Thread regarding General Electric Co. layoffs

Immelt and Comstock the real jokers in the pack. Treating a conglomerate like a startup never works, start ups have nothing to lose and most fail. GE had everything to lose, immelts obsession with double digit growth and fear of failure, being recognised as the man who destroyed GE during the financial crises of 2008 he should have been sacked then. Immelt the gambler rolled the dice one more time and IIoT failed because he thought he was IBM or Microsoft.

The only thing worse than Predix, San Ramon and GE Digital is the joke of sub-digital businesses hiding out in the BUs. Unfortunately GE Digital is slowly acquiring those and what you get is both Digital incompetence merged with legacy rotted GE Culture.

The real problem was that Immelt was / is a blow hard marketer and a failure at that. He therefore, accepted the Powerpoints and mock ups that were shown to him. Much like many sales people who are in it for the sale, he allowed his team to sell to him and he fell for everything hook line and sinker. Along with his other ridiculous decisions (see mass sell off of Capital, purchase of Alstom, etc etc) it is no wonder that GE is where it is

It was another case of having to many sales people, and project managers, and not enough highly skilled and talented folks to do the actual work based on the market need. When you have upper management without any detailed experience deciding on a business they have no idea what it is then you get this. Basically GE is being run by folks with no connection to their customers or the markets they serve.

Predix development was funded in large part by zeroing budgets for enhancement and maintenance of existing software that was already usefully filling the niches for which Predix was intended. After these budget decisions alienated teams across the organization, GE Digital then proceeded to ignore the body of existing work, and the business processes depending on that existing software were hobbled through lack of maintenance for their day-to-day software tools.

More Junk and dumb ideas from the powers to be. I can not wait for my walking papers

"Engineers found that the tiny sensors in GE’s machines produced tons of data, but since they used distinct coding on systems spread throughout GE’s global businesses, putting everything on the same platform made the functioning of the apps excruciatingly slow."

"they also made the conglomeration of Predix’s code even messier. The result was software with plenty of bugs, a difficult user interface, and none of the requested features."

Spot on.

Putting the cart before the horse for publicity reasons to impress? Fueled on beliefs not reality, in the end nothing to show but exorbitant spending.

This brings back some unpleasant memories, but it jives 100% with my experience at the time. It's strangely cathartic though to see the WSJ cover this and get it right.

I was an SPB software engineer at the time, arriving at GE via an acquisition. During my time there I was increasingly perplexed by the "direction" leadership was taking in their effort to make GE a "top 10 software company". I was one of the few who openly challenged the leadership of our org, and there is a good reason for me being in the minority. Disagreeing, even when proposing alternatives, was disincentivized. Those who parroted the optimistic and ever increasingly unrealistic messages were pushed toward management and promoted. Those who did not, were ignored at best. I watched rational and intelligent coworkers who were realistically business minded people prior to being acquired by GE, become fully immersed in the koolaid perpetual machine - I'm not certain if they even realized how they were changed by the culture surrounding everyone there.

Around the time when they were predicting higher revenue growth in 4 years than Facebook's best 4 year growth rate... it was obvious to me that it was time to leave a ship that I thought at the time will probably sink (it did a few years after I left).

In my experience, aside from the clear strategic blunders mentioned in this article, the biggest issue I saw was the leadership culture. Project failures were celebrated as a "success" because "we learned something valuable". Powerpoint slides were celebrated and (literally) applauded as if something ground breaking had been delivered - I remember one cringe-worthy slide deck with 0s and 1s being turned into $$$ via some unknown black box of "big data", as it refines this "oil" into "gold". Unfortunately that's the level where peoples' understanding ended. Yes, there is huge potential in data-based and AI-powered products, but it's not a magic black box you sell to a customer and increase your revenues 25x in a single year. What would have been called for is a cold shower of realistic expectations and project plans. This didn't play into the story everyone was collectively spinning though.

Despite all of the above, I'm sad to see how the situation has deteriorated at GE for many years now. It's worse when you saw the ridiculousness from the inside, voiced your concern multiple times, then concluded your only option is to leave after you kept getting marginalized. The WSJ journal gets this 100% right. Strange few years of my software engineering career and so glad I moved on.

Embedded in this is the workers no longer trusted leadership. It is a joke for a leader in GE to have a meeting with the employees. They are not respected nor trusted. Good news leadership is mainly coming from the outside, but not going deep enough. Everyone in the LP and SP ranks had to be onboard and mangers of the workers supported Predix. Now they are the good workers off as they are only puppets for the senior leaders and support whatever is said. GE needs to get rid of the SP middle managers and no one would ever notice.

PART 2
The team had digital design files—mock-ups of the way the program might eventually look—but nothing running on a real machine to show the longtime CEO.

To former GE Chief Executive Jeff Immelt, the future of industrial companies was in digital. He promised an ‘industrial internet’ that GE would help build for the world.

Supervisors waved away these concerns. One employee was told it was time to “fake and bake.” Designers in Fairfield went to work animating flat visual designs, inserting enough movement to give the appearance, for the duration of one PowerPoint presentation for the boss at least, of an app that worked.

Word came back the next day. Mr. Immelt loved it.

The CEO wanted GE to be known around the world for more than just jet engines and MRI machines, power plants and nuclear reactors. Deep costs, employee confusion and delusions about what it would take to reposition the company for a digital future would make it more difficult to turn Mr. Immelt’s vision into a profitable business, according to former board directors, GE executives and employees.

A representative for Mr. Immelt said funding for the digital business came from cost cutting elsewhere in the company and Mr. Immelt knew building a digital business would be difficult. In response to Mr. Immelt being shown a simulated app, the representative said, “Jeff Immelt also doesn’t know how to design a turbine blade, but he helped build one hell of a jet engine business.“
Mr. Immelt stepped down as CEO in 2017, as GE’s stock began a multiyear decline from which it has yet to recover. The board has since fired Mr. Immelt’s replacement in favor of a new CEO, replaced executives and company directors, and jettisoned portions of its industrial portfolio to focus on reviving its core businesses, including power turbines and aircraft engines.

GE wanted to be known around the world for more than just jet engines and MRI machines, power plants and nuclear reactors. Here an employee works inside a GE power plant in Hungary.

A GE spokeswoman, when asked to comment about this account of GE’s digital ambitions, said “we are focused on our future—strengthening our businesses, serving our customers, and driving long-term value for our employees and shareholders.”

A Massive Experiment

To Mr. Immelt, the future of industrial companies was in software and hard-core computing. Even now, that vision is widely considered to be correct and other industrial company leaders, including those who laughed at GE initially, are increasingly following the same path.

As technological innovation shrank the size and cost of digital sensors, they would be embedded in more machinery of every conceivable type. Huge streams of data would be harvested, not just from smartphones and WiFi-enabled thermostats, but from the massive machines at the center of the developed economies around the world. Data could be captured from gas-fired power turbines, jet engines on passenger aircraft, MRI machines and sonograms, the rumbling diesel-electric locomotives hauling freight across the American plains or down the core of the Indian subcontinent from Delhi to Bangalore.

Mr. Immelt said GE would know best which data to gather and how to interpret their meaning because it knew the machines. Its staff designed and built and repaired them for decades. They knew how they worked, and when and why they failed. Engineers empowered with the right digital tools could begin to learn new things from their own machines, the CEO said. “Big data” would help GE better predict when critical parts in engines and turbines were likely to wear out and break. These applications would run on a GE-developed software platform called Predix, which would reside in a new division: GE Digital.

What might it take for GE to become a software powerhouse? Join the conversation below.
In meetings of the GE board of directors, these grand plans received a blessing of silence, according to people close to the decisions. The board, made up of current and retired business executives and academics, liked Mr. Immelt and didn’t like to challenge him. They appreciated his gargantuan work ethic, his optimistic spirit, and his eagerness to articulate far-reaching visions about the company’s strategy.

A representative for Mr. Immelt, who also served as GE’s chairman, said the board was regularly briefed about the digital effort.
The board tacitly blessed Mr. Immelt’s digital dreams and his plans to stand up a software company inside General Electric, but never decided—much less voted on—a critical question about such a massive experiment: How much money were they going to spend on this?

The Selling of GE Digital

The marketing of GE Digital was just as important as turning it into a viable business, if not more so.

That job fell to Beth Comstock, who had a taste for black leather biker jackets and a gift for lofty rhetoric that belied her quiet manner.

The job of marketing GE Digital fell to Beth Comstock. She had molded her own brand as a change maker who was rethinking the American icon.

Ms. Comstock had spent her career in media relations, rising through NBC to the corporate parent, when Mr. Immelt tapped her to be GE’s chief marketing officer in 2003. The company hadn’t had such a position for two decades. She rose to become a vice chair of the company, molding her own brand as a change maker who was rethinking the American icon. The digital operation was no different.

A series of broadcast television spots introduced a young computer programmer, the titular Owen, who informed increasingly perplexed groups of his friends and family that he had taken a software coding job—at General Electric. The Owen ads spoke to some of the truth of GE Digital.

Notwithstanding some claims that GE was making to investors about its success in luring young programmers away from jobs at Facebook or Apple, in fact, outside recruiters said, the response in Silicon Valley had been not unlike Owen’s fictional brunch table.

In time, “digital” suffused the company’s vast marketing operation, the adjective having swollen to crowd out all others in everything from Mr. Immelt’s public speeches to Ms. Comstock’s PR work.

The communications office revised the boilerplate attached to every press release, the corporation’s description of itself, to pronounce GE the world’s first “digital-industrial” company.
Ms. Comstock declined to comment.

PART 3

Mr. Immelt proclaimed in 2015 that GE would be a “top 10 software company” by 2020, with $4 billion in annual revenue from its new Predix software alone. GE Digital reported revenue of $3.6 billion in 2016, largely from operations in its industrial units, and targeted $15 billion by 2020. But the pledge to turn General Electric into a major software company was slightly more challenging than Mr. Immelt had made it sound.
Some executives at the company thought the obvious answer was to form a partnership. There were already massive, global companies that for decades had been building a software infrastructure to host and influence virtually every aspect of human life, communication, and business. Google. Oracle. Microsoft. Amazon. GE’s knowledge of the machines it made and the needs of its customers was unmatched, but that didn’t make it the most obvious candidate to construct the scaffolding of code on which the “industrial internet” would rest.
GE first launched Predix in 2013, calling it a “first-of-its-kind industrial strength platform that provides a standard and secure way to connect machines, industrial big data and people.”
It was perhaps telling that as GE rolled out a product it claimed would change the way industrial machinery and major economic sectors operated, the company’s executives couldn’t even agree on how to pronounce it. Mr. Immelt extolled the potential of a product he pronounced as “Pree-dix,” sometimes then turning over the microphone directly to an executive whose version sounded more like the verb “predicts.” GE Digital was on track to spend $5 billion by 2016, according to people close to the operation—a massive sum even by GE standards, equivalent to about half the R&D budget for a new, clean-sheet jet engine.
Saluting the Flag
GE didn’t just pour money into Predix—it smothered the project with cash. But without a coherent strategy and well-thought-out processes, the product development path was a wasteful one, according to former executives at GE Digital and corporate headquarters. GE’s plan to move fast, produce a viable product, and then perfect it in the field got bogged down partly because of the size of the effort. GE hired armies of new employees and gave them all the resources they wanted to build its vision. It was like an auto company building an assembly plant, hiring workers, and leaving them standing on the production line, waiting for the vehicle to be designed.

GE’s plan was to harvest streams of data from the massive GE machines at the heart of developed economies around the world. Pictured here is a magnetic resonance imaging, or MRI, device made by GE.
PHOTO: NELSON CHING/BLOOMBERG NEWS
Instead of charging a small team with developing the best product and then letting the operation grow with the product’s evolution, GE set up a huge organization that wasn’t quite needed yet. Development was often paused or delayed to start the process over entirely or just to stabilize the systems. Leading executives said the digital operation was designing custom software for individual customers—inverting the usual industry model of engineering a single piece of software that can then be sold and resold, recouping the cost of its design and reaping profits.
Inside GE, there was pressure from corporate management to use the software and to show results. While some divisions were hesitant to commit to adopting a software program that needed a lot of work, others were quietly going in a different direction to develop their own software tools. Mr. Immelt pushed back on those business leaders, exhorting them to stop complaining. As one executive said, “There was a lot of talk of saluting the Predix flag.”
Naturally the marketing and sales teams were concerned that potential customers would see that GE wasn’t even using its own software. A representative for Mr. Immelt said he “felt GE could only be successful by reducing duplication and building scale.”
Squadrons of salespeople had been deployed to sell the vision, but what customers wanted to see was the proof behind the concept. However, there was little to show. Once again, the marketing was ahead of the product. In fact, the sales teams weren’t even entirely confident about what their product could do, according to former executives. Instead of hawking GE’s lineup of products and services for a given market they knew, they pitched customers on a deep analytic software platform that was hard to understand and harder to explain.
No Turning Back
As the problems deepened, it appeared to executives that no turning back would be allowed. In a meeting of GE senior executives, one questioned whether it even made sense to move forward with Predix. Mr. Immelt fumed at the suggestion of abandoning the work and quickly nixed the proposition, making it clear that the direction wasn’t up for debate and the marching orders were still the same: go build it.
GE wanted the system to work with everything, so customers around the world could just connect to GE equipment and go. Engineers were concerned, however, that even though Mr. Immelt and upper management were sold on the Predix idea, management’s lack of understanding of software development would hold back its growth. GE also planned to build its own data centers.
The idea was to have a GE-owned and -operated cloud for its customers’ data, but building such an operation from the ground up would be hopelessly slow to achieve and wildly expensive. Besides, companies like Amazon and Microsoft were already pouring billions into providing just such services to other businesses. Why would GE, arriving late to the business, try to duplicate their offerings?
There was also the simple problem of trying to put a lot of things on the same platform. Engineers found that the tiny sensors in GE’s machines produced tons of data, but since they used distinct coding on systems spread throughout GE’s global businesses, putting everything on the same platform made the functioning of the apps excruciatingly slow.

Once Larry Culp became CEO of GE he sold part of the digital business and named a new CEO to turn it around.
PHOTO: GENERAL ELECTRIC
At the same time, GE’s venture capital operation bought stakes in companies that developed various tools that could be used with Predix. The deals added new capabilities to the division, but they also made the conglomeration of Predix’s code even messier. The result was software with plenty of bugs, a difficult user interface, and none of the requested features.
Finding itself unable to compete, GE would eventually shift its strategy. After Mr. Immelt left GE in 2017, new CEO John Flannery quickly declared that GE Digital would be more focused and only work in industries where GE was present. Mr. Flannery was fired in 2018 and his successor Larry Culp sold part of the business and named a new CEO to turn it around.
The company doesn’t currently disclose financial results for the unit. Earlier this year, Mr. Culp said the digital business was “getting close to break-even.”
— Adapted from “Lights Out: Pride, Delusion, and the Fall of General Electric,” written by Wall Street Journal reporters Thomas Gryta and Ted Mann. The book is to be published by Houghton Mifflin Harcourt on July 21. Copyright © by Thomas Gryta and Ted Mann.

SOURCE:

• Archived

http://archive.is/s4p0P

• Original (Paywalled)

https://www.wsj.com/articles/the-dimming-of-ges-bold-digital-dreams-11595044802