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- Oct 14, 2019
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Why General Electric's (GE) Digital Transformation Failed
Abstract of the article "Why GE Digital Failed" by Alex Moazed
Digital transformation, or any transformation initiative for that matter, means more than simply trying to enhance traditional methods. It is about rethinking the existing business model by applying innovative thinking in order to create something new.
GE was going to own the industrial internet. Suddenly, it doesn't. What happened?
Independence is Key
GE’s transformation team was established as a separate business unit, core to business operations. In order to succeed, it needed to be separated and independent from the business. Why? Organisations ordinarily resist change because it is so disruptive. Furthermore, staff become so preoccupied in the day to day activities that change initiatives tend to be pushed back, unintentionally creating bottlenecks.
Smaller, Skilled teams
GE’s investment in terms of money and resources was substantial, however it did not have to be. Smaller, focused teams are more cohesive and effective in this type of situation. It does not require excessive investment either. Transformation is as much an art as it is attitude and businesses do not possess the requisite skilled resources (transformation skills).
GE introduced a P&L to manage the performance of its transformation team, which oriented the business around short term growth measures rather than long-term strategic objectives. And so a dichotomy emerged as effort and strategic objectives soon became misaligned. Transformation is strategic by nature, resist trying to fit it into an existing business model that assumes short-term measurement.
To read the full article written by Alex Moazed and published on Inc.com. Visit: Why GE Digital Failed
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