Online Extra: Bringing Innovation To The Home Of Six Sigma

Says GE CEO Jeff Immelt: We want to make it O.K. to take risks

Jeff Immelt is creating a stir at General Electric Co. (GE ) Through the years, GE has produced a string of superlative results using precision management tools such as Six Sigma and by giving execs rich incentives for efficiency. Now Immelt wants to turn GE's buttoned-down ranks into a legion of innovators with a flair for creative thinking. He spoke with BusinessWeek's Diane Brady about his experiences and his expectations.

You talk about making GE more innovative. What do you really mean?

We need to be focused on where customers are going. We should be playing into major demographic trends and the needs of our customers.

How do you get there from here?

We want to make it O.K. to take risks and do things that aren't just going to [produce results] this quarter. One way I do that is with the Imagination Breakthroughs ("The Immelt Revolution," Management, BW -- Mar. 28).

Is this simply a matter of giving people permission to take risks?

[In part], but we're also working on a whole new set of leadership traits. We went through a comprehensive internal effort and came back with five traits we now use at our training center in Crotonville [N.Y.]. They are: external focus, decisiveness, imagination and courage, inclusiveness, and domain expertise. This is the foundation of how you become more innovative.

Do you have to do more than that to make your managers truly creative?

Creativity is important. It's an ingredient in innovation, but it's not the only thing. We're trying to stimulate new thinking by bringing people in from the outside, such as [design consultants] IDEO, to make sure we're not too internally focused.

What do you feel the outsiders have brought to the company?

They try to approach growth in unique ways by looking at unmet needs of customers. We do creativity sessions with them and things like that. It gives us some new, nonlinear thinking, which is something I've picked up from A.G. Lafley at Procter & Gamble (PG ).

Is Lafley a particular inspiration to you?

We used [P&G] as a benchmark. He has that innovation gym [to train managers and test new ideas] and he has found new ways to blow some of the walls out and do a better job of integrating ideas from the outside.

Is it a big leap from a Six Sigma culture focused on productivity and quality to an innovation culture?

I look at Six Sigma as a foundation on which you can build more innovation. I don't think every manager can do both [Six Sigma and innovation], but I don't need every manager to do both.

Why do you think innovation is more important today for GE, or for business in general?

We're leaving a period, particularly in the late '90s, where global economic growth of the developed world was pretty robust. It's just choppier now. You need new ways to boost growth.

Do you think managers have to become more like designers, or masters of creativity?

What I tell people is that we have to develop new leaders for growth -- people who are passionate about customers and innovation, [people] who really know markets and products. [Traditional] professional management isn't going to give you the kind of growth you need in a slow-growth world.

Do you feel you've become more innovative in the past few years?

[It all] goes back to people -- those who want to take swings. I tell people that you have to view these [new leadership] traits as critical to your long-term development. You have to change...or else you don't have a great future at this company.

Edited by Patricia O'Connell

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