Peter Foss, president of General Electric's Polymerland division, keeps a favorite snapshot in his office. Taken at a plastics trade show in 1997, the picture shows him alongside Chairman Jack Welch. Both of them are hunched over a computer screen, examining a bare-bones version of Foss's now-booming Web site. Foss laughs at how clueless he and his boss were back then. "We saw the Net as a big curiosity," he says. "None of us really knew what was going to happen. This thing has exceeded our own expectations."
There is nothing on the face of GE Polymerland (except, perhaps, its whimsical name) that screams "leading-edge." Its headquarters, in Huntersville, North Carolina, houses rows of standard-issue cubicles. Its 300 employees (managers, operations people, customer-service reps) are straight out of GE central casting: no pierced eyebrows or black turtlenecks here. This is, after all, an outfit that sells plastic pellets — the stuff of which CD cases, toothbrushes, bumpers, and bedpans are made.
But earlier than most companies, and much earlier than most business units inside GE, Polymerland understood a simple yet powerful proposition: that it could use the Web to improve its customers' purchasing experiences. On the Web, customers could get timely, personalized information about products that they needed, or about the status of an order, or about customization services. Indeed, by offering their feedback, customers could shape the entire experience of working with Polymerland. And, by allowing its customers to manage more and more of their interactions with the company, Polymerland would enable its employees to concentrate on building the business — by courting new customers.
The results speak for themselves. Since mid-1997, when the Polymerland Web site was launched, Web revenues have grown from $60,000 per week to more than $7 million per week — and now account for nearly half of the unit's total sales. Foss predicts that in 2001 the site will bring in more than $1.5 billion in sales.
All of which helps explain why Polymerland has become a definitive model within GE — a full-scale, fully operational instruction manual for bringing an old-line business into the online arena. Along with other members of his team, Foss has become a kind of wandering Web minstrel at GE, enchanting audiences from other operating units with his lessons on how to make e-commerce work. At an organization that has arguably set the standard for big-company management, Polymerland represents a standard for Web-based transformation.
Foss, now 57, shrugs off such hyperbolic descriptions. "I'm not going to tell you that we were great soothsayers," he insists. "We didn't do all of this because it was the next big thing. We did it because it seemed like a great way to serve our customers."
E-commerce as If Customers Mattered
Why has Polymerland been able to come so far so fast? One big reason is that Foss and his colleagues focused their Web efforts on what the Net could do for their customers, not on what it could do for Polymerland itself. "I'd like to take credit for all of our ideas, but, frankly, a lot of them have come from our customers," Foss says.
Customers knew what they wanted: speed, security, accuracy. They wanted order entry on the Web to be as fast as it was by phone, if not faster. They wanted control over which people in their own companies had access to certain parts of the system. They wanted a way to track shipments and a way to access information 24 hours a day. They wanted to make sure that what they ordered would match what they got — and that what they ordered would arrive on time. "The number-one quality factor in this industry is getting your product to the customer's door on time," says Hank Harrell, 40, leader of Polymerland's e-commerce efforts. "It's not like you can send 40,000 pounds of plastic by UPS."
In the fall of 1998, a team of IT staffers began upgrading the Polymerland Web site — pruning and adding features in response to customer feedback. By early 1999, the site had all of the power and functionality that one would expect from a topflight e-commerce destination. Using the site, customers could search for plastics by name, number, or characteristic; download product information or fax it to themselves; place and track orders; and view their purchasing histories. The site also made certification sheets (documents that outline the basic characteristics of a particular plastic) available for downloading. Polymerland used to fax out hundreds of sheets every week. Now customers can get them directly via the Web.
"One customer called to thank me after he had been able to retrieve a missing certification sheet for an overnight job," says Barbara Thewlis, 38, a regional-account specialist. "He told me, 'It was long past your office hours, but I was able to find the sheet on your site. You guys kept me from closing down and losing all that time and money.' "
Moving customers onto the Web has also served Polymerland's bottom line nicely. GE estimates that online transactions save the company three to four cents on every dollar, compared with purchases that go through traditional channels — in part because more than 75% of online orders require no human intervention and go directly to a warehouse. (Other GE businesses have achieved, or hope to achieve, equally impressive savings: GE Appliances, for example, has reduced its cost per interaction from $5 to 20 cents by getting people to go to its Web site instead of calling a phone-service rep. The division handles 20 million calls a year. "Do the math," says Gary Reiner, 45, GE's chief information officer. "That's powerful.")
Yet there was more than cost cutting at work here: The folks at Polymerland discovered that their customers were actually grooving on the experience of using the Web. Barbara Thewlis remembers a call to one customer, who represented a small account. "He said, 'I'm just a one-man company. I don't think I can do this, and I really don't want to try,' " she recalls. "I said, 'I'll tell you what. I've got all the time in the world for you right now. I'll walk you through this step-by-step. I'll even tell you where to type in the URL.' Now he uses our Web site all the time."
Hank Harrell recalls the moment when he knew that "this Web stuff" was going somewhere. Sometime last year, during an upgrade of the site, his team altered the order-entry screens. Eager to avoid alarming customers who were already regular users, the team sent out an email that outlined the change. Within minutes, about 20 customers had logged on to check out the new look. Several of them then clicked on the site's "Feedback" button to put in their two cents.
Harrell was amazed by how quickly those customers responded. "They were listening to us. They trusted what we had done, and they were giving us their time and attention. They were showing loyalty toward us," he says. "That's when I realized that reaching our customers through the Internet could be more personal than using other channels.
"The great thing about the Net is that it makes it easy for people to be responsive," Harrell continues. "There were times when we were able to make changes to the site within hours of when customers had made those requests. We were able to respond to customers personally. All of a sudden, they saw real people on our end, rather than a black box where they faxed or mailed or phoned in orders."
Before Jack Knew Jack
Late last year, Foss was invited to a best-practices meeting in Fairfield, Connecticut, along with Jack Welch and a handful of other business-unit leaders from GE. Welch had become captivated by the Internet, and he wanted to ramp up GE's activity. Foss was asked to talk about Polymerland's site. "When you walk into a session like that, you're not sure what you're in for," Foss says. "But it was great. The setup was 'Okay, guys, let's go around the room. Everybody get online, and let's go through each Web site. Let's show people where you've been innovating, where you've made enhancements recently, where you'll be going next.' And we spent five hours going through all of the sites."
Foss's demo drew rave reviews. Welch began emailing Foss every week, asking for sales figures and other updates. And as Welch increased the intensity of GE's e-commerce agenda, the internal scrutiny on Polymerland increased as well. "Once Jack highlights you as a best practice, your phone starts ringing off the hook," Harrell says. "We've taken just about every business unit in GE through our presentation on what we've learned so far."
But the Polymerland site still had kinks to smooth out. That's what happens when you translate a dirt-world business to the online ether: Long-established business practices can cause problems when they intersect with the world of the Web. Traditionally, for example, when schedulers at GE warehouses needed to log a shipment into the system, they would use the last date of the year as a flag, figuring that they could insert the right information later. As a result, when the Polymerland Web site went live, customers saw shipping dates that were months past the dates that they had requested. Ensuring that information was accurate turned out to be less about fine-tuning computer systems than about changing human behavior.
"If it were just about putting up a nice site, any competitor could match us," says Mark Rohrwasser, 36, leader of Polymerland's customer Web center. "But there's more to it than that. You must radically change the way you do business. That's the barrier to entry: How quickly can you do that?"
Foss agrees. Members of the Web team, he says, "met every day at 5 PM for an action meeting. They dragged me in at least once a week, and we'd sit for an hour, make decisions, and go. That's when you have to draw on the experience of people from various functional areas. We made a lot of decisions very quickly that have changed the way that our business behaves. At the end of the day, it's really a behavioral discussion, not a technical one."
For now, Polymerland's competitive edge hinges on fundamental business processes. But in the future, staying ahead will depend on its ability to come up with the next big leap in service. One day, Foss promises, the site will offer not just plastics but also other things that the plastics industry needs: machinery and equipment, logistics support, even people. Polymerland could also join forces with other units within GE to offer services that are completely new, such as using smart applications to help manufacturers decide which plastic best fits a given job — an idea that came out of GE Power Systems. Another idea, courtesy of GE Research & Development: using microchip sensors to monitor the pellet levels in customers' storage silos — and then using that data to trigger automatic replenishment via the Web.
More important than launching specific innovations, though, will be maintaining progress. For Foss, the key challenges are to keep Polymerland focused on its customers and to keep it moving forward — fast. "We are really at the beginning of the execution phase," he says. "We've got to keep going at 120 miles an hour, and we've got to keep fueling this process with injections of new talent and new thought. We've got to make sure that we don't get too comfortable."
Cheryl Dahle (email@example.com) is a Fast Company senior writer. Contact Peter Foss by email (firstname.lastname@example.org).
Sidebar: Steal This Idea!
At GE, intracompany idea poaching isn't just tolerated — it's encouraged. One strength that a company with 340,000 people brings to the world of e-commerce is an ability to share ideas with dozens of business units. "We take all of these ideas and steal them from one another," says Jose Lopez, 40, e-commerce leader for GE Power Systems, which sells gas, steam, and hydroelectric turbines.
A case in point is a program that allows GE Power to provide analysis of various product options via the Web. Each GE turbine is fitted with a device that sends data about its performance back to GE via phone line or satellite. GE Power collects that information and then links it to the division's Web site. Turbine customers can go to the site and request an analysis of how their turbine is performing in comparison with the rest of the GE fleet. The program then tells customers what actions they might take to boost performance.
GE Polymerland is borrowing the structure of that program to help its customers pick the right plastic for each job. And GE Aircraft Engines and GE Transportation Systems are using similar technology. Why? The potential payoff is huge. At GE Power, the analysis process, which takes weeks when done manually, can be done in a few minutes over the Web. "That's one thing that we have over the dotcom startups," Lopez says. "We have 'brick' ability, so we can leverage all these years of data and experience, and we can marry all of that to 'click' ability. And that creates this amazing tool for serving customers."