John Flannery, who has run GE’s Healthcare business just got tapped to become the company’s CEO and chairman, replacing Jeff Immelt.
Flannery, 55, is a 30-year veteran of the company he will run. He worked for two decades in financial services before running GE’s business in India and eventually leading GE Healthcare, an $18 billion business, for the last three years.
When he took over Healthcare, Flannery was taking the reins of a solid business — but one that wasn’t growing its sales, he told Business Insider in a March interview.
“I had the benefit and the curse of being new to the industry,” he said.
So he focused on a few things. First, he brought in new leadership, to add some fresh eyes to the team. Then, the group had to rethink what the customers want, beyond the hardware — its imaging machines for MRI exams and ultrasounds — that GE Healthcare is best known for.
“They’re not buying our equipment because they want a huge magnet in the basement of their hospital. They’re trying to get better outcomes, better clinical outcomes, better economic outcomes,” Flannery said.
That’s meant pushing for digitization — something that’s been going on across the board at GE — and focusing on the pairing of hardware and software. For example, if an imaging device can monitor a person’s tumor and determine the rate at which a tumor is growing, that information could lead to better medical outcomes.
At the same time, Flannery wanted to focus on areas where he saw high growth, particularly in emerging markets. That meant developing more mobile technology for ultrasounds, for example, that could be in places other than the traditional hospital.
Throughout all of it, Flannery was keeping up with the digital transformation that’s happening across the healthcare industry. GE Healthcare employs about 5,000 software engineers or 10% of GE Healthcare’s total employment. That number is expected to double over the next several years, he said in the interview.
The hiring effort is part of this broader plan, with GE Healthcare planning to invest $500 million in software and software engineers in 2018.
So far, GE Healthcare has shown only slight progress in Flannery’s goals of growing sales. Revenue in 2016 was $18.29 billion, up from $18.2 billion in 2013, the last year before he took over. Still, that steadiness stands in comparison to the broader decline in revenue at GE overall.
And the investments could fundamentally change the way we think about the hardware. Before long, Flannery said, we even might start to think about medical devices — like MRI or X-ray machines — the same way we think about our smartphones. That is, the physical device might be less important than what the software inside the phone can do.
“If you think of your iPhone, its utility is fundamentally more than just the phone and the camera,” Flannery said. But at the same time, he said, it’s so much more than just a device that takes pictures and picks up phone calls. “It’s all the other things that you’re able to do because of the combination of the hardware and software.”