Contrary to popular lore, Thomas Edison didn't invent the first lightbulb. That was Sir Joseph Wilson Swan, a British chemist, physicist, and inventor. Edison simply came up with one that could burn for 600 hours instead of 40, making it the first commercially viable "electric lamp" in history.
For scientists at General Electric's global research facility in Niskayuna, New York, that's more than trivia. It's a guiding principle for Anil Duggal, 38, an amiable chemistry researcher who is trying to pull off an Edison-like feat. Duggal and a cross-disciplinary team of scientists at the center want to develop a new kind of electric lamp using an emerging technology called organic light-emitting diodes (OLEDs), most easily thought of as light-up plastic.
Why? Call it creative destruction. Or, for the slightly more jaded perspective, call it a Hail Mary pass to salvage the iconic but struggling GE Lighting business (now part of GE's $14 billion consumer and industrial division). In 2002, it lost all of its Home Depot business to rival Philips. That single defeat wiped out a full 7% of the unit's annual sales. Business hasn't improved much since. And in a commodity line such as lighting, Duggal's work also fits in nicely with CEO Jeffrey Immelt's push to foster innovations that let GE widen its margins with hard-to-copy products rather than competing on incremental improvements and price.
What's most striking about GE's renewed interest in innovation is not so much the technologies themselves, but how the company gets them from lab to market. "As a scientist, you have to figure out what makes this place tick. And it's not just technology," Duggal says of GE's research center. "If you can't sell a project, then you're going to have a hard time here." So OLEDs may not be GE's most cutting-edge research project — that might be its nanotechnology or molecular-medicine efforts. But it is a technology that may one day save GE's flagging lighting business by, ironically, driving a stake through the lightbulb as we know it. So OLEDs provide an intriguing window onto how the company integrates long-range research into today's strategic planning and how new ideas get through the system without getting thwarted, blocked, or worse. How do you usher in a game-changing innovation that's years away from completion? Here's GE's shot at solving one of the oldest problems in business.
OLEDs are organic versions of LEDs — the stuff that makes our cell-phone buttons light up — with a couple of key differences. For starters, instead of emitting a single bright point of light like LEDs do, OLEDs produce a patch of light over a wider area. Second, OLEDs consist of a thin, flexible, plasticlike material, unlike LEDs, which are fabricated as rigid semiconductor chips — a process that would be laughably expensive for general lighting. Duggal hopes that the thin material will one day be printed using a cheap roll-to-roll process, as newspapers are. That flexibility opens up a range of imaginative possibilities, from lit ceiling tiles that would replace fluorescent overheads to illuminated curtains.
Duggal began to take serious notice of OLEDs about five years ago. As a chemist in corporate R&D, he had a general interest in the technology as far back as 1989, when it was pioneered at Cambridge University. It wasn't until scientists showed that OLEDs could produce a white light, spelling opportunity for general lighting, that Duggal's interest was fully piqued.
"Every year, OLED performance was getting exponentially better," he says. "One day I started plotting lines on a piece of paper showing this exponential growth, comparing it with conventional incandescent and fluorescent lighting technology. And you could see the lines start to intersect. So I'm thinking, If we're a lighting company, there's both an opportunity and a threat here. This is a technology that could overtake us, and suddenly our own lighting business becomes meaningless."
Inspired (and frightened) by his sketch, Duggal began chasing some seed money within the company to see how OLEDs might fit in with GE's existing businesses. He was able to convince a handful of executive managers at the lab, and he got the money he needed to start. But to boost the project's initial funding and its staff from just Duggal to a team of five, he enlisted the help of Greg Chambers. At the time, Chambers was one of GE's business program managers — a liaison between the global research center and one of GE's business units. Together, they secured a grant from the U.S. Department of Energy to study OLEDs as an efficient lighting alternative.
When Immelt took the reins in 2001 with a renewed focus on innovation, Duggal knew that this leadership change was his opportunity. Under Jack Welch, who considered investing in new technology to be a "wild swing," OLEDs would have likely remained a side project. Now they could be a full-time calling. It became a matter of Duggal building support for the technology among scientists and engineers as well as the marketers and sales forces in the business units. "They said, 'Yes, we think it's important for GE to be in this,' " says Duggal.
When it came time to present OLEDs as a candidate for advanced technology funding, Chambers quips that he went in and told his bosses that "GE should invent a new lightbulb every hundred years or so."
Turns out, he was only half joking. While the OLED market for displays in products such as cell phones is a crowded and competitive one, with at least 25 serious players chasing it, nobody but Philips and Sylvania seemed to be going after the general lighting market. "A lot of low-hanging fruit is still available in lighting," Duggal told people at GE at the time, referring to the relative lack of competition. The project won approval as an advanced technology program, one of six, and as a result, its funding increased into the millions, and the staff grew to 30. "The places that we've decided we can take a pretty long-term look and take on a fair bit of risk are in what we call 'sustainable industries,'" says Scott Donnelly, senior VP for corporate R&D. "I have a very hard time thinking that people aren't going to need energy 20 years from now."
OLEDs still face a long road. "You may start to see OLEDs showing up in niche architectural lighting in 8 to 10 years," says Kimberly Allen, the director of technology and strategic research for iSuppli/Stanford Resources, a market research firm. "But you won't see something like flexible lighting for 15 or even 20 years." In fact, Allen says, the size of the OLED market for general lighting is impossible to forecast because so many technical questions remain unanswered.
This isn't news to GE. Proving commercial viability becomes more important as OLEDs develop. Scientists do their part through a process called "toll gating," in which they incrementally tackle risks that a promising technology will turn out to be a dud. Right now, Duggal's team is at work on improving the brightness and duration of OLED lighting. In March 2004, they successfully demonstrated that their prototype could match a standard incandescent bulb's light output. But the ultimate goal is to produce an OLED about seven times better than that, superior to even fluorescents.
The other major hurdle is solving the production problems that would let you print OLEDs as you would a newspaper. OLEDs need to be hermetically sealed to work. Today that's accomplished by sandwiching the OLED material between two layers of glass. That's why it's premature to talk about roll-to-roll production. "In a way, those lines I plotted that showed the potential of OLEDs were deceptive, because there were things missing — like manufacturing," says Duggal. "These are challenging problems. But we can either be scared by them or find a way to work around them."
While Duggal's team works on those issues, a business unit's sales and marketing teams gather input about the technology from likely future customers. The net effect of this dance is that a technology must continually prove its market mettle if it hopes to continue along GE's path from lab to market. In theory, that means no new GE technology will hit the market unless there are customers already lined up.
How then does a technology like OLEDs not get lost in the strategic shuffle at a behemoth like GE, with $134 billion in annual sales? The answer lies in the company's yearly strategic planning process known as the S-1.
Contained within the consumer and industrial division's S-1 is a category labeled "innovation," under which projects fall into one of two subcategories: big bets and breakthroughs. OLEDs are listed as a breakthrough now, meaning they're still a corporate research project. Once technically viable, OLEDs would likely move to a big bet, where funding and technical development get handed over to the business unit. "If consumer and industrial were to go to corporate with their strategic plan and not have OLEDs on there, Scott Donnelly and Jeff Immelt would ask, 'Why are we investing in this technology if there doesn't seem to be a home for it in the future?'" says Todd Graves, the business program manager who is now responsible for shepherding OLEDs.
The final stage of the development process for a technology like OLEDs comes when consumer and industrial's innovation team — a group created four years ago to smooth a project's transition from corporate research to the business unit — hands it off to the new-product division. The scientists have eliminated all the invention risks. Now another team of engineers transforms the raw technology into a marketable product, a process that typically takes 12 to 18 months, according to Kevin Nolan, consumer and industrial's general manager for new-product introductions.
Duggal realizes the challenge of ever getting that far. "It's very possible that OLEDs won't work," Duggal says coolly. "Of course I'd be disappointed. But if I wanted something easy, I wouldn't have taken them on. As a young scientist who goes into industry, instead of a university, you want to change the world. I think OLEDs are something that can change the world." Edison couldn't have said it better.
Fast Take: GE's Rules for Innovation
Think Like Edison.
Thomas Edison was an inventor out to solve problems. Don't set out to invent new technology merely for technology's sake. Instead, define innovation in terms of a riddle you are seeking to solve.
Big ideas happen at the fringes.
Recruit and retain talent from a broad spectrum of technical capabilities. When big brains look at problems in a different way — for example, physicists taking on chemistry problems — that's when breakthroughs can happen.
Make innovation pay its way.
Business units should pony up for research they actually want rather than headquarters doling out all of R&D's budget, hoping for a breakthrough. Give early funding only to a handful of promising technologies.
Set intermediate goals.
When managing long-term innovation areas, periodically review technical milestones along the way to monitor progress. Prioritize the importance of each technical problem to solve, then chip away one at a time.
Bet on the industry, not the technology.
GE can't predict better than anyone else about when, or even if, game-changing technologies will take off. But by focusing on an industry such as energy, it can place big bets within it in an effort to stay in the lead.
Ryan Underwood is a Fast Company staff writer.
A version of this article appeared in the August 2004 issue of Fast Company magazine.