Imagine you’re in a small theater. The stage is set as a middle class living room of the 1970s. Uncomfortable sofas, Dad’s overstuffed recliner and shag carpeting so green your eyes hurt.
Then, as the lights go down and Act 1 opens, a Roman legion enters stage left for an assault on the ancient Hebrew mountain encampment at Masada.
Oddly enough, the coverage of GE’s strategic dismantling and sale of GE Capital makes me think of these hypothetical bewildered theatergoers. Here, I want to argue a contrarian view of GE’s moves as a way of demonstrating that technology is changing the way we have to look at the world – and talk about the world.
The action of a play is supposed to be consistent with the stage environment. So, when GE gets out of a business that has garnered a great deal of attention – and profits – in the last couple decades business writers have to select an environment in which to place that action so that it makes sense to them. Thus, GE is “throwing in the towel” on financial markets, according to the New York Times, due to tighter regulation in the aftermath of the 2008 financial crisis.
Financial markets are a familiar stage setting for business writers. They know how to write those dramas easily, what cast of characters to call on and the familiar lines of dialogue that come out of their mouths. And so it is that GE is exiting this scene, hectored off the stage by regulators and the oppressive barriers to making more than a few billion dollars in profit. It is an easy play to write…as long as you choose financial markets as your stage setting.
Allow me to send the Roman Legion through this setting, muddying up the already ugly shag carpet. The GE situation is an example of a crucial change in understanding a technology-driven world where every company is a technology company.
When you’re telling a story today, the setting is a critical component to get right. It is the foundation of any understanding of what you’re doing and it is the easiest part of your story to take for granted. Technology makes environments much more fluid than in the past where there were walls between industries and opportunities and threats did not cross boundaries. You have to spend some time describing the scene or the action will make no sense.
GE is going to focus on its industrial businesses such as transportation systems, aircraft engines, railroad engines, turbines and other huge equipment that somehow manages to disappear into modern infrastructure. For many business writers focused on Wall Street, this is boring compared to the masters-of-the-universe world of financial markets. It’s like you woke up from a Ferrari-infused dream and discovered that you’re driving your grandfather’s Oldsmobile.
But, what if we shift the setting to the technology industry instead of Wall Street? GE is loading those boring jet engines and trains with sensors that produce data, an industrial implementation of the Internet of Things (IoT). All of that data is then processed in a Big Data analytics platform GE has branded Predix. Predix enables GE to add huge, recurring services revenue streams to these manufacturing businesses. Do you want to predict jet engine failures? Predix can help. Do you want to schedule maintenance downtime for your trains so that it’s least disruptive? Predix can do that.
Of course, these are just tips of the many icebergs GE has access to through its dominance of these old-line manufacturing businesses. These systems will be everywhere, blipping out data that will give GE an unprecedented view of the 21st century. That is an incredible position for a diversified conglomerate.
Change the setting, and you must write a different play. In this setting, GE Capital is a distraction, a competitor for investment capital and a potential albatross the next time Wall Street destroys the world economy. The 21st century masters of the universe are to be found in the data business, not derivatives.
Like the aforementioned business writers, we are still drawing on familiar plots to describe the actions we see. However, the environment has changed and the way we talk about that environment is still catching up. We are still adjusting to this world where everything is fluid.
You can’t assume that your audience sees the same environment you do anymore. If you’re selling an idea, you need to focus first on the problem you’re solving. If you’re making a speech, you better talk about changes in the world before you mention your strategy. What’s obvious to you might not be obvious to someone else. That’s always been true in communication, but this maxim is a tangible force in a technology-driven world where people can connect old dots in new ways.
Setting the stage is now crucial to any discussion of what’s happening in the world. If you skip that step, technology could turn your 1970s family drama into a 21st century farce.