Note: This is an extended, online-only version of the Q&A that appears in the August 18-25 issue of BusinessWeek.
Q: How important is technology to GE?
A: It's a business imperative. We're primarily a service-oriented company, and the lifeblood for productivity is more about tech than it is about investing in plants and equipment. We tend to get a 20% return on tech investments, and we tend to invest about $2.5 billion to $3 billion a year.
Q: What kind of technology will be key in the future?
A: Wireless could have a huge impact. We have an incredible amount of people who work close to the customer -- our salespeople, our service people. Making them more productive is my No.1 priority. Wireless is going to be the key to us.
Other exciting areas are going to have to do with more energy-efficient and lower-emission technology, whether that's in aircraft engines or gas turbines. We think we're on the leading edge there, in things like molecular energy where we can image down to predict disease patterns three or four or five years before the onset of the symptoms of a disease. There's nanotechnology, advancing our material science. We feel good about our pipeline and, in many ways, it has never been stronger.
Q: When you came to the job, you said you were going to make GE (GE) a much more tech-focused company. How are you doing that?
A: It starts with the premise that we live in slower-growth times. There's lots of excess capacity, and the companies that are going to get margin-rate growth and revenue growth are the ones that have excellent products and good technical advantages. What we're doing is going business by business, making sure we've got short- and long-term product development and spending that will give us leadership technology.
When I do a business review, I start with: What does it take to fund that technology? And then I make the businesses fit to that model.
Q: You're talking primarily about innovation and new products. Are you also focused on information technology and how that can make GE itself more productive?
A: Our IT investment is greater than our investment in P&E [plants and equipment]. That means that your IT people, your CIO, have the role that your manufacturing manager had in the last generation.
Q: Do you think information technology is so pervasive now that it doesn't really offer a competitive advantage to companies like GE?
A: If you want to get long-term productivity, which is always going to be important, you've got to make IT investments. I look at it as a way to drive continuous improvement and get costs out.