Immelt advises Korean conglomerates to innovate

The chief of U.S. industrial giant General Electric, a globally renown master of change, advised Korean industrial giants to seek innovation, not to fear digital disruption. 

“(For innovation), Korean (industrial) conglomerates need to be more decentralized, more digitalized and more partnership. Those are we have learned while going through the transformation (into a digital industrial giant),” GE chairman Jeffrey R. Immelt said in a press conference, held at the Plaza Hotel Seoul on Friday.

Immelt added GE, once accustomed to centralization and control, learned that it is critical to become a part of the business ecosystem for success.

His hands-on experiences for innovation of an industrial giant echo out loud in a time when Korean conglomerates, based on traditional manufacturing businesses, feel the pinch from the digital revolution.

The head of the world’s largest industrial conglomerate, with $149 billion in sales in 2014, initiated bold changes in GE’s business portfolio and operations in 2011, with a vision to transform GE with a sprawling manufacturing business portfolio into a technology-driven, digital industrial giant.

Simply put, a digital industrial company offers data-driven digital solutions for productivity improvements of an industrial company.

He set a detailed sales goal in the firm’s digital business last year, saying GE seeks to become one of the top 10 global software companies by 2020, generating $15 billion in the sector.

The chief of GE also underlined the importance of the focus on the market and customers out of the office in seeking changes.

“For transformation, it is critical for a leader to be strongly external-focused,” saying where the market and customer are going have driven changes at GE.

He considers taking a risk for innovation a life or death issue for survival in an environment of low growth and high volatility. 

“I would say the biggest risk of ‘today’ that any company in the world can take is doing nothing and standing still,” Immelt stressed.

“The biggest risk is to lose the market share, market position, to lose my share with our customers.”

Besides his insights on innovation and changes in the industrial sector, he touched on the business in Korea with a 40-year history.

“I consider Korea not only a market for GE, but also a global test bed for good ideas,” he said, adding he tries to find business opportunities and ideas for additional investments whenever he visits.

During his latest visit this week, he attended the “GE Innovation Forum 2016,” an insight event organized by the firm’s Korean unit. Also, he had a series of business meetings with Korean CEOs from different sectors ranging from aviation to energy.

He said he is satisfied with the company’s extensive presence in a variety of Korean markets, and hinted GE will enhance partnerships and presence in the tech-driven new energy sector Korea capitalizes on as a new growth engine. 

By Seo Jee-yeon
(jyseo@heraldcorp.com)