GE Lean and FastWorks
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GE has been applying lean startup principles across its global operations to increase innovation speed and reduce product development cycles. It spends $5 billion annually on R&D through its 50,000-person global research network. In 2012, GE invited Eric Ries to teach its lean startup methodology called FastWorks. FastWorks focuses projects on short learning cycles, customer validation, and dedicated cross-functional teams. This has helped GE release new products in 6 months rather than 6 years by conducting numerous MVP tests to refine offerings. Examples include a gas turbine developed through 4 MVPs in 2 years and a medical C-arm created via 11 MVPs in under 6 months. GE also established training, resources, and cultural changes to fully implement FastWorks
GE Lean and FastWorks
- 2. About GE est 1892 co- founder Thomas Edison Fortune 500 # 4 Employees > 300k Revenu > $100B
- 3. Global Research Center founded in 1900 “Innovation in great technology is the heart of a great industrial company” GE reverse innovation: innovation in developing countries instead of developed high concurent Historical approach to innovations
- 4. Innovations today Spending $5B/year on innovation Global Research Center employs 50k engineers Placing R&D centers in different counties and cultures to grab the best people Inviting Eric Ries and lean startup principles (in 2012) and introducing FastWorks
- 5. Lean startup principles applied to global company 1. Get closer to customer 2. Increase chance of success 3. Increase speed to market 4. Make it easier to get things done Rejecting process complexity (spread teams focused on activity) in favour of simplicity (dedicated teams focused on learning) FastWorks idea
- 6. FastWorks idea Salespeople give design requirements and customers would be involved throughout. “With FastWorks we learned that SPEED - our competitive approach”
- 7. Training leaders and teams Team of 150 trained coaches Launched 100s of FastWorks projects Launched growth boards that allocate resources FastWorks implementation
- 8. FastWorks Implementation aspects Switch expected tons of money for periods of years to secure funding for short periods Justifying programs to make people feel confident about their jobs Dedicated team, not scattered all around the place Changing culture: from understanding that “everything should be perfect from top to bottom” to “change in an inevitable thing in the business”
- 9. FastWorks challenges a) SUPPLIER RELATIONSHIP - suppliers should be engaged sooner in the product development, were grateful to be asked to be involved, and have provided more flexibility. b) FINANCE - required rethinking as teams speed up, it is hard to put dollar value to the learning. Traditional financial systems are risk mitigation tools, and there is typically no weighting on speed. c) LEADERSHIP ROLES AND RESPONSIBILITIES - they inverted pyramid and research and development team moved leadership even faster then CEO. d) EDUCATION FOR MIDDLE AND TOP EXECUTIVES, for Lean and FastWorks approach
- 10. Case: Series X diesel engine product release in 6 years After talking to Eric - series of MVPs, first – in 2 years
- 11. Case: Multiphase Flowmeter Need: super precise meters adapted existing technology Internal startup that grew to a $100M business
- 12. Case: 500 MW Gas Turbine (2012) 7 years and $500M for first plant (to be built in 2019) short development cycle tricked existing turbines with little engineering to performs 10% better Then added more engineering and achieved +22% Released 4 MVPs, first in 2015, final in 2017 Put GE in “high-efficiency power” space early
- 13. Case: C-Arm (healthcare stuff) First lab mockup in 3 weeks Got customer feedback Sold 4 pieces during first weeks 11 MVPs Released new product in < 6 months
- 14. Case: Industrial circuit breaker Reduced typical to this industry 60 month development cycle to 30 month 7 MPVs 20 customer sessions
- 15. Case: Silicon Carbide Power Semiconductor Totally new internal startup that will effect all GE businesses $250M of investment
- 16. Conclusions Slides has been made in scope of course “Innovation Management” | MSIE4 | LvBS | 2016 You can ping our team via prokopenko.serhii@gmailcom Sources: Video (12:43): Mark Little, GE’s Chief Technology Officer and Leader of GE’s nine Global Research Centers Lean Startup at GE, LSC15 https://www.youtube.com/watch?v=TgAk7xP2a1M&index=2&list=PL1M9pu1POlekMxS- EKorIuuO_JynFHQRm Video (58:27): Johanna Wellington, GE–Fuel Cells: Running a Lean Startup Inside a Big Corporation, LSC15 https://www.youtube.com/watch?v=FS07NcNdBn8&list=PL1M9pu1POlekMxS- EKorIuuO_JynFHQRm&index=31 And a lot more
Editor's Notes
- #3: About GE Founded in 1892 Thomas Edison was one of the founders Fortune 500: number 4 Employees: > 300k Revenu: > $100B
- #5: Innovations today Spending $5B/year on innovation Global Research Center employs 50k engineers Placing R&D centers in different counties and cultures to grab the best people Inviting Eric Ries and lean startup principles (in 2012) and introducing FastWorks
- #8: FastWorks implementation Training leaders and teams Team of 150 trained coaches Launched 100s of FastWorks projects Launched growth boards that allocate resources
- #9: Implementations aspects Switch expected tons of money for periods of years to secure funding for short periods Justifying programs to make people feel confident about their jobs Align different functions properly Dedicated team, not scattered all around the place Changing culture: from understanding that “everything should be perfect from top to bottom” to “change in an inevitable thing in the business”
- #11: Case: Series X diesel engine Initially planned to release a product in 6 years After talking to Eric decided to release a series of MVPs, first of which – in 2 years
- #12: Case: Multiphase Flowmeter Customers wanted some super precise meters, GE didn’t have that technologies But the took that they had and adapted it a little bit Internal startup that grew from nothing to a business of about $100M
- #13: Case: 500 MW Gas Turbine (2012) Initially needed 7 years and $500M for first plant (to be built in 2019) Eric convinced the team to shorten development cycle They tricked existing turbines with little engineering to performs 10% better Then added more engineering and achieved +22% Released 4 MVPs, first in 2015, final in 2017 Put GE in “high-efficiency power” space early
- #14: Case: C-Arm (healthcare stuff) First lab mockup in 3 weeks Got customer feedback Sold 4 pieces during first weeks 11 MVPs Released new product in < 6 months
- #15: Case: Industrial circuit breaker Reduced typical to this industry 60 month development cycle to 30 month 7 MPVs 20 customer sessions
- #16: Case: Silicon Carbide Power Semiconductor Totally new internal startup that will effect all GE businesses $250M of investment