Innovator Interview: Barbara Daniele, General Electric

Barbara Daniele
SVP & General Counsel
GE Capital, Americas

the
innovator’s
interview
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.
June 2009

Anticipate. Innovate.
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Future Think LLC © 2005–09 Reproduction prohibited
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New York NY www.getfuturethink.com

the innovator’s interview 2

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-to-
day 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
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Barbara Daniele
view, a part of execution is timely execution.

The third or next phase would be proper resourcing. Do you have the “I do not believe that
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 innovative teams should
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.
come up in isolation with
Fourth, you need to have agreed-upon metrics and an agreed upon
super ideas. I believe that
period of time that you will measure success against. It’s critical that they should be good listeners
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 first of what does the
you have full agreement that either the plan has changed or the priority
has changed in some regard.
business need to do, either
And then, finally, you have to go back and measure and have
for short-term survival or
accountability. Unless there’s accountability for particular people who long-term profitability and
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 success, or to transition into
back to the shareholders. new technology over a three-
Let’s talk more on metrics. Let’s say that you were to give a year period.”
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 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 Anticipate. Innovate.
coming up with truly significant and innovative projects that they’re |
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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 “What we should be doing
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 is abandoning, re-looking at
objectives for the year—is abandoning, re-looking at outmoded ways of outmoded ways of providing
providing legal service and outmoded legal models and coming up with
a new way to do the same thing, maybe faster, cheaper, easier. The legal service and outmoded
law may be static, but how one delivers legal service is a very dynamic
opportunity for change. legal models and coming up
with a new way to do the
Is that mentality or that vision something that you’re trying to spread
throughout your team? same thing, maybe faster,
Absolutely. I’ve made it clear to all the men and women I’m privileged cheaper, easier.”
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.

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 Anticipate. Innovate.
team was used to seeing members, colleagues of theirs, members of |
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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 |
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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, “I think curiosity is a
whatever, so that’s one of the things we do.
natural breeding ground for
We do periodic reports, approximately quarterly, of what progress
we’re making, what obstacles we’re seeing, whether people really are
innovative thinkers. Curious
participating. I require 100 percent participation of everybody. It’s people, I think, are more
not, “Do I feel like doing something innovative this year?” It’s where
everybody’s going to do something innovative, something that simplifies likely to be innovative. Fearful
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
people who are afraid of
require any money, but maybe they make a contract simpler. Maybe losing their jobs, who are
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 afraid of changing anything,
of those things. And then, we talk about them when we have Legal
Department monthly calls.
are less likely to be innovative,
because change could be
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? dangerous. So, people who
I would say that inspiration for all of this came from the top of GE. We characteristically embrace
have what we call GE values that we measure every single employee
on, and one of those values we had described as “imagination and change and are curious are
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
sort of, in their DNA, good
right thing? When the Chairman said, “We are going to be technology innovators.”
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.

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.

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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.

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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.

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Innovator Interview: Barbara Daniele, General Electric

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