The Lean Startup,

Bloomberg Businessweek (North America) - - Focus On / Mba -

By then, GE had de­vel­oped an early ver­sion of Predix, an op­er­at­ing sys­tem like Win­dows or An­droid but for the In­dus­trial In­ter­net. The com­pany de­vel­oped ap­pli­ca­tions for Predix en­abling it to in­gest and an­a­lyze vast amounts of data from sen­sor-equipped ma­chines much like Ama­zon.com, Face­book, and Google do with in­for­ma­tion gen­er­ated by their hu­man cus­tomers. Im­melt wanted to speed Predix’s de­vel­op­ment and use it on GE’S own equip­ment. That meant the en­tire com­pany had to em­brace the new op­er­at­ing sys­tem, even the power divi­sion, which usu­ally took years to de­sign tur­bines. There didn’t seem to be much need to rush out new mod­els; GE’S power cus­tomers typ­i­cally buy steam- or gas- pow­ered tur­bines and use them for three decades.

The more Im­melt watched what was hap­pen­ing in Sil­i­con Val­ley, the more he be­came con­vinced GE needed a cul­tural rev­o­lu­tion. He sought as­sis­tance from Eric Ries, a tech en­tre­pre­neur and au­thor of a book that es­pouses the im­por­tance of re­leas­ing early ver­sions of prod­ucts, get­ting cus­tomer feed­back, then “piv­ot­ing” or chang­ing them if nec­es­sary to im­prove them. In 2012, GE asked Ries to speak to Im­melt and some of his top ex­ec­u­tives at the Ossin­ing train­ing cen­ter.

Ries was so ner­vous that he wore a suit. When he ar­rived at the train­ing cen­ter, he says he felt like he was en­ter­ing an al­ter­na­tive uni­verse. The day be­fore, he’d been in Wash­ing­ton vis­it­ing mem­bers of the Obama ad­min­is­tra­tion. Yet when he men­tioned the White House with the GE peo­ple, they thought he was talk­ing about the build­ing on cam­pus where the bar used to be. “I’m a startup guy from San Fran­cisco,” Ries says. “I was just like, ‘What on earth is hap­pen­ing here?’ ” Ries was ex­pect­ing Im­melt to be a brusque, Jack Welch-like char­ac­ter. Then the CEO showed up in jeans and kid­ded him about be­ing over­dressed. “‘I thought you were from Sil­i­con Val­ley,’ ” Im­melt told him. “‘What are you do­ing in a suit?’ ” Ries was charmed.

Af­ter Ries gave his pre­sen­ta­tion to the group, he opened the floor to ques­tions. There was an awk­ward si­lence. “Jeff turns around, and he names one of his vice pres­i­dents, and he says, ‘How come you’re not al­ready do­ing this?’ ” Ries re­mem­bers. “The guy was like, ‘Um, mum­ble-mum­ble-mum­ble.’ All of a sud­den, there were a lot of ques­tions in the room. It was like, ‘Mes­sage re­ceived. Jeff thinks there’s some­thing here.’ ”

That af­ter­noon, Ries started giv­ing work­shops for ex­ec­u­tives. He later helped GE tai­lor its own ver­sion of his meth­ods, which the com­pany calls Fast­works. He says Im­melt wanted change, telling him: “‘I’m tired of hear­ing five-year plans.’ ” GE has since handed out thou­sands of copies of The Lean Startup and has trained tens of thou­sands of em­ploy­ees in the process. Ev­ery­one in up­per man­age­ment seems to use Sil­i­con Val­ley- com­pli­ant vo­cab­u­lary, par­tic­u­larly the word “pivot.” “We en­cour­age peo­ple to try things, pivot, try them again,” Im­melt says. “It’s a bet­ter way to run the place than cen­tral­ized com­mand and

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