Aligning with government priorities, making the right investments, and developing the right capabilities—all are part of the equation that makes GE a great global company, and a great local company

 

MANILA, Philippines — One of the challenges faced by big companies today is to figure out how to get the small ideas up to the level where they are funded and tested. Big ideas are easy—the electric car, solar panels, the barcode, DNA profiling, etc.—everybody sees them; everybody gets them. But it’s the small ideas that can become big ideas that companies have to try to capture.

This is exactly why GE, a global leader in innovation, upholds a program it calls “Imagination Breakthroughs,” wherein senior leaders take a “small idea” or project and sponsor it. “We deal directly with the engineers who are on the ground to cultivate and nurture this small idea because we want to protect it. We don’t want the system to say, ‘it’s only a small idea so we’re done.’ The plan is to both nurture the idea and figure out which ones will become big,” shares GE Vice Chairman and President and CEO of Global Growth & Operations, John G. Rice.

More than discovering the next breakthrough technology that will further propel the company beyond the success it now enjoys, Imagination Breakthroughs are really there to teach the organization that, hey, it’s okay to not get it right the first time around. “Most innovations are a product of trial and error,” asserts Rice. “Thomas Edison invented the light bulb—he invented GE—and he screwed up a lot of light bulbs before he created the one that works, and to this day people continue to make [his idea] better and better. That’s the spirit of culture we always want to have throughout GE. [We want] people who are willing to take a shot at something, and risk failing, in the hopes that their little idea will become a great idea,” he says.

 

A Global, Local Company

Being GE’s main entry point into the ASEAN region, the Philippines shares a strong history with the company that dates back to the 1890s when the Thomas Houston Electric Company installed the first electric street lights on Real Street in Manila. “Our presence in the Philippines is not new; GE is 130 years old, and for 120 of those years, we’ve been involved in some way in the Philippines. We incorporated our legal entity here over 75 years ago; we have a strong history here that we’re quite proud of,” shares Rice, who, along with GE CEO for ASEAN Stuart L. Dean, was here to attend the GE Innovation Day held recently at the Makati Shangri-La Hotel.

The event, which brought together more than 200 key customers, members of the academe and government representatives, was specifically designed to demonstrate how GE works through innovation and co-creation with local partners to nurture economic development and long-term sustainability. “We realized that to help the country address the challenges that exist with respect to infrastructure, power generation, healthcare, etc., there is a need for GE to think of newer, better ways to do so. If you’re like GE and you do business in a hundred different countries, you have to figure out the right formula in each one. How do we provide services to people on thousands of islands? It’s my third visit in the Philippines in the last 14 months, and that’s what we’re working on, what we’re trying to figure out,” Rice shares.

How, then, will GE bring its global strengths and make them look, feel and act local in the context of the Philippine equation?

According to Dean, the way GE does this is to tailor its investments and innovation according to what the market needs. “There was a time when most countries were focused on power generation in the form of big blocks of power—very big coal plants, combined gas turbines producing 500 to 1000 MW of power usable in big cities. And in the U.S. and Europe, that worked fine because there is population density everywhere,” he says. “But in this world,” he adds, “in the Philippines, Indonesia and most of Africa, the grid isn’t equipped to carry those electrons where they need to go. As a result, you have to focus now on distributing power using smaller power blocks. So when I talk about our portfolio, it’s starting at 300 kilowatts up to a hundred megawatts, and everything in between. Because to solve the power equation in the Philippines, you need to do a lot of things, and one is to figure out how you can get these smaller power generation installations up and running in remote cities and villages.”

The same thing holds true in healthcare. Ten years ago, most of GE’s investments in healthcare were focused on higher end, more expensive technologies. “More sophisticated imaging equipment, computer tomography and MRI machines,” puts in Rice. “These are okay in some of the richest, developed countries. But you’re only going to need a handful [of these technologies] in a country like the Philippines, where the focus should be on the people that don’t have access to ANY healthcare. So we’ve spent the last five years or so recalibrating our healthcare business around technologies that focus on affordability, accessibility, portability—now we have a hand-held ultrasound which gives you the ability to bring healthcare to a remote village in a way that was not possible even five years ago,” he shares.

 

Growth Prospects In The Philippines

With the country going thru an infrastructure-building period that is predicted to last over a ten-year period, Rice expects GE to grow more here. “We would expect on an ongoing basis to grow at reasonable double-digit rates here because the economy is strong, and we would expect to grow faster than the economy because there is a big demand for infrastructure, and the kind of things we do are what the country needs,” Rice says.

Infrastructure development, Rice affirms, is actually what is driving GE to become more aggressive in the Philippines. “If you follow what we’ve done in the last few years, we put the majority of our investments into basic infrastructure. We moved out of engineered plastics a few years ago, reduced our stake in broadcasting, and we’ve put back capital into our healthcare, energy and gas-related activities. In many respects, we’ve been designing our company over a ten-year period for the kind of world we see today in many places, including the Philippines,” he shares.

One innovative product that GE feels would work in the Philippines is Smart Grid technology. According to GE CEO-Philippines Jocot De Dios, Smart Grid covers everything that happens from the point of power generation to the point one flips on the light switch. “We’ve already made an initial investment in our Smart Meter’s subsidiary in order to get a full idea of the actual requirements of the Philippine grid system. We’ve put in $300,000 as an initial study but obviously that will be a function of how big the market is going to be,” shares De Dios. While some may deem GE’s investment relatively small, Rice asserts that the priority now is to determine the technology’s scalability. “If the pilot works, and you hit the cost targets, and determine the features and capability that’s right for the Philippine market, the better question is really how quickly can it be scaled? And in this case,” he assures, “it can be scaled very quickly. We don’t worry so much about whether the initial investment is big or small, but what we worry about is designing it so the initial investment gives us all the information we need to make the right decisions about how quickly to grow it.”

Published September 2, 2012 in the Business Agenda section of Manila Bulletin

Advertisements