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How Large Companies Can Innovate

In this blog, I am going to show you how one GE exec (at GE HealthCare Hungary) figured out how to instill a sense of creative freedom among the employees that led to a real burst in innovation.

Dr. Lajos Reich was an Executive Participant in a recent Singularity University session. When he told me his story of spurring innovation at his division at GE Healthcare Hungary, I literally booked an interview with him the next morning at 6 a.m. so that I could capture his story for my book "BOLD" and for this blog. I thought his story was THAT important for you to hear.

Lajos Reich is currently GE Healthcare's Chief Technology Officer in Hungary. On his way to this position, he worked at chief technologies at a small Connecticut firm specializing in lighting, then onto GE facilities in Cleveland, Ohio, Bangalore, India and, ultimately, Budapest.

"I learned a lot," he says. "First of all, the difference between leading a small company versus a large company. In a large corporation it's hard to be nimble, because people are so hard-pressed to do their work, and they're often kept isolated in their own departments or on their own projects, without interacting."

"When I returned to Hungary to take the CTO position, my goal was to foster greater teamwork -- literally to institute a complete cultural transformation."

Since his arrival in 2008, Lajos has not only increased the number of employees at that GE division by 50 percent, he has also dropped the company's attrition rate from 15 percent to 2 percent.  Better than that, under his leadership, GE Healthcare is now responsible for generating 20 patents per year, which is more than any other company in the country.  So how did he do that?

"Innovation is a modality," he says. "Before, my teams were separate. A big part of the change was to move them closer so they could learn from each other. "Here are the two principal things that I did," he says:

1. "First, I started to host a technology symposium every year for all the engineers where they could hear across the divisional lines what they were all up to. Before, since teams did not work together very often, there was a tendency to reinvent the wheel." At last year's symposium 200 engineers gave 54 presentations. "This knowledge-sharing opportunity was so popular that I started a monthly technical seminar series, where people present their work to other GE engineers in a deeper context."

2. "Second, I was actually inspired by your X PRIZE, and I wanted to create a competition to foster creativity. I was also inspired Google's 20 percent time, where they give each employee 20 percent of their time to innovate, no strings attached. So I ended up doing a combination of both in a very risky fashion," he says.

"I decided to create a competition for best innovation, with the prize being a 64G iPad (which, in fact, equaled around one month extra net salary for an average engineer). Rather than offering 20 percent more time, I offered people an entire week to do with as they wished. They could go to the beach, or shopping or even stay at home -- or they could work on an invitation and enter the competition. It was totally up to them.

"Engineers always complain that they do not have time to innovate. That there's too much documentation. They tell me that 80 percent of their time is spent on documenting rather than creating. So in this one-week competition I said: 'No documentation; just focus on creating and innovating. Do whatever you want. If you want to use your time to develop a prototype, great.' I gave them access to every resource and didn't disturb them with any last-minute meetings. They were totally free."

Lajos had conducted this experiment in innovation without letting his supervisors know and, should it have been a failure, he could easily have been sacked, he says. But the results were staggering.

The upshot: No one took any time off to go shopping or to the beach. The engineers formed 13 groups and came up with 13 different prototypes. Lajos created a one-day symposium to present the ideas. The management team selected the top three for awards, and six of the 13 have led to patents, with one or two of those products actually likely to become a marketable product for the company.

Many companies would not take the risk of giving engineers a whole week to innovate, Lajos says, "but a concentrated time does make a difference. They are not taken out from the flow of the idea, they can fully concentrate on it."

In my next blog I'm going to explore Lajos' steps for unleashing creativity.

NOTE: As always, I would love your help in co-creating BOLD, and will happily acknowledge you as a "contributing author" for your input.  Please share with me (and the community) in the comments below what you specifically found most interesting, what you disagree with and any similar stories or examples that reinforce this blog that I might use as examples in writing BOLD. Thank you!
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Great story. Thanks for bringing it to us.
Great! I think companies have to use time better. Often there's "no time". But you can't say there is no time, it's all about priorities. Then I think it's better reformulate the sentence "take the risk of giving... " to "take opportunity" etc.. Thank you for a great article. 
This is a fantastic example of what can happen when people have the opportunity to unlock their creativity and subconscious brilliance when they aren't on a rigid meeting and tactical schedule. Ideas need time to integrate, flow and come forward - that's why it's so easy to get lost in the creative "space" for hours on end. It's wonderful these engineers were given the opportunity to answer their "why's" and "what if we tried this" questions - their fulfillment and pride must be soaring. Congratulations to Dr. Reich for taking the risk.
I find this very interesting. As a former corporate employee I can attest to the fact that there's very little interaction between departments. And when there is interaction, it's forced. And then when it's forced, it's no wonder we never see eye-to-eye.

Now an entrepreneur, I fully understand and respect the free flow and exchange of ideas. Without other people's ideas and experiences, I wouldn't be the man I am today. I think that innovation on a large scale comes from very small (but significant) changes such as the ones Lajos and Google and other people and companies have made.

Thank you Peter for bringing this story to us. I greatly appreciate your perspective.
Smart and bold man! Kudos to him. Thanks for sharing the story.
It also boost moral and loyalty for the company
Great story!!!  More questions than thoughts at this point.  When did he do this? Has he or does he plan to repeat this "experiment"?  In the end of how did "management" react (encourage more? offer more resources?)  How did his small business experience influence what he did?  Or did it?  Has this spread to other parts of GE?  
I worked for a place that had documentions already on each Engineers computers which were designed by each one for differant say proposals or a simple letter. They simply changed a few words and numbers and la la their proposals were dont in minutes.
Its all about team work. In large companies many times people are on same page but don't realize they are. Great technic to get them to work together. Retiered at present time so doesn't affect me but can be useful to others.
Imagine this degree of working together on the level of government, or even a planetary level. The world could change almost overnight.
Great post. A good example of Self Directed work teams.
+Steve Kube You are involved in that process right now, Peter is helping people wake up to innovation on all levels. And I agree I think thinking differently about governance is another example of were we should be thinking Bold.   I believe with in 10 years social media will be creating are leaders, not ivy liege colleges. "Sorry Peter"  And I will be the first YouTube President...
Absolutely right. People are never the people you see in front of you. They are much more. Giving them time and opportunity to unleash the 'hounds' within would catch lot more success than you thought was possible with your employees
I learnt two lessons from this article and innovative process; trust leadership from Lajos and trust followership. What this portends is that as leaders we must demonstrate ability to trust our workers to deliver without supervision while the workers should demonstrate to the leader that they are reliable without being supervised.  I called this TRUST RELATIONSHIP in workplace. Good Post 
This validates the universal truth that we are interconnected with people and nature .........and when there is connection there is creativity
Dear Peter...Thanks for sharing your story. I guess you have to ask the right person to get the right answer. :)
I was in Hungary last year twice. As an entrepreneur I always try to get new ideas across. In Hungary the unemployment rate is very high.
So people will hold on to their jobs, specially when is challenged in a good way, from a "westerner" as Dr. Reich. (mixed with the Hungarian heritage) Integrated thinking in business also as an individual is a must to make a team strong! who does not fit in, will fall out. I have a family of 6, integrating in the family, the kids to become hard thinkers as morally, emotionally, spiritually well balanced people, its comes within. Thanks, for the opportunity to share this with You!
Ildiko Kaszas "Jackie" :)
Great story as always Peter. I wonder what ideas our marketing dept. could come up with to increase sales, if given a "free" week to innovate. :)
It is extremely important that all employees in the organizations are focused on innovation.  

What is very interesting is that employees have access to the market trends and that they take courses on how to do research and development and how to interact with various departments to make new products or processes.
Thanks Fernando .... and especially have access to (almost) all information that is available to other departments, and hierarchy levels. Not that it turns as one boss (actually the head of the department) once told me, "I will give you the information I think you shall have to know!"
Wow, what an inspiring story for those who work in the departments within large organizations who think about innovative contributions.  I think creating the capabilities to share information, share those all important "what if we.....?" questions, and dialogue about possibilities are essential components to remaining fresh.  The support of a company culture is a deal maker or breaker. 
Peter, GE has a history of innovation and somehow I am not surprised by this story comes from GE. Iut it is a great illustration of the need for innovation within big and small businesses and individuals if we want to progress and thrive in life. In large companies, that is a challenge and this story illustrate that leaders play a big role and must take the risk to nurturing innovation. Thank you for the inspiration! 
+Fernando Mendirichaga Of course innovation should be at the forefront for all organizations. However, with this innovation it is important to remain ethical. If innovative technology reduces the number of jobs available to people in a struggling economy, it may not be for the best. Ultimately an organization must ensure that the greatest amount of good possible comes out of innovation.
+Malcolm Manby I like your take on innovation, and the need for education reform. As a student, I understand your approach, and also appreciate your clever use of the letter (I).
Hi Peter,
Wonderful article. I think that the biggest barrier to innovation is job security.Which in itself is a myth. The Montessori system of education which encourages children to innovate around their environment is an interesting example of how "grown ups" too when left alone, free of rules and encumbrances, can be innovative.
Interesting that what worked was combining and tweaking a number of existing ideas - Google's 20% free time, Xprize structure, annual symposium (similar to a TED event), and mini-symposiums to build on the benefits of that and supporting collective intelligence. All of this building on GE's culture of innovation. 
I think one of the most important things about this is the order he created this in.  It is important for all who wish to recreate this.  First he created a new learning environment, he then developed an information sharing network that allowed the people to share and integrate ideas. He then gave them time to innovate.  ALL three are required to be successful.  Most companies do one or two, don't see a great immediate return and it slides into oblivion..
Brilliant and illuminating. The experiment demonstrates how the potential buried in the minds of the  individuals could be brought out and   made to trigger innovative brilliance and  intellectual accomplishment.A S
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