How Innovative Is GE Really?By
General Electric is selling its appliance division and the decision brings up a host of questions about whether or not the company is truly innovative or merely mouthing the words, as so many big companies do these days. I don’t have the answer yet but I am troubled by the sale of the GE brand of appliances for several reasons.
First, the appliance division is pretty good at design and innovation. Whirlpool is the leader, with Chuck Jones heading its design/innovation efforts, but GE’s appliance division knows all the tools and methods of consumer research and creating a good experience for its customers. My sense is that GE HealthCare is the best at design and innovation in the GE family, but the appliance people know what they are doing—and could probably teach other operations at GE
how to understand the cultures of their customers and ways to meet their needs.
So I am sorry to see it go. One argument is that appliances is now a commodity business that the Asians can be cheaper and better. I don't think so. The old white-goods idea of one-color, one price (cheap) is a commodity business, but Whirlpool is showing that innovation and design for their front-loading washing machines can product products that people really want and are willing to pay bigger bucks to have.
The amazing growth of a new middle class in China and India is also an event of enormous opportunity that GE appliances could have taken advantage of. I believe that most of its sales were within the US, a big mistake that could easily have been corrected. If GE appliances had gone deep in Asia, it could have generated much bigger profits.
My bigger worry about GE is that it is not really transforming itself from a cost and efficiency and numbers based culture into a creative, innovative organization. The theme of ecoimagination appeared to be about innovation when it started but is really about going green. That's great and transforming the companies portfolio of business is a kind of business model innovation. Good. But its not the kind of culture change that we see being implemented at P&G under A.G. Lafley. There dozens and dozens of workshops on design thinking are changing values and behaviors. Nothing like that is happening at GE. Why?