We caught up with Beth Comstock, Senior Vice President and Chief Marketing Officer at General Electric, to get her advice on how established companies that have traditionally done innovation internally can open up. This was an exclusive conversation with InnoLead; an edited transcript is below. In addition to her role at GE, Comstock is on the boards of Nike and Quirky, a product development site. We’ve previously posted audio and highlights from a talk Comstock gave at Harvard Business School.
Q. GE is an enormous company, with a 100+ year history of developing technologies and building new businesses. How do you think about the need to innovate in 2014?
A. No matter what your business, most of us are dealing with the rapid acceleration of technology and globalization. You have new competitors with new biz models — it’s a lot for any organization to keep up with. But I think we’re seeing and learning about the value of networks to amplify your ability to build scale and speed. You have to open yourself up and do more partnerships.
We have a deep, rich history of technological and market development innovation. Still, you have to recognize that no matter how good you are, you don’t have all the answers. So what you’ve seen us do is more partnerships, many of them with startups.
Q. But how do you set up a company of GE’s size to find the most interesting startups and work with them?
A. You have to have a good filtering mechanism. And you have to be very clear, and say, “These are the areas of interest for us,” so people know what door to enter. For a startup, it can be your best and worst day to think, “I could potentially work with GE.” A company like GE has all this access and scale, but you could get lost in the system. GE Ventures is a big part of the answer. (See our interview with Noah Lewis of GE Ventures for more.) It is as much about investing as it as about partnering with startups, in areas like software, healthcare, energy, and advanced manufacturing. We publish and talk about the themes we’re interested in.
The second thing we’ve done to open it up is to create a series of challenges. For example, we want to 3D print and design a new bracket for a jet engine, to take as much weight out of that part as possible. It’s a commodity part, and we’ve pushed the limits of what we can do. So challenges are another way to invite startups, inventors, and people with different skill sets to become known to you.
Q. A lot of companies get stuck worrying about the competitive dynamics — why should I tell my competitors what areas I’m interested in, the problems I’m trying to solve?
A. Every company has its state secrets. And there are always going to be cultural challenges. I think that’s inherent in the process. But by opening up, you force yourself to declare what’s most proprietary and what’s most important, and that’s what you want to focus on. But even with things that are proprietary, you can create a system [for partnering or collaborative problem-solving] that is selective and may not let everyone in.
But the things that we’re not good at, that are more commodities, some of them can probably be better done by others. Those are things we’ve had success opening up. We opened up several hundred patents on the Quirky platform. That was a long journey — there was a trademark and licensing review over the course of years, where we decided, “We have no further applications that we can think of inside, so let’s open them up for other people to license.” It’s much better to make that kind of stuff accessible.
A lot of credit goes to Jeff [Immelt.] When he took over as chairman and CEO, he said, “We’re going to grow from within.” Organic growth is going to be a hallmark of what happens next at GE, in four ways: invest in the best technology and innovation; be more global than ever; get closer to customers; and more recently, be simpler in how we operate. And he has very much said to the company and the leadership, “We simply can’t do all this by ourselves. We have to partner more.” One of Jeff’s best lines, which he’ll often use in growth reviews, is, “Do you want to be 100 percent of nothing, or 20 percent of something successful?” I think that has given people the permission to share risk and reward [with outside partners], and to know you can’t do it all yourself.
Q. Your title is Chief Marketing Officer, and yet everyone I’ve spoken to says you are the top innovation leader at GE. How do you see innovation as being part of your job description?
A. You don’t have enough space to write about how I feel about this whole subject. I think marketing is misunderstood in business. Marketing’s job is helping to unlock value for customers and the company, and helping to innovate new models. When you have that kind of a lens, it takes you to ventures, as not just equity investing, but partnerships. We want to find ideas faster and partner faster. Most people think marketing is the advertising department. That’s part of what we do, but there’s so much more that every CEO should be asking of their marketing team — unlocking value and bringing innovation into product and market development. That’s what we do. So the title is actually quite intentional.
Q. We’ve been talking a lot about partnerships, but what about innovation and structural changes inside GE?
A. We’ve done a lot to invest more in [geographical] markets. We have market development teams sitting alongside technical teams in a market. They’re embedded in the healthcare industry in Ghana or Saudi Arabia, trying to figure out what is needed in that country. So we’re developing in the market, as opposed to centrally. That has been a huge shift.
I’ve been talking a lot lately about the data that goes around the big iron — great technology overlaid with data — and that creates a whole host of analytics opportunities for us.
Q. Can you talk a bit about the FastWorks program and your interest in the lean startup approach?
A. We gravitated to the lean startup as a way to embed some of that casual, lean startup thinking and to work differently. In a way, lean startup remind sme of some of the things that Peter Drucker used to say, like, “Without a customer, there is no business.” Sometimes you need to be reminded of that.
We work in these very complex, deep industrial technologies, though. You want to get as close to perfection in some of these technologies as possible, but the goal also has to be progress, not just perfection. Lean startup has reminded us that there are things you can get out fast in front of customers, but there are areas where you need perfection. Rather than filtering things through focus groups and surveys, it encourages you to just get things in front of the customer. So we strive for perfection around what is most critical, and then we do a lot of minimum viable products around the things that can move fast that way.
Q. We hear so much about disruption these days — with the assumption being that it’s always a startup rather than an established company that is shaking up an industry.
A. Disruption happens. You have to be aware of it. But I don’t think it should paralyze you, especially if you’re investing in the best technology and you have the best connection to customers.
We have sessions where we’ll bring in startups, since it’s sometimes good to hear from them. They wake up and think every day, “I’m going to disrupt the incumbent. I’m going to totally disrupt this model.” You have to be aware of it, but focus on what you’re good at.
Q. I feel like a lot of times, big companies are so obsessed with their traditional rivals — Coke vs. Pepsi — that they don’t pay much attention to what is happening in that startup landscape.
A. It goes back to the speed of technology and globalization. When you’re embedded in the global world and the startup world, you do realize traditional competitors are important, but that there are a lot of new competitors in the global market and the startup world that we can at least can learn from, and have on our radar.
More: Comstock wrote a piece published on Harvard Business Review’s website earlier this month entitled, “Innovation Is Marketing’s Job, Too.”