Lean Startup at GE
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Mark Little, GE As GE’s Chief Technology Officer and Leader of GE’s nine Global Research Centers, Mark Little embraced the Lean Startup methodology to improve business outcomes. Mark will describe specific examples where he helped the organization use Lean Startup to help drive speed and innovation with cross functional teams across GE.
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Lean Startup at GE
- 1. Imagination at work LEAN STARTUP AT GE Mark Little Chief Technology Officer, GE November 2015 geglobalresearch.com
- 2. GE businesses 50,000+ Technologist s Spending = $5+B/year Aviation $20B Power & Water $28B Energy Management $7B Oil & Gas $15B Transportation $6B Healthcare $18B Appliances & Lighting $8B © 2015 General Electric Company - All rights reserved 2
- 3. GE Global Research THE TECHNOLOGY DEVELOPMENT ARM FOR GE • First U.S. industrial lab • Market-focused R&D • One of the world’s most diversified industrial research organizations • Leading a team of 50,000 world-class engineers 3 © 2015 General Electric Company - All rights reserved
- 4. HQ New York India China Germany California Michigan Brazil Israel Oklahoma 4 Global Research network … always on Global Research Europe Munich, Germany 2X Size + Customer Innovation Center Advanced Manufacturing and Software Technology Center Detroit, MI Welch Technology Center Bangalore, India Global Research Headquarters Niskayuna, NY Software CoE San Ramon, CA 1900 1999 2004 2011 2009 O&G Tech Center Oklahoma City, OK Israel Technology Center Tirat Carmel, Israel 2012 2013 Brazil Technology Center, Customer focused R&D Rio de Janeiro, Brazil 2010 © 2015 General Electric Company - All rights reserved China Technology Center Shanghai, China + 3 Customer Innovation Centers 2000 Saudi Arabia 2015 Saudi Innovation Center Dhahran, Saudi Arabia
- 5. FastWorks Fast speed launch of successful products
- 6. FastWorks is a set of tools, principles and behaviors that will … Get us closer to customers Increase our speed to market Increase chance of success Make it easier to get things done
- 7. © 2015 General Electric Company - All rights reserved FastWorks enables simplification • Requirement confusion • Thinly spread teams • Activity focus 7 Complex Simple • Customer validation • Dedicated teams • Learning focus
- 8. © 2015 General Electric Company - All rights reserved FastWorks NPI … the beginning 8 Series X 2011 2017 Focus on perfection in product specifications Maximum viable product 2012: Met Eric Ries • Lean start up … minimum viable product, leap of faith assumptions and pivot • Highly skeptical leadership team FastWorks results 2012 2013 2017 20182014 2015 2016 App 1 2 3 4 5 6 Highly energized leadership team
- 9. MVP I • Move fast • Use available tech • 6 unit deployment Oil & Gas Multiphase Flowmeter … an evolution “Working with GE on the MPFM has been one of the finest experiences in my career. Up until now no other partner has been so transparent. A class R&D team with great technology and great people that get things done.” Manny Gonzalez R&D Alliance Manager Chevron MVP III • Near 3 Phase • Doppler/Microwave • 400 unit deployment MVP II • Make it work • 2 Phase+ • 50 unit deployment
- 10. © 2015 General Electric Company - All rights reserved Power & Water Heavy Duty Gas Turbine 2012 2019 Develop next generation heavy duty GT with high efficiency and low $/KW Results 2012 2013 20172014 2015 2016 Product 1 Product 2 Original plan Product 4 Product 3 Faster and lower risk approach to drive GE competitiveness Step 1: Pivoted existing GTs to achieve +10% output using minor engineering change Commitments from 2 customers Step 2: Position GE in Hi efficiency space NOW +22% output with additional engineering changes 2.5 years of savings Quick pivots Long NPI Cycle of 7 years to develop new architecture Gas Turbine 4 new GTs established in next 4 years 10
- 11. © 2015 General Electric Company - All rights reserved India Healthcare 11 Results • Selling in weeks … 4 orders in-hand • Fast cycle … new product version in < 6 months Super value interventional product C-Arm Developed list of 31 leaps of faith assumptions 11 MVPs MVP approach Build lab mockup in three weeks … engaged customers Customer value drivers - Faster spin More detailed image More power Initiated as a FastWorks project
- 12. © 2015 General Electric Company - All rights reserved Industrial solutions Molded cased circuit breaker Validate assumptions fast and at low cost • NPI acceleration lab • Faster, better designs through modeling • Simpler, manufacturable designs Previous New 20 parts 6 parts 6064 30 Competitor B FastWorks Competitor A Breaker NPI cycles (months) 60 Pre-Fastworks 7 MVPs and over 20 customer sessions Modeling Simpler design 12
- 13. © 2015 General Electric Company - All rights reserved Advanced X Ray Detector 2014 2019 Develop new cheaper & more versatile X Ray Detector Results 2014 2015 20192016 2017 2018 App 1 App 2 Original plan Application 1: Re-engineered existing product solves significant customer problems Customers save $1MM/day; ready to order on a dummy prototype Application 2: Cheap and rugged, not versatile Pursue new material but pivot to correct market needs 2 years of savings Quick pivots Long NPI Cycle of 5 years to develop new material for detector Focus on significant customer problem Early revenue, faster learning
- 14. © 2015 General Electric Company - All rights reserved Horizontal product Silicon Carbide Power Semiconductor Silicon Carbide Wafer 14 Silicon Carbide Internal Startup GE Store FastWorks Brand R&D Function Novel solution for supply chain... Consortium Focus on early adopter market… Solar Integrated product critical for tech insertion First MW product imminent Revolutionize power electronics
- 15. © 2014 General Electric Company - All rights reserved 15 Scaling “lean startup” across GE © 2015 General Electric Company - All rights reserved NPI teams racing to adopt FastWorks Trained business leaders and their teams Trained ~150 coaches 100s of FastWorks project Growth Boards
- 16. Secure funding, not more money Programs justified and ready to execute Cross-functional alignment Resources … dedicated, pace hiring Culture … accepting risk ... less churn FastWorks … 5 thoughts to go faster
Editor's Notes
- Describe the whole FastWorks process. How each step relates to next around this cycle. Key messages Speed to market = function of speed of learning cycle i.e. how fast you can validate the assumptions Accurate product = function of pivots based on learning Lean concept: Waste = Tasks that do not help validate assumptions Minimize waste
- FastWorks is the way we solve problems and drive business impact through experimentation and iteration. The ideas have been formed into a set of tools, principles and most importantly, behaviors. We need to think and behave with the agility and responsiveness of a startup. We have to remember that FastWorks is truly about getting closer to the customer. FastWorks will help us get in front of our customers as fast as possible, learn as much as we can, and act decisively. In order to increase chance of success we need to learn more from customers directly, relying less on traditional research like focus groups or worse, from our own internal feedback. From an implementation standpoint, we need to think about culture, which is getting people to understand how we can be more entrepreneurial in our everyday work in order to get more things done, to be faster as teams and as decision-makers. To do this, we need to have leadership behaviors that drive speed; and then, apply those tools and behaviors to things like process improvement, NPI, commercial ops and our everyday work. Speed to market: We are hampered by our own inability to get things to market faster. A team from P&W said that it would take 5 years to get a turbine in the marketplace and they were asked to ask what they could do to reduce it by half. By modifying an existing unit, they had equipment ready to go to get an MVP, or minimal viable product, to market in a matter of months. This allowed them to get necessary information from customers quickly in order to inform future iterations of product development.
- The strategy of the company is to invest in technology, go where the growth is, and focus on the customer and simplify the way we do our work. We need a culture that supports these four imperatives and allows us to work faster and simpler driving impact and value to our customers. FastWorks will help us get there.
- SLIDE 3: What FastWorks means to GE Closer to the customer – relationships A learning culture: Gets us smarter faster about applications and technical challenges Speeds MGPP … enables quick movement of technology into adjacencies (offshore, subsea … ) Accelerates revenue generation … earning while we are learning Moves us to think differently about the way we prioritize and fund NPI (more on that later from Lorenzo)