Back in 2014, Jeff Immelt had an idea: He would cap what would by then be a nearly two-decade run at General Electric’s helm by transforming the 120-year-old industrial conglomerate into a cutting-edge software shop. The Mill River Valley would rival Silicon Valley when it came to big-data innovation. Sure, GE didn’t know the first thing about digital technologies, the cloud, etc., but it knew a whole lot about the things those things connected to and controlled. By 2020, GE Digital would be bringing in $15 billion a year in revenue.
It was, in Immelt’s mind, a flawless plan, and since Immelt did not tolerate naysayers, it remained foolproof within the hallowed halls of Fairfield. But, as you may have guessed based on, well, everything, GE Digital is not an industry-leading Internet of Things giant and isn’t bringing anything close to $15 billion a year. Why? Well, for the same reasons that everything else has gone wrong at GE over the past half-decade (or more!).
The team had digital design files—mock-ups of the way the program might eventually look—but nothing running on a real machine to show the longtime CEO.
Supervisors waved away these concerns. One employee was told it was time to “fake and bake….” Word came back the next day. Mr. Immelt loved it….
In meetings of the GE board of directors, these grand plans received a blessing of silence, according to people close to the decisions. The board, made up of current and retired business executives and academics, liked Mr. Immelt and didn’t like to challenge him.
The board tacitly blessed Mr. Immelt’s digital dreams and his plans to stand up a software company inside General Electric, but never decided—much less voted on—a critical question about such a massive experiment: How much money were they going to spend on this.?…
It was perhaps telling that as GE rolled out a product it claimed would change the way industrial machinery and major economic sectors operated, the company’s executives couldn’t even agree on how to pronounce it. Mr. Immelt extolled the potential of a product he pronounced as “Pree-dix,” sometimes then turning over the microphone directly to an executive whose version sounded more like the verb “predicts.” GE Digital was on track to spend $5 billion by 2016, according to people close to the operation—a massive sum even by GE standards, equivalent to about half the R&D budget for a new, clean-sheet jet engine.
There’s oh so much more where that came from if you’re into corporate snuff porn, coming to your Kindle tomorrow.