Digital Transformation At Scale At General Electric: Digital Influencer Bill Ruh

Author

Jason Bloomberg

July 26, 2016

Founded by Thomas Edison. One of the original twelve Dow Industrials. Number 11 on the Fortune 500. General Electric is unquestionably one of the most successful, familiar industrial brands today.

People generally don’t consider companies GE’s size and age, however, as being particularly nimble or innovative. GE, however, is committed to breaking that mold, as its newest business unit, GE Digital illustrates – its first new business unit in 75 years.

Heading up this new division: Bill Ruh, both CEO of GE Digital as well as Chief Digital Officer of the entire GE organization since September 2015.

Transforming a company with as much inertia as GE is a tall order. What makes Ruh qualified for the job also qualifies him to be my next digital influencer.

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From ‘Spook Stuff’ to Distributed Systems

Ruh began his career in 1984 at MITRE, a non-profit US government contractor. “At MITRE I did ‘intelligence spook’ stuff,” Ruh recalls. “Satellite imaging. I still can’t talk about the systems.”

His work at MITRE gave him hands-on experience with large distributed systems – technology that was in its formative stages in the 1980s. “It was the leading edge of networking,” Ruh says. “We were the first large customer of Sun Microsystems. We bought 500 workstations from them.”

In spite of leveraging advanced technology for the time, Rue struggled with its limitations. “I realized we were just too slow to build this stuff,” he says. “By the mid-1980s I saw the promise of building object-oriented systems.”

Object orientation in the days before the Internet meant Smalltalk and eventually the Common Object Request Broker Architecture (CORBA). “At MITRE, we were big on Smalltalk for piloting and prototyping, as there were no production environments for Smalltalk,” Ruh explains.

CORBA, however, promised to deliver the scalability and reliability that Smalltalk lacked. Ruh left MITRE in 1995 and joined MITRE spinoff Concept Five. He also coauthored one of the first books on CORBA.

CORBA had its day in the sun, but once the Internet took off, Java stole all the attention. “Concept Five was CORBA-focused, but it didn’t make the shift into Java and other technology as fast as we needed to.” As a result, Concept Five failed – but that failure taught Ruh a few important lessons.

The Lessons of CORBA

In its day, CORBA was extraordinarily promising, leading to the first lesson: “don’t fall in love with your technology,” Ruh admits. “I learned the marketplace determines success, not the technology.”

The second lesson: first-hand experience with the Innovator’s Dilemma, where an established firm is unwilling to cannibalize its established market in order to innovate, and thus eventually goes out of business.

For Ruh, this dilemma presented a challenge – the challenge that would define the rest of his career up to the present. “I loved the idea of how to transform organizations,” he explains, “turning a company into something new, focusing on change and education, bringing people along.”

This ambition motivated Ruh as he moved to increasingly larger companies, including Software AG in 2001, Cisco Systems in 2004, and finally GE in 2011. “I was going from a medium to a large organization, fighting the Innovator’s Dilemma,” he says.

When he joined Software AG, it was struggling to expand its market past its two legacy mainframe products, Adabas and Natural. “Software AG built an XML database, and then discovered there was no market for it,” Ruh recalls. “We had a hammer and couldn’t find a nail. I had to say the emperor had no clothes.”

Ruh and his team revamped the company strategy, leading to two key acquisitions. “I helped turn around that company,” he says. “WebMethods and IDS Scheer came out of the work we did then. How to connect legacy to the new world.”

Up next: Cisco. “I received a call to join Cisco at the right time,” Ruh recalls. “They had to expand beyond routing and switching, especially into services and ‘as-a-service’ cloud models.”

In other words, Cisco faced the classic Innovator’s Dilemma. Ruh chalks up his time at Cisco as a success. “Cisco went from being good at a few things to being good at a lot of things,” he says. “It went from $19 billion to $40 billion during the seven-year period I was there.”

Bringing Good Things to GE

Ruh joined GE as Vice President and Global Technology Director in 2011. What he found was an industrial company with a particular focus on analytics. “We had to be the best at analytics on core metrics on our own machines,” he says.

However, Ruh describes the focus on their own machines as a defensive strategy – and GE wanted to go on the offensive. “GE would help customers be proficient on all machines, not just GE’s,” he says.

This expansion of GE’s analytics across all of its business units as well as customer locations led to the formation of GE Digital – a harbinger of a transformative strategic shift within GE itself. “As GE transforms itself to become the world’s premier digital industrial company, this will provide GE’s customers with the best industrial solutions and the software needed to solve real world problems,” explains GE Chairman and CEO Jeffrey Immelt. “We are building the playbook for the new digital industrial world.”

This digital playbook centers on the Predix platform, a cloud-based platform-as-a-service that enables industrial-scale analytics for asset performance management and operations optimization. For Ruh, however, it is the culmination of his career-long interest in scalable distributed systems. “Predix is an operating system for the whole world, existing customers, and internal use,” he explains.

To make such an ambitious vision a reality, GE is executing on what Ruh calls a “digital thread.” “We connect engineering, manufacturing, supply chain, maintenance, services – which exist in every industrial company, including GE. These had been disconnected. What we’re doing is connecting them.”

In fact, breaking down such organizational silos or islands of automation is essential for any digital transformation effort – only with GE, everything they do is at a massive scale. “The Predix platform will go from nothing to $4 billion by 2020,” Ruh predicts. “GE Digital will hit $15 billion by 2020 plus $1 billion in productivity gains for internal systems.”

For GE Digital to meet these targets, however, it must help its customers succeed. “Every one of our businesses is helping customers do better with their machines,” Ruh says. “We want to help every industrial company to get there.”

Examples of this digital strategy abound, from locomotives to power turbines. “Customers care about their power plants, not just GE’s turbines,” Ruh points out. One customer example: Schindler Elevator, known for its escalators as well as its core elevator products. “We’re helping Schindler Elevator offer new services to its customers,” Ruh says, “moving them into building automation.”

GE’s C-suite is clearly on board. “By harnessing our horizontal capabilities including Predix, software design, fulfillment and product management, while also executing critical outcomes for our customers,” Immelt promises. “This is the strength of GE.”

Digital transformation is always difficult, and for any company with the size and history of GE, substantial risks abound. It’s clear, however, that GE realizes the risks of not transforming are even greater. With Bill Ruh leading the charge, GE’s digital transformation is well on its way to being a success.

Intellyx publishes the Agile Digital Transformation Roadmap poster, advises companies on their digital transformation initiatives, and helps vendors communicate their agility stories. As of the time of writing, Software AG is an Intellyx customer. None of the other organizations mentioned in this article are Intellyx customers. Image credit: GE.

 

This article was written by Jason Bloomberg from Forbes and was legally licensed through the NewsCred publisher network.

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