How GE is disrupting itself. Harvard Business Review's 10 must reads on innovation. The authors are Jeffrey Immelt, Chairman and CEO of General Electric; Professor Vijay Govindarajan and Professor Chris Trimble from Tuck School of Business, Dartmouth College. "Reversed Innovation" In 2009, General Electric announced a $3 billion investment to create 100 health-care innovations that would lower costs, increase access and improve quality. There were two products highlighted at the time - a $1,000 handheld electrocardiogram device and a $15,000 portable ultrasound machine. They are revolutionary, not just because of their small size and lower price, but also their innovation process. they are originally developed for rural area of India and China, and are now being sold in the United States. This process is called "Reversed innovation". For decades, GE and other leading technology companies developed high-end products at home countries and distributed them globally with some adaptations to local markets - a process known as "glocalization". However, in "reversed innovation", products were created specifically for emerging markets and brought back into wealthy markets. "It is not optional; it's oxygen" Glocalization is so dominant today because it has enormous advantages and helped GE grow dramatically outside the United States. GE's revenues outside US soared from $4.8 billion in 1980 to $97 billion in 2008, it is more than half of its total revenue. However, glocalization limited the company to skimming only the top of emerging markets and ignored their even faster growing middle or lower-end customer segment. More importantly, if GE doesn't come up with innovation in developing countries and take them global, new competitors from those countries - like Mindray, Suzlon, Goldwind and Haier- will. By introducing products with a new price-performance paradigm, the emerging giants could even destroy GE. Reversed innovation isn't optional; It's oxygen. "Five critical principles" For decades, GE has evolved to maximize its effectiveness at glocalization. Power and P&L responsibility were concentrated in global business units headquartered in the developed world. It is extremely difficult to implement a successful reversed innovation. GE OVERCAME the difficulties. It grew a portable ultrasound machine for China rural market to a $278 million global product line in six years. GE achieved that by using Local Growth Team model based on five critical principles. 1. Shift power to where the growth is When the compact ultrasound effort began in China, a new unit based in Wuxi, China was created, which is independent from the existing three ultrasound business units. The team was given the power to develop their own strategies, organizations and products. 2. Build new offering from the ground up The compact ultrasound was developed almost from scratch, although it was having support from an existing project in Israel. The concept of the original Israel project gained little interest in GE, but the team in China was encouraged to pursue the concept further for the compact ultrasounds. 3. Build the local team like a new company GE's organizational "software" all evolved to support glocalization. Leaders of Local Growth Team need to rewrite the software to support zero-based innovation. They managed its own complete value chain, local recruitment, used local dealers to establish cost-effective channels to reach China's vast and fragmented rural markets, and built in-country teams to provide quicker and less costly service. 4. Customize targets and metrics GE's Top management was careful to use different criteria to evaluate the performance of Local Growth Team in China. For example, because of shorter government approval process, the product development cycle is set shorter. Because of lower salaries and more demanding service, the team has more staff relative to the number of installed machines. 5. Have local growth team report to someone high in the organization Local growth team can't thrive without strong support from the top. Even when it was tiny, the team in China reported directly to CEO. He was the key person to mediate conflicts between the team and the global business, connect the team to resource, and to build global market for the portable ultrasound. "There is still a long way to go" GE now has established a dozen local growth teams in China and India. However, the progress of reversed innovation is uneven. While some businesses have been delivering the expected results, others have been less enthusiastic. The vast majority of GE's resources are still devoted to initiatives for developed ones. Changing the mind-set of managers who've spent their careers excelling at glocalization is GE's biggest challenge. For reversed innovation, there is still a long way to go

1)critically analyze the content of GE article?

2) identify key problems GE is facing and possible global strategies that the company can use to solve those problems?