What is fastworks ge
Case Study: How General Electric Saved 80% in Development Costs
Transport: Using lean startup, GE developed and commercialized a new engine based on regulatory changes brought on by the EPA. It got to market 2 years before its competition, not only resulting in significant cost savings, but bettering the EPA’s requirements. This positioned them extremely well with customers, gave them first mover advantage.
Energy: GE developed a gas turbine which enabled it to deliver the most efficient, low cost energy solution it could to customers and it decreased development costs by 60% by doing so!
In its Industrial business GE:
- reduced time of NPI by two thirds
- reduced time to customer validation by 80%
The latter not only represents a significant cost saving but also frees up NPI funds to reinvest into new ventures, rather than over-invest building the wrong thing and scrambling to find budget for new projects. This snowball effect enables GE to explore a much higher number of new innovations and products in a much shorter time frame with much lower expense.
Positive impact on employee morale
In a time when customer churn can cost organizations more than $ 50,000 per person, improving employee engagement and therefore retention is also top of the agenda for most HR managers. Implementing lean startup means that employees are engaged on projects that are delivered quicker and actually realize benefits. This is light years away from traditional, waterfall based "transformational" projects.
The Fastworks process has been embedded into operations.
If an employee has an idea they add it to a growth board and seek seed funding to validate their idea. If validated, then the employee qualifies for additional funding. If invalidated, then things simply stop (stopping anything at GE is also something that was counter-cultural before lean startup reared its head). Now, if a customer says that a new product or feature wouldn't create value for them, the project isn't pursued. Makes sense, in retrospect.
I often hear leaders from regulated organizations say that "it's impossible for us to implement lean startup - it's too risky, we're so regulated."
The fact is that lean startup is a de-risker.
The cost to go to market with a regulated product is higher than normal, given the compliance requirements and checks that need to take place.
“Using lean startup allows us to mitigate risk before putting things to market - it is a risk mitigant that applies across our healthcare, transportation, finance businesses (and so on)”.
By testing quickly, we are taking lots of small bets rather than few large ones and only going to the regulator with products that we know our customers have an appetite for.
Australian health insurer Medibank tested appetite for its Gym Better product by sending employees out to a busy shopping strip in plain clothes with iPads trying to sell a fictional product under the guise of a fictional company to passerbyers and gym goers, purely to gauge customer interest. If somebody wanted to buy on the spot they were simply reminded that "sorry, this doesn’t actually exist but thanks for your cooperation - here’s two movie tickets!"
This approach cost much less than jumping through regulatory hoops and putting a product to market that there is not enough appetite for.
“Look at the level of disruption that's happening in our industry. It's unprecedented and it's happening today. If we don’t change we run the risk of becoming obsolete in less than a decade. " This is the reality that’s communicated to influencers at GE to inspire their jumping on board the good ship lean startup.
We make it clear that “this is not an initiative, this is a fundamental way we are changing how we make decisions, how we work together, how we align with customers, how we hold eachother accountable”, says Semper.
Remote teams are a nature of the beast that is GE.
The company created a Fastworks site within GE where methodology, proof points, stories, tools and coaching resources are available. Digital training is also being rolled out to move this way of thinking beyond just project team.s.
On startup culture, Semper says that GE has learned two fundamental things:
- Startups are extremely purpose driven and have a strong connection to the company
- Dedicated co-located teams achieve amazing things
She has been exploring ways to replicate these startup traits within GE.
The underlying message is clear - if an organization the size of GE can implement lean startup, then chances that your organization can too.
2021 K-Startup Grand Challenge
Collective Campus has recently partnered with the K-Startup Grand Challenge 2021 to support them in connecting with the Australian / NZ Startup ecosystem. Australian startups interested in expanding business in Asia are strongly encouraged to apply!
22 Ways to Get Buy-In for Corporate Innovation
This report draws on our work driving change at large companies as well as from thought leadership in the space of not just management literature, but also evolutionary biology, psychology and sociology, because in order to see things clearly and influence human behavior, we need to think holistically.
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