In 2005, GE launched a strategy, Ecomagination, to increase revenues from environmentally friendly products. The interest was spurred by natural -resource and environmental challenges facing the world. GE’s energy business was complex and dispersed serving a wide range of customers. They had impressive R&D capabilities, but new innovative ideas tended to develop form small organizations and individuals within the sector. They wanted to figure out how to be a leader in Green Energy and integrate its existing efforts with those outside the company.
In 2010, GE and some Venture Capitalist partners started an open innovation initiative called the Ecomagination Challenge. ...view middle of the document...
Neither would happen in the short term, it could take years.
Chief Marketing Officer, Beth Comstock had to present a full report of findings to the CEO, what were the results, was it a success? Should this be done again in the future?
The driver for this initiative was to generate innovative ideas surrounding the clean energy technology and drive global energy transformation. It was innovative just for GE to come up with the Ecomagination initiative. The VC’s gave a different perspective then the silo mentality that exists in very large corporations. GE stepped out of their comfort zone. The biggest challenge is not only how do you measure success, but when? For the initiative to be successful, GE has to plot Return on Investment of their $200m expense. These startup initiatives will take years to develop and will they be able to be rolled out to a large-scale customer base?
In the big picture, $200m is 2% of the budgeted $10B Research and Development investment over the next 5 years. It is well worth stepping out of your comfort zone to see if you can hit a homerun. It also provides learning perspective and develops relationships with smaller scale businesses and individual entrepreneurs. One thing I did not see was market research data. I understand the need for green energy, recycling, managing our natural resources etc., but what about the customer base? What are their needs? Did they drill down to that level? How will these new initiatives affect the cost of energy that is passed to the customer base? Are these initiatives within that scope?
Too many times major companies focus on their needs and not those of their customers. I...