GE reshuffles brass to stir up lighting innovation

Reconvergence: Beth Comstock has helped guide industry convergence before, when she ran digital media for NBC Universal and the Googles were infiltrating traditional film and broadcasting. She’ll try it again at GE as the lighting industry goes Net. LUX Magazine reports: When you’re an aging corporate conglomerate and you’re trying to decide how your lighting division can survive in the digital era, do you a) get rid of it, or b) try to infuse it with an innovative spirit? For Philips and Siemens the answer has veered toward ‘a,’ most recently with Philips’ announcement this week that it will seek ‘alternative ownership’ for its lighting group, a move that echoes Siemens’ 2013 spin-off of its Osram lighting company. At GE however they’re taking a new crack at ‘b’ with a quiet corporate restructuring in which CEO Jeff Immelt has fused GE Lighting with a division charged with ‘growth and innovation’ and whose boss, Beth Comstock, also runs the Silicon Valley-based GE Ventures, a firm that invests in startups in software, energy, healthcare and manufacturing. ‘On Monday, Sept. 16 GE announced internally that they will align the Lighting business with GE’s growth and innovation team, led by Beth Comstock,’ GE told Lux in an email. ‘The transition is not effective immediately. It will happen over the next few months.’ The company has yet to publicly announce the change. The move had surfaced in an article in Fortune Magazine, which said Comstock takes the lighting reins on Oct. 1. ‘NOT FOR SALE’ It was Comstock who two weeks ago told Lux that GE Lighting is not for sale, denying rumours that if true would put U.S.-based GE in the same category as Holland’s Philips and Germany’s Siemens as traditional large industrial companies moving away from direct involvement in the lighting industry. As part of the shift, Maryrose Sylvester continues as president and CEO of GE Lighting, but she will report to Comstock. Sylvester had been reporting to Chip Blankenship, who has been president and CEO of GE’s appliance and lighting business unit. Earlier this month GE sold its appliance division – dishwashers, toasters, washing machines and the like – to Sweden’s AB Electrolux for $3.3 billion. Appliances and lighting had accounted for $8.3 billion in sales at the $146 billion company last year. Lighting was about $3 billion of that GE told Lux this week – until now, GE has not separated out lighting numbers from appliances. Appliances was the latest division to go at GE as the company focuses on high margin industrial goods and services. Comstock, a rising star at GE who also serves as corporate marketing officer and senior vice president, reports directly to Immelt. BEEN THERE DONE THAT She has solid experience at the type of digital industry convergence that challenges today’s lighting business, which is shifting from conventional incandescent and fluorescent bulbs, to lights based on LEDs – light emitting diodes, or semiconductors – a transition that is opening up the field to new digital only manufacturers and to Internet and consumer technology companies like Google and Apple. Her background includes several years overseeing digital strategy for media giant NBC Universal as president of integrated media, when broadcasting giants like NBC, CBS and ABC were beginning to cope with the incursion of technology powerhouses like Google and YouTube into their industry (NBC was part of the GE empire at the time; GE sold its remaining 49 percent share to cable TV company Comcast for $16.7 billion in early 2013). That familiarity could help Comstock navigate GE Lighting around a global market where lighting could underpin everything from smart cities to the connected home, and which will rely on innovations and partnerships with technology and networking firms among others. All the while, she will have to figure out a way to make money. LED bulbs cost much more to make than conventional bulbs, but startup companies are pushing down end user prices faster than some of the cost-burdened giants can afford. LEDs in principle also last much longer, eradicating any replacement bulb business model. Thus, GE will have to hone a profitable business out of selling lighting services, controls and connectivity.