Innovator Interview: Barbara Daniele, General Electric by futurethink

Barbara Daniele

SVP & General Counsel GE Capital, Americas

the innovator’s interview June 2009

The Innovator’s Interview highlights unique innovations from a wide range of industries, and is an opportunity for futurethink and some of today’s leading innovations to share insights and ideas.

the innovator’s interview

Barbara Daniele the background

This Innovator Interview series highlights leading innovators at Fortune 500 companies. In contrast to past interviews, focusing on a single innovation, this series examines the state of innovation at global organizations. We spoke with both innovation leaders and practitioners, within varying business units and organizational structures, across a broad range of industries both for–profit and not–for–profit. The interviews offer a unique insider’s view into the world of innovation—what makes it work, what holds organizations back, and what critical advice new innovators need to know to be more successful with innovation overall.

the interview futurethink had the pleasure of interviewing Barbara Daniele, SVP and General Counsel for GE Capital, Americas. A lawyer by training and innovator by experience, Ms. Daniele shares how legal innovation happens, why accountability matters, that recognition is the best reward, and how innovation with no budget at all is absolutely possible.

You have an interesting background for an innovator. Are all lawyers as ‘innovative’ as you are? I am the General Counsel of a financial service business that is called GE Capital Americas. This group provides lending and leasing across all of the Americas in all kinds of different products and spaces. And how does innovation play into that? Well, we are reinventing who we are and our go-to-market strategy. We’re taking a critical eye to the kinds of products we offer, and the kinds of customers that we believe we can service well. What do you think are the biggest challenges associated with making innovation happen with your group? When innovation is left to be an ad hoc process, it’s less likely to get the focus and attention that it deserves. Regardless of our types of businesses, or our different functions or roles are, we need to develop processes that encourage innovation, as well as recognize it, and track it. You operate in a very heavily regulated industry, how have you tried to build innovation into what you and your team does on a day-today basis? One thing we needed to do was to understand sort of the baseline of what is required when we say ‘let’s innovate’. Whether regulatory or legal, what is the requirement? What is the business goal? Is the goal to reduce cost? To increase speed of delivery to customers? To increase satisfaction, of quality service? The first step is to define what your agenda or your goal is. The second step is to come up with an executable plan. It’s pointless to come up with terrific ideas if you can’t execute on them. And in my

the innovator’s interview

Barbara Daniele view, a part of execution is timely execution.

The third or next phase would be proper resourcing. Do you have the right cross-functional team? It is insufficient if all you have are idea people, but you haven’t brought in your finance folks who are going to be critical, and you haven’t brought in your human resource folks to provide staffing even at a granular level of what you are going to need. Fourth, you need to have agreed-upon metrics and an agreed upon period of time that you will measure success against. It’s critical that you know how you are progressing along your timeline, and, if you’re not progressing in a timely manner, have you made adjustments so that you have full agreement that either the plan has changed or the priority has changed in some regard. And then, finally, you have to go back and measure and have accountability. Unless there’s accountability for particular people who own particular innovation projects, if everyone just has a good intention to be innovative, you’re really not going to get an awful lot done to give back to the shareholders. Let’s talk more on metrics. Let’s say that you were to give a presentation on your innovation program tomorrow. What metrics would you choose to report on, and why? Well, that would be simple, because what I would do is I would go back to the business leader, and in my case the business leader is the Chairman of GE. And he has come out with the primary metrics that he is going to judge the financial service business by. And so, I would say the key thing that anyone who works in innovation should do is align their metrics to the business metrics. I can’t emphasize enough the importance of business alignment.

“I do not believe that innovative teams should come up in isolation with super ideas. I believe that they should be good listeners first of what does the business need to do, either for short-term survival or long-term profitability and success, or to transition into new technology over a threeyear period.”

I do not believe that innovative teams should come up in isolation with super ideas. I believe that they should be good listeners first of what does the business need to do, either for short-term survival or longterm profitability and success, or to transition into new technology over a three-year period. But, you need to align your metrics to that business plan. What are some of the metrics that you use? Return on investment would be a key metric for us in determining whether or not the transactions that we are funding and supporting are good transactions for the business and for our shareholders. So, since that’s a key business metric, that would also be a key innovation metric. Along the same lines, what’s the number one indicator of a healthy innovation program? What really says to you that your team is doing a good job with innovation? I think there is something that’s hard to measure, and then something that’s easy to measure. The thing that’s easy to measure are the value of the projects that are completed. The non-measurable piece is the energy, the enthusiasm, just how proud people are that they are coming up with truly significant and innovative projects that they’re

the innovator’s interview

Barbara Daniele accomplishing. Do they feel great about their job? Historically, lawyers might have been perceived as people who read the rules, read the law, and then interpreted the law and just sort of followed a statute that was already written. And that doesn’t sound very innovative at all. In fact, what we should be doing—and I just put this in my own goals and objectives for the year—is abandoning, re-looking at outmoded ways of providing legal service and outmoded legal models and coming up with a new way to do the same thing, maybe faster, cheaper, easier. The law may be static, but how one delivers legal service is a very dynamic opportunity for change.

Is that mentality or that vision something that you’re trying to spread throughout your team? Absolutely. I’ve made it clear to all the men and women I’m privileged to work with that we do a lot more than transactions or writing loans or leases for customers, or considering what the FAA rules are. What we need to be doing is bringing a sense of leadership to our business teams—and part of that leadership is having an open perspective and innovative approach to how we do our jobs.

“What we should be doing is abandoning, re-looking at outmoded ways of providing legal service and outmoded legal models and coming up with a new way to do the same thing, maybe faster, cheaper, easier.”

How do you support your team and move innovation forward? Well, in GE, we have different roles in innovation; one of the roles that we encourage is to be a champion of an idea or a process. Whether it’s diversity or it’s customer satisfaction, we have people who will champion certain things. And even though I’ve never been formally trained in innovation and I don’t have an innovation title, I consider myself the champion of the legal group’s approach to innovation. One of the things we did in 2008 with great success was something called the Competition Challenge, because I wanted to put some fun behind innovation, and I wanted us to innovate doing not just individual small tasks, but really big, impactful tasks. For the Challenge, we put together 10 different teams surrounded and aligned to P&Ls, and they got to choose what was one of the critical needs of their P&L, and then they came up with a giant project that lasted an entire year, and they executed on it. And then, we had all kinds of fun judges to come in and ‘reality-show style’, get different ideas voted off the island. While all groups had to execute their idea and used the collective input from other teams and the judges, we had the teams compete for ‘best idea’ overall. We had a prize at the end, and we publicized it and we made it feel like fun, that it wasn’t just one more job to do, but this was something that could develop healthy rivalry between people who were already colleagues and friends. And is that something that teams had a hard time imagining – seeing themselves as innovators? No, they didn’t find it difficult. I found that, because we had laid the groundwork in prior years, there was tremendous buy-in and enthusiasm from the 120 lawyers globally who participated. The way we had laid the groundwork in earlier years is through what I call ‘growth awards’. And one of the particular growth awards that I recognize is for outstanding performance in innovation and imagination. As a result, our team was used to seeing members, colleagues of theirs, members of

the innovator’s interview

Barbara Daniele the legal department being recognized quarterly for their imagination and innovation. So, that was already considered a desirable trait inside the legal community. In addition, we have, for several years, been tracking what we call growth projects and what we describe as Lean or Simplification projects. So, this was an important step forward in that these were now going to be big, giant projects that 20 people or more could work on at a time.

I see. Did people willingly participate? Or do they need some incentive? To get people’s heads into the game, we had a full-day meeting where we trained all of our lawyers globally. It was our first meeting in three years because of T&L constraints. And we brought them all into our offices in Connecticut, and we did a full day of training on innovation as a skill. All day long we had economists and we had people from media, and we had a fashion designer who was on the cutting-edge for design and creativity. We brought in all different disciplines to make the point that the discipline that you work in is not the constraining factor. You have to actually be innovative to learn how to be innovative. You have to work at it like you would work at learning how to be a communicator or any other skill that you wanted to develop. How do you select which ideas to invest in and move forward with? What are the main criteria that you use? The primary criteria for what to work on is how much of the business impact it will have. Is it aligned to what the business wants to do? One of the criticisms that Legal is subject to is that we’re doing things that we think are very good, to be obedient to the law, to be compliant with regulations, but the business doesn’t see the direct financial benefit to doing those things. And so, it’s either resisted by or ignored by the business. So, one of our criteria in project selection became: In the realm of Legal and Compliance, would this idea be appreciated by the business? Would it be something that the business would say, “That is such an improvement, that makes my life so much better, that makes me so much more profitable as a business.” What are some “quick-win” tactics that you think people might implement in order to build traction and momentum around innovation? Well, I would suggest that you get the buy-in from your business leader, or someone very senior in the organization, and have him or her participate in reviewing the innovative ideas, because lots of people will be happy to work because it’s the right thing to do and they all feel proud of their accomplishment, but it’s an extra carrot. It’s a quick win if, at the same time, they know that someone who’s very important to their career will be reviewing the output. And so, that will motivate them to a level of excellence that sometimes is in addition to just their own pride of workmanship. How do you go about really maintaining energy and enthusiasm around innovation within your team? I have sub-champions. We have a website where we can post our ideas, and you don’t have to come up with your own uniquely innovative idea. It may be innovative for your business, but you’ve never developed it

the innovator’s interview

Barbara Daniele in your business. So, you can go to the website and find out what were the obstacles, what was the learning, has someone else started already so that you could just start from where they’re starting, join their group, whatever, so that’s one of the things we do. We do periodic reports, approximately quarterly, of what progress we’re making, what obstacles we’re seeing, whether people really are participating. I require 100 percent participation of everybody. It’s not, “Do I feel like doing something innovative this year?” It’s where everybody’s going to do something innovative, something that simplifies the business, something that makes us better. Some of these projects we call Nike projects. It’s “Just Do It.” They’re quite simple. They don’t require any money, but maybe they make a contract simpler. Maybe they take out two or three steps in a process. All of those things are a delight to our customers and to our internal clients, and we do a lot of those things. And then, we talk about them when we have Legal Department monthly calls.

And how do you think just being part of GE plays into your and your team’s view of innovation and your drive to successfully innovate? I would say that inspiration for all of this came from the top of GE. We have what we call GE values that we measure every single employee on, and one of those values we had described as “imagination and courage”. So, while it’s one thing to be imaginative, do you have the courage of your conviction to do the right thing as well as to imagine the right thing? When the Chairman said, “We are going to be technology leaders in GE”—and my business is not particularly an industrial business. It’s a financial business. And so, I try to translate that and say, “What’s the spirit of what the Chairman is trying to communicate here?” And the spirit of what he was saying was, well, the next step forward after imagination is innovation. And that’s a universal. That’s something everybody can do. Whether you’re a secretary or you’re the Chairman of the Board, that’s something everybody can do.

“I think curiosity is a natural breeding ground for innovative thinkers. Curious people, I think, are more likely to be innovative. Fearful people who are afraid of losing their jobs, who are afraid of changing anything, are less likely to be innovative, because change could be dangerous. So, people who characteristically embrace change and are curious are sort of, in their DNA, good innovators.”

What do you think makes an individual good at innovation? And do you think these are skills or abilities that one can learn? I think curiosity is a natural breeding ground for innovative thinkers. Curious people, I think, are more likely to be innovative. Fearful people who are afraid of losing their jobs, who are afraid of changing anything, are less likely to be innovative, because change could be dangerous. So, people who characteristically embrace change and are curious are sort of, in their DNA, good innovators. I strongly believe that innovation is a muscle. It is a skill that can be learned by anybody regardless of where you start from. You know, whether you start really having innate capacity in this area or you start having very little innate capacity, everybody can get better. People have aptitude for different kinds of creativity, but they’re just not thinking about it if they say, “Well, I’m not really a creative person.” It just means they haven’t been exposed to thinking about it broadly. Which gets back to training and can you train for this, and that’s why I think yes. Anticipate. Innovate. Future Think LLC © 2005–09 Reproduction prohibited New York NY www.getfuturethink.com

the innovator’s interview

Barbara Daniele

And so, what would be the biggest piece of advice you would give to another organization or maybe another individual who’s charged with innovation that’s really trying to move the effort forward? I would say cause the people that you’re seeking to enlist to feel good about it, to feel that it’s going to benefit them or benefit their business, that you’re not trying to push a string. Let them see that there’s an alignment between their well-being and innovation. It’s not threatening. Innovation does not mean the loss of jobs or the loss of opportunities. It means the converse. It means opportunity. What types of rewards or recognition do you think are most effective in motivating people to participate in innovation? I personally think that the most effective reward is recognition, pure and simple. I don’t think you have to put money around it. I don’t think you have to create plaques. I think recognition is the most important tool. When we had this competition challenge, for example, some of the different teams would essentially get testimonials from their clients or from their business leaders, who would get on video camera — because we’re all spread out all over the world. And the business leaders would give testimonials about how this made it possible for them to make a major innovation in the business. And not only do the people who worked on that particular project feel proud, but the other men and women who are members of the Legal department feel proud about being part of the Legal department. And that good feeling is a primary motivator. How is the economy affecting your innovation efforts? What’s changed? It’s making it more critical, because we can no longer afford to do things the old way. It’s not an option. Even when budgets are reduced, it shouldn’t be an obstacle to innovation. There’s a tremendous amount that can be done to lay the groundwork just by doing things in a smarter way.

the innovator’s interview

Barbara Daniele What can you learn from innovation leaders like Barbara Daniele and GE Capital Solutions? • ‘Innovation inside’ is as critical as external innovation: How much time are you spending on internally-focused innovation vs. externally-focused innovation? Are all the groups in your company— even traditional ‘cost centers’—innovating? • Ensuring recognition mechanisms are in place: How are you encouraging participation in innovation? Are there mechanisms in place to either reward or recognize participants for their efforts? • Innovate regardless of budget size: If you had no budget to innovate but had to come up with 5 new ideas, what would you do? How can you move innovation forward by doing less vs. more?

To learn more about the research, tools and training you need to better anticipate change and move innovation forward, visit us at getfuturethink.com. Anticipate. Innovate. Future Think LLC © 2005–09 Reproduction prohibited New York NY www.getfuturethink.com