New York-listed industrial conglomerate General Electric has promoted Sue Siegel (pictured), CEO of its corporate venturing unit GE Ventures, to chief innovation officer (CIO).
As CIO, Siegel, who ranked fifth in this year’s Global Corporate Venturing Powerlist awards, will retain responsibility for GE Ventures, which is comprised of equity investing, licensing and new business creation, but will now have overall responsibility for developing and accelerating GE’s long-term innovation strategy.
Siegel will report directly to John Flannery, GE’s chairman and CEO, the company said. She had previously reported to GE vice-chairman Beth Comstock, who runs GE Business Innovations, developing new businesses, markets and service models.
Siegel’s role as CIO includes being a member of the company’s capital allocation and portfolio management governance and helping it grow, incubate and accelerate horizontal, adjacent and transformational businesses.
Flannery said: “Sue combines operational excellence with an entrepreneurial mindset to identify and unlock new value for GE. Her ability to spot new market opportunities, develop new business models, partner with the entrepreneurial ecosystem and help make market-backed capital allocation decisions has made GE stronger.”
In January, Siegel, co-chairman of the Global Corporate Venturing & Innovation Summit, told attendees “the time is now” for the industry to collaborate with entrepreneurs. It is a statement that GE Ventures has tried to live up to as an industry leader, viewed increasingly by other groups as a model of best practice, according to her GCV Powerlist 2017 profile.
GE Ventures’ five main units are equity investing, which invests in and partners startups, GE Licensing, New Business Creation, Healthymagination and Catalyst, its new early-market development discipline. Under Siegel, GE Ventures has become the primary unit backing earlier-stage entrepreneurs.
Siegel remarked at the Global Corporate Venturing & Innovation Summit in California last year: “We earn our stripes by being engaged in corporate strategy for our business units, educating on new business models, emerging technology trends, and working to always sense emerging trends.
“We have helped do this through the infusion of talent from the VC and entrepreneurial world. These are among a few things that we have done, and yet there is much more to do both internally and externally.”
Siegel herself joined GE from venture capital firm Mohr Davidow Ventures along with partners Marianne Wu and Alex De Winter. She sits on the board of US trade body the National Venture Capital Association as one of two strategic venturing representatives, the other being George Hoyem from In-Q-Tel.
Siegel’s background was in healthcare investing for Mohr Davidow from 2007 and a career in the industry stretching back 30 years to 1985 at chemicals company DuPont and Bio-Rad Laboratories, then later as president of both Affymetrix and Amersham (acquired by GE) and before that as a student in Boston and Puerto Rico.
This was a time at the dawn of medical genetics and biotech industries and venture investing, Kleiner Perkins Caufield & Byers having become the first VC firm to set up a life sciences group a year earlier, in 1984, after it backed the first biotech company, Genentech, founded in 1976.
Now, the sights and tools able to be used have broadened. In a GCV profile published in March 2016, Siegel referred to the GE Ventures platform as a business toolkit – a multi-pronged approach aimed at accessing innovation. This toolkit consists of traditional corporate venture capital investing, new business creation, licensing and early market development practices.
Siegel said for her Powerlist profile that five new businesses had been created over the past 18 months through New Business Creation, a practice area led by Risa Stack.
Add to this toolkit Catalyst, an early-market development practice that put in place “a discipline that helps identify and develop collaborations with leading science entrepreneurs creating breakthroughs that are market disruptors and could be the next big thing”, as Siegel said.
Siegel also pointed to the Healthymagination platform, which works on catalysing solutions for major global health challenges. The HealthyCities initiative and brain health efforts are two examples.
Siegel added that “as a CVC, we are being asked to expand our focus to move beyond the role of tech scout and equity investor” in the quest for future growth. She affirmed that “GE Ventures has expanded GE’s access to the innovation ecosystem, its technologies, new business models and practices, and the incredible entrepreneurs that power them”.
GE Ventures has set up its Edge program under Lisa Coca, managing director of corporate venture investments and commercial development, to provide what Siegel said was support for “our portfolio companies through what we can bring to their growth and development by providing access to our research and development experts, our distribution channels, our worldwide footprint and our regulatory and policy expertise”.
Siegel added: “We have really fuelled this effort by also offering leadership educational programs at our Crotonville campus, with a curriculum ranging from leadership skills and hiring to marketing and the art of storytelling, geared at enhancing entrepreneurs’ development.”
Corporate venture capital investments “aimed at transforming industries and generating meaningful returns might require more capital or global access than a financial VC might be interested in doing”.
Siegel also emphasised the importance of collaboration among players in the field. “Corporates understand that innovation is broad and diverse, and that we cannot do it alone. Partnerships are key and GE welcomes partners in the growth journey.”
To date, at the time of the May profile, GE Ventures has inked more than 100 equity deals, and technology and commercial collaborations across its five focus areas – software and analytics, healthcare, energy, advanced manufacturing and corporate productivity and operational efficiencies.
In terms of investment trends, Siegel said for last year’s Powerlist profile: “Everything is going digital in every industry. Everything will be connected via the cloud. Data is the new currency. Business models that are established in the tech vertical will be widespread into other verticals such as healthcare, energy and in oil and gas, to name just a few.”
GE Ventures, however, has not been directly responsible for all investments since inception. In 2013, the company invested $104m in Pivotal, a spinout of data services provider EMC/VMWare, in return for a 10% stake.
That deal was made by the GE software centre’s business development team and, according to an unnamed insider, “since it was such a large deal, it is not considered GE Ventures for the purpose of budget, but it went through the same channels”.
GE Ventures, therefore, is increasingly seen as an effective tool to drive the innovation and growth inside the parent. As Siegel said in a speech at the GCV Rising Stars awards in Sonoma, California, in January last year: “GE has given us, the GE Ventures team, a chance. We had to earn our place in the fabric of the company, and we have to keep doing that every day.”