At General Electric, a founder's business chops are as important a legacy as his technological wizardry.
It’s easy to forget the impact Thomas Edison had on the way we think about the technology business—this is the guy who took electricity commercial, after all.
Edison was one of the principal founders of General Electric, which still towers over the U.S. business landscape 120 years after its inception. However, the company’s reliance on an overgrown financial business before the recession made it vulnerable during the crash. Today, GE is working to shift back to the industrial businesses it was known for in its glory days—energy, transportation, and medical equipment.
Making that adjustment in uncertain economic times will require a nimbleness large companies aren’t known for, but GE is betting it can adapt with the best of them. “Longevity means you’re good at change,” says Beth Comstock, the company’s chief marketing officer and the face of its innovation strategy. “The word has become a bit of a buzzword [but] it’s the heart of GE. We’ve been pushing the idea that innovation is a big spectrum: Don’t discount the technology, but we need new business models, more market-driven innovation.”
The company has been increasing its research and development spending significantly, as well as focusing on finding and building new markets for its products. In this pursuit, Edison is a useful role-model—he was an inventor, yes, but also a corporate titan who led mergers and acquisitions, profited from extreme marketing stunts, and leveraged mass distribution to take his inventions to increasingly large numbers of consumers.
“He was a great business innovator,” Comstock says. “It wasn’t enough to figure out the light bulb, he had to figure out the entire electrical system to power the light bulb. Thomas Edison was a great marketer as well as a great innovator.”
GE’s advances won’t come in the same vein as new products from buzz-worthy startups or backyard inventors, though the company has set up an incubator to work with a small group of young businesses. The company’s real focus is the potential to scale within GE’s existing business areas—a strategic move Edison—a serial if not always beloved collaborator of other inventors—might have endorsed.
“That ability to scale with GE is worth a lot, the ability to tap into our expertise,” Comstock says, pointing to a partner startup building visualization software that the company hopes to deploy to its energy utilities. “The business processes are usually set up to innovate from the core.”
GE, like other large companies, faces pressure to maintain its central businesses—“GE jet engines have to be the best,” Comstock says flatly—while still breaking new ground. Comstock has led a series of initiatives designed to bridge the gap between the two priorities, convening executives from different business lines to create “platforms” that address key markets like health care and clean energy. “We had different business units in the company,” Comstock says. “What if we connected them all together and focused on innovation and new ways of going to market?”
That strategy has earned Comstock plaudits from the press—she’s a “Gen Fluxer”!—and billions in revenues for her company. Executed correctly going forward, it could mean a boon for the kind of investment needed in sectors like clean energy. There, a bullish GE is still invested heavily—though not as much here in the U.S.; GE does 50 percent of all its business abroad and much of its clean tech work in countries like Australia and China.
To build on that record, GE will need to remember as much about what Edison did in the board room as what he did in the lab—though hopefully stopping short of his more ethically dubious marketing practices. If you have lightbulbs without mass electricity—the killer app without the platform—you don’t have much at all. The same goes for solar panels and electronic medical records.