Why GE Digital Failed

As a GE SW developer, I could chime in.<p>Regarding digital transformation, this should not come as surprise but there is an incredible tension and misalignment between a GE core pushing for a platform and different businesses.<p>The issue is that businesses have roadmaps where they need to release new products each year, and it does not take into account having to rewrite everything or huge part from scratch to get some longer term platform benefits. So in the end the adoption is an issue.<p>I joined GE just before Predix introduction, and no one in my business rushed to adopt it. As a matter of fact, now that GE digital is going to be divested, that was likely the smart move.<p>Moreover, the product I am working on, is based on the &quot;GE platform&quot; effort of a few years prior. Platform that has no longer any official support (the maintenance team is one guy somewhere in the world) and that has re fragmented in every different product it was used in. The lack of support is not really an issue because the framework has been battle tested but on the other hand, there is no obvious benefits coming from having an &quot;almost-common&quot; core between applications or devices. So as business it makes you wary to adopt the last idea coming from GE digital or GE central, event it makes absolute sense on paper, because you have no idea how long they will commit to that idea. This is really a chicken-egg problem, because no one wants to use a zombie platform, and no one wants to spend support on a platform no one uses.<p>Maybe on a more positive note, even if I have not seen much direct impact on GE digital products, GE SW culture has changed. When I joined, SW was kinda neglected, more seen as a liability than anything, and now at last we have moved to more modern tools with CI pipelines, focus on devops and so on. But this is more like a grassroots effort. But I don&#x27;t feel anymore that we are using a sw stack and tools totally outdated.

&gt;GE was going to own the industrial internet.<p>I have a friend that works in mechanical maintenance. Heck, i used to work for him while i was putting myself through automotive trade school. Mitsui, Mitutoyo, Kuka, and Motoman not to mention Fanuc are all household names for industry automation based on a well defined platform of experience dragging back more than 30 years. Hell, even mitsubishi controllers are massively more invested in tooling and automation than GE ever could be.<p>And, they listen to customers...theyre open by default. I can plug motor control data and Fanuc probe logic systems into my Infinity QS SPC software and get accurate runout and ID&#x2F;OD grind data in <i>REAL TIME.</i> no licenses required because in machining or component part shops that are large enough, its more important to meet JIT deadlines than it is to pay licenses (they get paid after the fact, and vendors are happy to subscribe to this model.)<p>The only GE stuff we used was in the substation transformers used by the building to feed power to the cymbal cutters and CNC systems in the shop. never networked, because it didnt have to be.

<i>Yet at the same time, GE Digital was given a P&amp;L and had to make quarterly commitments on performance. The revenue was tied to the work it was doing with internal GE business units and one-off partnerships with outside software companies. So when Predix integrated with a new partner, the focus was usually on generating short-term revenue and not long-term value to GE&#x27;s end customers.</i><p>Short term profit seeking is a cancer upon us all, is there no way out of this hell?

That GE Digital failed, is no surprise to folks like me who worked (left there a couple of years back just before things got especially bad with layoffs) at GE&#x27;s R&amp;D labs and were always skeptical of the flashy sales pitch surrounding GE Digital&#x2F;Industrial Internet with very little to back it up. When I tried to look into playing with Predix and utilizing it on GE projects I was working on, it boggled my mind that they wanted to charge me, a GE employee, money to use Predix on projects for GE.<p>That of course meant that internal adoption of Predix was negligible unless mandated by higher ups, and if your own company isn&#x27;t going to adopt and improve the product, I sure as hell don&#x27;t see why anyone external to GE would.<p>Apart from that, GE Digital was a fundamentally mismanaged effort. The people in charge seemed more interested in talking the talk rather than walking the walk. Most people at San Ramon seemed very disillusioned and their frustrations were out in the open during any of the company-wide all-hands meetings with a Q&amp;A component.

For me the television ads were a &quot;bad smell&quot;, just as they were for IBM Watson.<p>Somebody should start an ETF which disinvests in B2B companies that run bullshit ads.

Are there any succesful examples of digital transformation ? I know digital transformation is the thing to do if you&#x27;re in strategy or management consulting, so I hope to get some input from practitioners, or anyone who witnessed one.<p>Derisively, my impression is that an organisation like GE will have to go through garbage collection while one (or why not more) digital native organisations take its place, in order for the new organisation to be a digital native. But I have no idea if being a digital native is even necessary. Most GE business units seem to be doing just fine with their accumulated capital of all kinds and their economies of scale.

I work in a conglomerate that is in the middle of digital transformation. The problems we see are exactly the same as stated in the article:<p>1) Incumbent IT&#x2F;Dev teams eating millions of dollars creating roadblocks every where for the newer teams<p>2) Expected to bill the newer platforms to existing business divisions<p>3) Red-tape and bureaucracy all over the place - Loads of approvals needed to do something simple like setting up dev environments<p>4) Top down planning for &#x27;transformation&#x27;. No inputs are ever sought from new teams on anything<p>To sum it up -&gt; doomed before even starting

&quot;Digital transformation initiatives don&#x27;t need thousands of people. They need a small team with very little time and very little money.&quot; Ok, think this through.<p>Big businesses have money.<p>They can create small teams easily.<p>Creating a short term team with not much money is in the power of <i>every</i> company in the fortune 500, heck, it&#x27;s in the power of the top 10,000 companies...<p>And yet we do not see these teams doing these transformations. Shure we see teams creating &quot;friendly digital employee pals&quot; and &quot;Machine learning driven employee survey feedback tools&quot; but what we do not see is small, underfunded teams rapidly changing the face of business.<p>Because... it&#x27;s hard. In reality, although executives love the message &quot;small team, no money, fast&quot; the translation that they should be using is &quot;a way of wasting a bit of money and time doing something that will definitely fail&quot;

&gt; Even more challenging, true digital transformation will almost always fail if executed from within the organization. Why? Because the change is so disruptive that the existing organization chokes it off.<p>Though I&#x27;ve never worked on these sorts of enterprise transformation projects (at least not at this scale), it&#x27;s pretty interesting how the internal dynamics&#x2F;politics can affect them and cause most of them to fail. Normally, my takeaway is that you can learn a lot more from failed projects. But this sort of project ends in failure so often, I think the reverse is actually true (for once).<p>Consider the (resoundingly) successful example of Disney&#x27;s Next Generation Experience (NGE) project team, which developed what was eventually known as MyMagic+ at Walt Disney World.[0][1] They were basically given carte blanche to interrogate every aspect of the vacation experience to reinvent it, settling on using RFID-equipped &quot;MagicBands&quot; that would replace tickets, photo cards, credit cards, etc. There wasn&#x27;t an aspect of the vacation experience, or a department within the Parks division, that wouldn&#x27;t have been radically changed by NGE. When the board approved the $1bn project, Bob Iger told the executive in charge of it &quot;this better work.&quot; There was infighting, turf wars, and everything else; it&#x27;s not that people wanted it to fail, but everyone had their own idea of how to define success. And yet, despite everything, it succeeded beyond even Disney&#x27;s collective imagination.<p>These projects might be damned infuriating when you&#x27;re working on them, but they&#x27;re fascinating to read about from afar.<p>0. <a href="https:&#x2F;&#x2F;www.fastcompany.com&#x2F;3044283&#x2F;the-messy-business-of-reinventing-happiness" rel="nofollow">https:&#x2F;&#x2F;www.fastcompany.com&#x2F;3044283&#x2F;the-messy-business-of-re...</a><p>1. <a href="https:&#x2F;&#x2F;www.wired.com&#x2F;2015&#x2F;03&#x2F;disney-magicband&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.wired.com&#x2F;2015&#x2F;03&#x2F;disney-magicband&#x2F;</a>

I had the sense that GE didn&#x27;t know what they were doing withe Predix and their whole industrial internet strategy. It seemed like some executive went to a &#x27;innovation conference&#x27; and drank the kool-aid about industry 4.0 and IoT... came back to the office, slapped a 10-slide deck together for the board of directors framing a strategy to take over market space built around acquiring a promising company or two and building a business unit around them. Board approved, they go off to execute... years later they realized their 10-slide deck was dumb, their understanding the market was flawed, and their product misaligned. This is par for the course for GE over the last decade plus.

As someone who worked for a branch of GE, I&#x27;m surprised it took this long for people to realize that it wasn&#x27;t all sunshine and roses. This is the key quote in the article for me:<p>&gt;Then, one year later, in 2014, GE released a press release that said it was generating more than $1 billion in revenue from productivity solutions, highlighting Predix.<p>Like the article says, the vast majority of this $1 billion came from counting the revenue from any product that utilized Predix&#x2F;GE Digital resources, no matter how much they contributed. I also never heard of any outside company that utilized GE Digital resources, but that doesn&#x27;t mean that it didn&#x27;t happen.

This was clear from the beginning.<p>I&#x27;ve had team members quit a few years ago to join GE Digital, lured by crazy salaries. Too good to be true.<p>For GE, this was a spreadsheet initiative. Some SVP added a few lines to spreadsheet, opening headcount for a few thousand people. Same SVP would lose interest a few years down and would simply delete those lines again. Nothing more to it, this is corporate 101 on this level (see Siemens, HP, others for the same stuff).<p>Sucks for people that adjusted their lifestyles to those salaries, but it was clear, from the beginning. Hiring a ton of mediocre talent with top pay always mean trouble.

Shortsightedness in American business never fails to amaze me. You would think that a company as old as GE would be able to recognize the difference between capex and opex, but these sorts of missteps still seem absurdly common.<p>Even GE still struggles to understand software. It gives me hope that software engineers will become the next class of power players and the whole thing isn&#x27;t going to get subsumed into finance like everything else. Even Apple is falling prey these days to finance-thinking.

As a customer of GE software products, I&#x27;ve seen their core products falter a bit while they attempted to prop up the Predix platform. Maybe it will be a breath of fresh air when&#x2F; if they sell Predix, hoping that they will focus more on their core products. It is difficult to sell a platform to industrial customers, as many of the ideas are too abstract to understand what it can do for you and how much money it will make for you.

&quot;Even more challenging, true digital transformation will almost always fail if executed from within the organization. Why? Because the change is so disruptive that the existing organization chokes it off.&quot;

<i>True digital transformation is about rethinking your current business model for the 21st century. The process is not just about adding technology to the existing model.</i><p>Wtf does that even mean.

This article gives some really good points to be considered by organisation planning to ride on wave of &#x27;Digital Transformation&#x27;