic resonance plant in Tianjin, a very important localization measure for China as a global centre of excellence. For the cultivation of talents, we have adopted two methods. One is to send Chinese talents to the experienced factories and R&D centers in the United States. At the same time, we will also send experienced foreign experts to work in China. For example, the director of the Tianjin plant is an expert with 25 years of experience in manufacturing nuclear magnetic magnets in the United States. He can go to China to do the factory and teach a group of people. Of course, talent development also requires continuous investment.
Once again, GE will have a forward-looking talent plan.
The so-called forward-looking plan means that we will do talent assessment every year, but the annual talent assessment is not only based on this year's research, but also what to do next year. We are more to see the development of China's medical market after 5 years, GE How should we lay out in China, how many talents does this layout require, how many engineers do you need, and what type of engineers do you need? These engineers, where do we go to recruit today? How to train him? How is this path achieved? Therefore, this forward-looking talent assessment program has played a very important role in the process of talent cultivation and innovation.
Constantly "seeking change" culture
GE is a very large company, we need to make sure that no matter which country or business unit in the world, everyone thinks this company is GE. Therefore, the process management of large enterprises cannot have too many human factors. However, such process management and process management also have some drawbacks, such as how to deal with unexpected situations, or the situation of some emerging markets, and how to break through existing technologies and barriers in process management to achieve innovation. Therefore, GE is very changeable, and may not feel it outside, but people inside GE will feel that our changes are still very fast. The key to innovation is the drive of cultural values, and the culture of change is a very important part of GE culture. We believe that if the world is changing, we will not change, we will be eliminated. Such a culture of change, as long as it penetrates into the DNA of the employee, can see the problem and propose it, and then we can make some systematic changes to the existing system and process. Therefore, in 2014, GE's new values ​​are called GE beliefs. There are great changes in GE's beliefs. One of them is called "Deliver result in an uncertain world".
Specifically, GE will use some management practices to help us achieve "changes." More classic is the "work-out" management model, the work-out model originated from the era of Jack Welch. What is the concept of work-out? For example, we found a problem, everyone will brainstorm and lock all the people in different functional departments in one room. Everyone will discuss this issue. If you don't find a solution on the day, you can't leave, so it's called work-out. In fact, this model encourages employees to discover some problems in their work and then mobilize their enthusiasm. Work-out is not only a problem of discovery, but also how to solve the problem. Some of these problems may be more specific, some may be larger problems, or even involve some process or system changes.
In addition, we have a model called “fast workâ€, which means quick project, quick test, fast market acquisition, and customer feedback. In fact, this is our global pilot model. Now, GE has about five to six projects in China to re-establish R&D projects through fast work. Before the fast work, we have to do new research and development, and the budget is set by the year. After the project is established at the beginning of the year, there will be no change in the year. But fast work is not like this. It is a bit like "wind throwing". For example, the project team thinks this is a good idea. After reporting the budget and project approval, the next question is what you can come up in the next 3 months. The result. After 3 months, we will see if we have achieved the expected results, but we do not guarantee that we will continue to invest. This kind of fast work is more suitable for a new market, because there are many unknowns that need to be constantly tried. If you give a year or two of funds, the risk is very big for the project and the company itself. We have been constantly internal. Try the fast work mode.
In the GE innovation system, the culture of change has played a very positive role. There are two ways to manifest it. One is through subtle influences, and the other is to apply in practice through modes like work-out and fast work. .
For any global company, China is a market that cannot be ignored. The status and role of multinational companies in China in the future depends not only on the strategic needs of the two parties, but also on the "market-for-technology" and "cooperative global innovation". The new development track. We believe that under the guidance of customers and market-driven, continuous investment and continuous change, GE will develop a more strategic cooperation with Chinese companies through innovation, and achieve a win-win situation for the development of China's industry and GE's global business growth.
Duan Xiaoyu | Oral Duan is a senior vice president of GE Global and president of GE Greater China.
Li Jian | Interview with Li Yuan | Editor Li Jian is the chief editor of the Chinese version of Harvard Business Review.
This article is abridged. The original text is in the Chinese version of Harvard Business Review, September 2015, "The Three Key Principles of GE Innovation."
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