Mark M Little
Role: As senior vice president and director of GE Global Research, he leads one of the world’s largest and most diversified industrial research organisations and aligns it to the long-range technology needs of GE
It’s not unusual for the oldest and the most diverse conglomerate on the planet to reinvent itself every few decades. In the middle of the last decade, when chief executive Jeff Immelt announced “eco-imagination” and “healthy imagination” as two guiding principles for GE’s businesses, they were greeted with extreme views—some termed it as marketing doublespeak, others called it a gutsy stand that could change the energy landscape. Since then Immelt has been putting dollars where his grit is.
At about six percent of its (industrial) sales, GE’s R&D spending is at an all time high. In January, GE moved its Bangalore research centre head Sanjay Correa, less than two years into his India tenure, back to the US to lead the ceramic matrix composite division. It’s the “single most important” technology that GE is developing today, says Mark M Little, who as the ninth director of 111-year-old GE Global Research drives innovation within the company. The company, he says, is in the middle of digital transformation and a major portfolio redesign. Edited excerpts from an interview:
In today’s economic austerity, many companies have pruned their R&D budget, but GE has accelerated its spending, even opening new research centres. What’s the idea behind it?
We are reinventing our portfolio and making consequential acquisitions. Most of the $11 billion acquisition last year was broadly in the energy space. In healthcare, we were traditionally into X-ray and cascading MR; now we are moving into life sciences, cell therapy and digital pathology, areas which we wouldn’t even dream of in 2004. A big new thrust area for us is software; we are in the middle of digital transformation and are setting up a new centre in California. We are not going to be Oracle or Google, but if we add analytics to our big businesses, it can be transformational for the world. We are creating the industrial internet.
CEO Jeff Immelt recently spoke of improving the margins. Does that apply to GE research too?
For a very long time, we have tried to make sure that our research impacts our businesses. I came to Global Research from the broad experience of energy and the many phases of it. I measure our success very simply as the impact research makes on each of the businesses.
But can you really measure how much innovation here drives revenue there?
In a biz role I measured everything; from order intake to revenue, all through the process of how many purchase orders get placed into the supply chain, down to checking if our engineering drawings were on time. When I came here I thought maybe I should put the same mindset into measuring the activities of researchers. But I gave up because it’s not important. What is really important is we drive the things that our businesses need. Take for example aviation. We are at a unique time when we are redesigning almost our entire product portfolio in a very short time.
The manufacturing technology in the GEnx engine that has just entered the market came from a group in Germany that makes jewellery. That tells you how innovation comes from strange places. Our research team worked on that spin casting technology—a good way to make complex geometries—to be able to use it in making aircraft engine blades. We even set up a factory in Germany to scale it.
The next generation narrow bodied engine called Leap is yet another example that all core technologies for our businesses come from the research centres. The ceramic matrix composite to be used in Leap is a brand new thing. In CAT scanning, a new material called gemstone is being used which brings 75-85 percent cost reduction. That has come from research. So, you see how research ensures that our products lead the market, remain cost-effective and generate margins.
Yet another example: Our whole wind business came from a passionate researcher. Today it’s an over $7 billion dollar business which didn’t even exist in 2002.
Recently GE released the Global Innovation Barometer where 88 percent of the executives said that companies will innovate in ways that are totally different from anything done before. What does that mean to you?
What that means to me is that innovation can be very surprising. I am a 33-year GE veteran. If you had asked me eight years ago if GE would be in molecular diagnostics or digital pathology, I’d say no as it is way outside our domain. But what happened was we got involved in healthcare in a broader way, hired a group of smart people—who are not the traditional high temperature and advanced materials people who do aircraft engines—and coupled them with people who understood how to do optical systems and data analysis on a large scale. Then something magical happened and we had this technology.
Is the India centre driving anything magical?
We have a suite of technologies on a prognostics platform being led from here. We have a dream of having zero unplanned outages in our equipment. Imagine if you are a railroad operator, your train would never breakdown enroute ever. Imagine you are an airline operator and your planes would never have an in-flight issue. If you are in power generation, owner or operator, imagine if none of your turbines ever shut down in an unplanned way.
If we can get the right prognostics tools in place to address any of these issues, we can really change the game and how our customers own and operate our equipment. That can be quite disruptive. We’ve always done a lot of monitoring of engines, but to be able to do prognostics for the whole plane, to enable the customer [airline] to plot smart landings by the pilot can bring huge savings in fuel. This is a brand new area for us.
So is that the biggest bet on the Bangalore centre?
We have many, but I can’t tell you all [laughs].
The Bangalore centre has been developing biomass gasification technology for a few years now, but when is it going to enter the market?
It’s not just the technology; the market has to be ready too. Now the business decision is taken and the commercial pilots will begin in the Indian market this year. After wood chips, it’ll be extended to rice husk and bagasse.
Now it’s often argued that American companies will not innovate in the way they did in the mid 20th century when they had near monopolistic control of their markets and short-term shareholder pressure was less. Do you agree?
We are never satisfied; we are never cocky about our position. We are always humble. We recognise that we have very serious competition that can come from many places. We are always threatened. That said, we are not focussed on quarterly numbers. If you are making aircraft engine, you got to be thinking a decade ahead because the game is played on that time scale. Similarly in life sciences; this area is going to explode. You got be thinking big to stay in the market. From my own long experience, innovation is never a straight line—you don’t go from an idea here to a product there.
There’s always some path you don’t know.
Is the era of radical transformation over? Are we in for more linear innovation?
It’s always some of each. Analytics is going to be disruptive. But we try to be disruptive ourselves. We are working in solar energy and if it can drive the cost down, it can disrupt our traditional energy business, but we are still doing it.
(As told to Seema Singh)