Digital Factory Podcast #18: Jeff Immelt


This is the Digital Factory Podcast. I’m
Jon Bruner. Before we get into today’s conversation we’ve got a really exciting
announcement: the Digital Factory Conference is coming back to Boston on
May 7th and you won’t want to miss it this year it’s hosted by Jeff Immelt and
brings in all sorts of incredible speakers including Jennifer Hartsock, the CIO of Baker Hughes; Joe Hogan, who’s the CEO of Align Technology (the biggest
user of 3d printing in the world) Ric Fulop, the CEO of Desktop Metal
which is revolutionizing the metal 3d printing industry and Rob Carter the CIO
of FedEx which possesses the most legendary logistics system in the world
you’ll hear from all these people about how they’re driving entire businesses
with digital manufacturing and supply chain technologies for more information
visit thedigitalfactory.com and when you register use the code PODCAST for a
discount again that’s thedigitalfactory.com. my guest today is Jeff Immelt he’s done a lot of stuff he’s currently the executive chairman of
athenahealth is a venture partner at NEA and of
course he’s the former chairman and CEO of GE where he served from 2001 to 2017
Jeff it’s great to have you on the program John great to be with you so you
and I are collaborating on a very exciting project which we’re announcing
today which is the the digital Factory Conference coming back to Boston on May
7th 2019 you’re hosting that with us so tell us a little bit about you know
you’re interested in this field what’s what’s exciting you about manufacturing
technology yes so John just you know one of the things I wanted to do in
retirement was to continue to pursue a couple of my passions only do it in
partnership with entrepreneurs and using disruptive ideas and technologies to
places that had worked in a lot in my career and you know really cared about
our in healthcare and in advanced manufacturing in both cases
as I see dramatic needs for you know kind of business model and technical
innovation in the case of manufacturing there are more emerging technologies
today than in any time in the past 35 years mmm
Manufacturing has been you know revolutionized by clearly by automation
and by process ideas like lean manufacturing and things like that but
now with analytics and and AI and automation and of manufacturing all kind
of coming at us I think there’s a there’s a real manufacturing Renaissance
that is under weight not just the US but around the world so you know John that’s
one part of it I think the other part of it is that I’ve always had this notion
that if you’re not a CIO hmm it always helps if you know the art of the
possible with digital tools and and in my experience you know kind of than may
the frontline manufacturing leader has you know has had digital delivered to
them but hasn’t had the opportunity to be the actual shaper of their digital
future huh and I think that’s gonna that’s gonna have to change and and I
see that as as the main purpose for the conference so you’re saying a lot of
these manufacturing leaders and supply chain leaders are kind of handed some
kind of Technology piecemeal by someone else in the organization a CTO or
someone but they’re not actually getting a chance to lead that process
strategically themselves it’s exactly what some of those natural and to be
expected right but but if you think about the last generation of digital
tools whether it was ERP systems or mes systems and things like that those were
basically sold in the CIOs office and a really good CIO would know how to
implement it in the factory floor but you know that could it be assumed right
and frequently the handles from missed and and the systems were inflexible and
things like that today when you think about kind of
analytics when you think about machine learning and AI even when you think
about automation you know those are really going to be user driven they’re
going to be driven by the process engineer and not by the CIO and so I
just think the nature of the tools and the the fit for purpose are dramatically
changing and it’s not that the CIO doesn’t need to be involved but you
really have the opportunity for the manufacturing person to be the consumer
of digital versus just being the let’s say being the recipient a digital tools
right right seems like a lot of other you know departments other parts of
these big organizations get digital tools you know pretty seamlessly the the
sales team is given sales force the marketing team is given all sorts of
digital marketing tools but the the implementation of digital tools on the
factory floor takes decades of course because of the you know the amortization
processes for big equipment but also maybe some some cultural stuff you know
I think it’s exactly right like like I think if you’re if you’re a CFO of a
fortune thousand company today you have a pretty good digital foundation because
Finance people for 15 or 20 years have been a consumer and a buyer I think I
think Marc Benioff and salesforce.com really liberated the sales team and then
you have you know all the company’s github I could go down the list of
digital marketing companies and I think manufacturing which is really what
shapes the profit structure for the company the speed the availability for a
company is really kind of the last Dominion of where I think a lot of these
digital tools can take place and I think the other thing I would say child has
said frequently what happens in in the factories is going to shape what the
sales and marketing people can do so the demands for more late point
identification more flexibility lower cost more speed that are required by the
marketplace have to be delivered in a setting that’s not as structured
that’s not as as as kind of one IT system driven but but where you’re going
to have to have more flexibility so one of the things were pursuing in this
conference is the idea that innovation on the factory floor and in the product
development process can drive entire new business models you can do stuff with
customization stuff with your supply chain as you mentioned you know decrease
risk and bring products to market faster and in more flexible ways that’s really
you know driven by the technology itself how do you think organizations ought to
set themselves up so that people from the manufacturing organization can can
bring these ideas to the business side it’s it’s really a great question
in terms of how the tools can be more relevant even as it pertains to sales
marketing and I don’t think anybody has kind of cracked the code for that yet
but one of these we’re going to show in the conference are companies like align
tech rail is really revolutionized dentistry if you will and this is a
company that exists because of additive manufacturing you couldn’t have a
company unless you had the process tool right so you’re going to see examples
like that you’re going to have to disrupt there’s like some of the big
logistics companies like FedEx who who can use now automation and AI to really
get closer to their customers and actually maybe even get in the service
business for the product lines that they used to just be logistics supports for
right so you’re just going to see kind of people that are connecting the dots
between you know what does it mean to make an investment in automation and
what does it mean to guarantee to your because of the automation to be able to
guarantee to your customers shorter delivery cycles more flexible products
things like that so I think one of the things we’re going to try to do at the
conference is connect the dots between technical innovation and business model
innovation and show some companies that are really far along that the
lines of that path right as as someone who’s run a very large and complex you
know manufacturing driven organization yourself what are the other companies
you always have looked at and admired in terms of the ways that they drive the
business with manufacturing so look I mean I would say everybody of my
generation grew up studying the Japanese companies so you know we were we would
always marvel at at kind of lean manufacturing and things like that
I think if you flash forward to today it’s the ability to kind of manufacture
really complex systems so Boeing even automotive companies where you are you
were kind of literally taking sub assemblies thousands of sub assemblies
and and perfecting them with kind of high quality levels have always been
I’ve been very envious of those and I would say those you know those are the
two extremes of kind of like what I would say I admire most today is the
ability to be scale based but still be fast and and and in high quality I think
that’s that’s gonna be key and then you know I think John today if you look at
what Apple has done in the context of consumer electronics if you go to kind
of the Consumer Electronics Show your head just gets filled with you know
kind of the way that technical innovation has has really infused what
we think of as being just kind of mainline consumer products like the like
the cell phone you know I’m really excited to hear from Gary Johnson at the
at the conference he’s the head of manufacturing at Ford oversees all of
the all the production and the labor at at Ford and that is a cool example of a
company that’s just become extraordinarily sophisticated with the
supply chain as you mentioned parts coming from all over the place and if
you visit the River Rouge Factory it’s it’s extraordinary they can produce four
different models simultaneously on a single assembly line
and if you compare that to what the automotive industry looked like a few
decades ago it’s just completely different there’s a there’s a rumor and
maybe it’s irresponsible to speculate but in the in the 80s if you bought a
lot of a lot of cars you’d have a different key for the for the door to
the cabin and the ignition and for the trunk
and this was promoted as kind of a security feature so you can like drop it
off at the valet or whatever my understanding is that this was a
manufacturing reality that the lock tumbler was put in the trunk in a
different part of the factory than the the lock tumblers for the rest of the
car and they couldn’t deliver the trunk lids to the to the car bodies reliably
enough to wind up with the same lock on both so you compare that to today where
you have four different platforms even rolling off the same assembly line
simultaneously and you can see how how sophisticated these companies have
gotten look I’ve always had I’ve always had incredible respect for the
automotive industry in terms of what they do at scale I think the interesting
thing in the conference or the interesting thing that I see today is
just the wave of Technology and how pervasive it’s going to be you know
there’s what I mean is when you look at when you look at where kind of these new
technologies are coming they’re not going to differentiate between big
companies and small companies mm-hmm and in some ways it’s going to allow people
to achieve scale and lower runs than before it’s can allow big companies to
be more flexible than ever before so it’s not clear that that small beats
bigger that big means small I think what’s clear today is that smart beats
dumb you know and that’s you know the people that know how to use these new
tools and skills are going to be a far ahead in the end so in your role as a
venture capitalist where you’re a you’re a partner at any a what kinds of stuff
are you looking at what are you excited about these days yeah look I mean I
think it’s allowed me to kind of continue the passion so one of these I
like or kind of like heck naval services and and mainly in
health care and and you know picture you know I would consider let’s say Google
is a horizontal company ge Boeing we’re vertical companies I
think what you’re seeing today is kind of companies that are supported by
horizontal technology that are able to deliver as a unit of one and and and and
I’m seeing those in health care which is quite interesting and then on the on the
manufacturing side I usually talked about kind of the forays which are
artificial intelligence automation analytics and additive manufacturing mmm
and at any a I’ve had a chance to participate in every one of those
technical areas and it’s quite exciting so in all of those then are you know
really driven by computation advisor to software creeping into the factory floor
yeah well I mean I think it’s kind of a it’s clear that either software or the
output of software being computational analytics are going to be key I’m also
like really keen on things like added manufacturing where you have a materials
flow you’ve got precision components like lasers you’ve got a hardware aspect
you’ve got a software aspect you’ve got a design aspect and if you look at
robotics and some of the other things I think I think people that kind of can do
these hardware software intersections which is rare it really because I think
to a certain extent in you know I’m in California right now people just hate
hardware right they might do well you know if you can combine MIT with
Stanford you’re pretty graceful if you can get if you can get the hardware and
the computational stuff out of MIT into computer science and some of the
software skills and the westcoast right that’s where a lot of these
manufacturing winners are going to come from right right yeah it’s interesting
to see you know I’ve been following the hardware space for for a while now and
saw a brief wave when Google especially
bought up a lot of robotics companies around 2013 when they bought Motorola
around the same time and everyone said all of these software companies are
going into hardware and then they all they ditched these companies a couple of
years later one things is good about businesses when things are hard and not
easy mm-hmm it’s hard to do hardware and it’s even harder to do hardware when
you’d have to blend it with computational tools software things like
that and but there’s going to be a big pot of gold for whoever figures out how
to do that you know and again I you know it’s not a direct analogy but one of
things I admired about uber is is uber a tech company or an operating company
right it’s well the answer is both right so I think to a certain extent the
companies of the future are going to be more systems oriented they’re gonna be
able to do both horizontal and vertical and not one or the other and that’s you
know I think that’s gonna be really interesting and you know again you and I
hope to bring that to life in this conference in May absolutely everyone
can be a tech company now I mean I think that’s a very powerful message I think
you know John Deere has thousands of software developers which is more people
than a lot of you know very familiar tech brands have I’m saying right same
with Boeing or Ford or you know FedEx any of these big companies are really
motivated by technology until very recently they haven’t really talked
about themselves that way but I think one of the things that’s changing is the
value that that the market and that you know customers put on being a
technologically driven company you know and the outcomes it drives whether it’s
in productivity or margins or organic growth of the things that are really
critical for customers and investors and the other people that are in the in the
family if you will Jeff I’d love to ask you the question I
asked everyone on this podcast what’s your favorite tool haha my favorite tool
okay I’m gonna say the elliptical trainer no kidding
so it’s a you know I’ve lived a life of kind of working 100-hour weeks being
away from home 200 nights a year traveling the world high stress high
pressure and for me kind of exercise is the relief valve hmm so when you get to
be my age it’s harder to go outside and run outside and things like that but the
elliptical is the perfect blend of exercise and brainless Ness a 62 year
old really values their impressive machines like these physiologists really
figured out how to how to create exactly the right movement that’s easy on joints
it’s still good exercise right exactly right so whether it’s been in Shanghai
or Astana or Joburg or Paris or New York City or Boston or Mexico City I’ve been
on every elliptical trainer known to mankind if you have you tried out any
any of the new sort of software guided exercise equipment like the peloton bike
or anything like that yeah there’s a there’s a there’s a peloton store here
at the stand from all that I kind of walked in because you can see you know
you can’t miss the ads particularly watch football right and it’s quite
compelling you know the ability to actually have a trainer or to compare
yourself to other people no matter where you are is you know an extremely
compelling idea right right I haven’t done it yet but yeah I find it to be I
find it to be really interesting speaking of you know your routine what’s
what’s a day in the life of Jeff a meld like these days well you know it’s
changed in retirement you have more control a little bit over your own time
I think my goal in retirement was to work almost as hard as I did in my in my
previous life but to only pick the things that I want to do right and so
far that’s so far that’s been good it’s been
you know cash splitting time between Boston and California and really getting
a chance to pick the things I want to work on and I wanted to I would say be
helpful and I think I guess in my own mind the way the best way to be helpful
I think is to try to help this next generation of great entrepreneurs and
that’s really what I want to try to do in the rest of my working career it’s
important too because a lot of the a lot of the entrepreneurs come out of a
software background or a web background and when you start to address these big
difficult problems in the physical world it becomes very complicated and you need
the advice people who have worked in that field right exactly yeah you know
it’s very it’s fun and rewarding I would say all right Jeff it’s been a pleasure
speaking with you today really excited about the the conference we’re putting
together on May 7th and love working with you on it hope to see you soon all
right thanks Jeff I hope you’ll join us in person on may 7th in Boston for the
Digital Factory Conference you’ll learn all about transforming entire businesses
with digital manufacturing technologies visit thedigitalfactory.com to
register and use the code PODCAST for a discount. For the Digital Factory Podcast
I’m Jon Bruner.

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