9/25/15, 8:30 AMGeneral Electric exec shares details, slides on open innovation efforts - Innovation Programs - Innovation Leader

Page 1 of 7https://www.innovationleader.com/general-electric-exec-shares-details-slides-on-open-innovation-efforts/

2 5 -, : : 5:

Our partner Brightidea provides seven "musthaves" for big returns on innovation.

See why »

: : 52 1 . 1 ,0

Visit innovation labs, meet with startups, andlearn best practices from your peers.

Details & registration »

2 0 5

Do you need data to help justify, shape, andupgrade your innovation program?

Download our 40-page PDF report »

General Electric exec shares details,slides on open innovation effortsBy Steven Melendez, Contributing WriterBy Steven Melendez, Contributing Writer

While many big companies still utter the words “open innovation”

with trepidation, getting bogged down in discussions about who

will own what, General Electric has been racing ahead. Few

companies are amassing more experience in leveraging the

wisdom of the crowd for novel solutions to manufacturing

problems.

In 2013, the company took to the Internet and challenged

engineers around the world to improve on its design for brackets

that are affixed to jet engines. To get their shot at a $20,000 prize

pool, competitors had to design a bracket that met GE’s strength

and shape requirements and could be crafted through additive

manufacturing. That is, rather than being carved from a block of

solid metal, the parts would be 3D-printed from a titanium alloy

powder, melted into shape with a powerful laser.

FOR CORPORATE INNOVATION, STRATEGY, AND R&D EXECUTIVES Contact | 855-585-0800

Subscriber Login

About

Subscribe

Innovation Programs

Accelerators & Labs

Leadership

Ideation & Prototyping

Metrics & ROI

Trends & Startups

Corporate Venturing

Workspace Design

2015 Benchmarking

More Research

Resource Center

Field Studies

Live Call-In Show

Custom Events

Calendar

MemberConnect

Subscriber Q&A

Thought Leadership

Bookstore

Innovation Firms

Job Listings

HomeHome

Best PracticesBest Practices

ReportsReports

EventsEvents

Peer AdvicePeer Advice

ResourcesResources

ListingsListings

Subscriber BenefitsSubscriber Benefits

Search:Search:

9/25/15, 8:30 AMGeneral Electric exec shares details, slides on open innovation efforts - Innovation Programs - Innovation Leader

Page 2 of 7https://www.innovationleader.com/general-electric-exec-shares-details-slides-on-open-innovation-efforts/

The top prizes would go to the brackets that weighed the least, compared to GE’s existing 4.48 pound

brackets.

“If you are familiar with the aviation industry, weight equals fuel consumption equals cost to our

aviation customers,” explains Dyan Finkhousen, who heads GE’s Open Innovation Center of

Excellence.

The contest received more than 600 entries, with the grand prize

going to M. Arie Kurniawan, an engineer from Indonesia with no

prior aviation design experience. His bracket design weighed just

0.72 pounds, cutting the part’s mass by nearly 85 percent.

“For us, the results were really a seminal moment,” says Finkhousen.

“We saw the sheer power of just opening up in a very constructive

way some of our business opportunities, and really collaborating

broadly with these global expert communities.”

Taking the next step

The company saw similar results from contests in other fields. One challenge, dubbed Flight Quest

focused on a type of aviation problem more familiar to the flying public: predicting flight arrival times

more accurately. GE received more than 3,000 submissions, as teams wrote code to crunch the

numbers and compare their predictions to the competition and to industry standards.

“Then they would go back and train their models, refine, and re-upload,” says Finkhousen. “The winner

of that particular competition beat the industry benchmark by 34 percent, and had no aviation

experience.”

The top entries were incorporated by GE’s global research and innovation teams, which are now

working to produce a commercial product, she says.

The open innovation team at GE

Finkhousen runs a three-person team at GE’s Fairfield, Conn., headquarters that helps other groups

within the 300,000-employee company run those types of open challenges to crowdsource solutions.

“Right now, the team is really comprised of program managers — folks who are very strong in their

consulting skills,” she says. The company plans to expand the team to eight members by the end of

2015 and continue to hire next year, bringing on experts in engineering, materials sourcing, and

product design.

Here’s how Finkhousen defines open innovation:

9/25/15, 8:30 AMGeneral Electric exec shares details, slides on open innovation efforts - Innovation Programs - Innovation Leader

Page 3 of 7https://www.innovationleader.com/general-electric-exec-shares-details-slides-on-open-innovation-efforts/

A ‘translation layer’

Finkhousen’s group forms a “translation layer” between other GE teams and outside specialized

vendors that provide platforms for open innovation competitions, like GrabCAD for computer-aided

design tasks (like the bracket challenge), and Kaggle, a data science network that worked with GE on

the flight arrival competition. Other vendors have included crowdsourced research firm 10EQS,

collaborative hardware design company Local Motors, and open innovation consultancy BigHeads

Network.

“To encourage adoption of the new methodology, we’ve built a consistent, compliant open innovation

process that we use to provide these services to all the GE teams,” she says. “We’ve designed our

open innovation process into a standard open innovation agreement that we can use with all our

vendors.”

That process means first working within GE to figure out the precise goal of each challenge and other

parameters — like whether the campaign will be open to the public or by invitation only, whether GE

will be disclosed as the sponsoring organization, and who will get the rights to the intellectual

property produced.

“In some cases, we may want to acquire ownership of the intellectual property, and in other cases we

may just want to be on a discovery journey, and of course there’s always a range in between,” says

Finkhousen.

One recent challenge focused on helping GE determine its options for sourcing a particular class of

advanced materials that are used in healthcare imaging. Finkhousen isn’t at liberty to discuss the

project in too much detail, but she says the challenge spurred 22 vendors to provide proposals to

9/25/15, 8:30 AMGeneral Electric exec shares details, slides on open innovation efforts - Innovation Programs - Innovation Leader

Page 4 of 7https://www.innovationleader.com/general-electric-exec-shares-details-slides-on-open-innovation-efforts/

supply the product, for which GE initially had only one likely supplier.

GE then gave the top 10 potential manufacturers a budget and a supply of raw material, asking them

to produce a prototype meeting particular specifications for the company to evaluate.

“In short, we were able to expand our supply chain ecosystem for that product roadmap from one

supplier to 22 suppliers, and we were able to qualify 10 of those suppliers with real, physical

prototypes,” she says.

Overcoming skepticism

Her team has relied heavily on members’ sales skills, and a lot of empathy, when it comes to

addressing the concerns that often surround the concept of crowdsourcing.

Those have ranged from engineers wondering whether they’ll effectively be facing outside

competition for their jobs to managers skittish about revealing too much of the 130-year-old

company’s intellectual property and “secret sauce” to outside interests.

“There was a lot of uncertainty regarding the quality of the outcomes,” she says, as well as how the

company could collaborate “with folks around the world you might never meet, in a way that doesn’t

disclose any proprietary information.”

The group also deliberately worked early on with a variety of units within GE that Finkhousen

anticipated would be particularly open to innovative techniques, picking teams from across the

company to help build a diverse portfolio of successful experiments, she says. Before projects even

began, the team worked carefully to make sure everyone was on the same page about goals, from

commercialization of the end product to confidentiality.

Finkhousen talks about building an “innovation stack” within the company; here’s her slide on what

that means:

9/25/15, 8:30 AMGeneral Electric exec shares details, slides on open innovation efforts - Innovation Programs - Innovation Leader

Page 5 of 7https://www.innovationleader.com/general-electric-exec-shares-details-slides-on-open-innovation-efforts/

Creating a collection of case studies

“The results of those early projects became valuable case studies that enabled others to envision how

the tools could help them be more successful,” Finkhousen explains. “Knowing these early proof

points would help other business and functional leaders understand the value, we curated project

types that would resonate with diverse business and functional leaders.”

But as the first successful projects demonstrated the power of expert crowdsourcing, she’s been able

to shift gears a bit from internal promotion to handling requests from corporate divisions looking to

run their own open innovation projects. She also works closely with the company’s lawyers to make

sure that outside participants and GE employees are always clear on the rules of engagement.

“We’re leveraging the same techniques, but our partnership with the business leaders is evolving,” she

says. “As our portfolio of successful case studies and business relationships grow, we’re seeing some

of our thought leaders evolve from sponsoring individual open innovation projects, to investing in a

more sustained and comprehensive engagement of open and collaborative innovation methodology.”

The next step is to help GE’s managers and engineers think of crowdsourcing as a standard item in

their toolbox, not just the subject of one-off experiments, says Finkhousen.

“I see the expert community, the solver community, becoming more and more an extension of the GE

team,” she says. “I think the GE business leaders will increasingly view the communities as flexible

resources that can help us achieve better outcomes [and] that can help us derive better outcomes with

our customers.”

• • •

9/25/15, 8:30 AMGeneral Electric exec shares details, slides on open innovation efforts - Innovation Programs - Innovation Leader

Page 6 of 7https://www.innovationleader.com/general-electric-exec-shares-details-slides-on-open-innovation-efforts/

Enter email address

Related articles you might be interested in:Related articles you might be interested in:

Advice on opening up to innovation from GE’s chief marketing officerHow open innovation led Clorox to a new product lineGeneral Mills shares learnings, pitfalls on open innovation

Share This Article

Here’s video of a half-hour talk Finkhousen gave in June, at Brightidea’s “Birds of a Feather” gathering

in Austin:

Published on September 21, 2015 in these categories: Innovation Programs

Your Reaction

You must be logged in to post a comment.

Get Innovation Leader’s free email updates:

I N N O V A T I O N L E A D E R S U P P O R T E R S

9/25/15, 8:30 AMGeneral Electric exec shares details, slides on open innovation efforts - Innovation Programs - Innovation Leader

Page 7 of 7https://www.innovationleader.com/general-electric-exec-shares-details-slides-on-open-innovation-efforts/

See exclusive subscriber benefits from our supporters

About Contact Help Privacy Terms SubscribeSubscribe

© 2015 Innovation Leader LLC. All Rights Reserved.