Harvard Business Review on Collaborating Effectively

Silo Busting

How to Execute on the Promise of Customer Focus

by Ranjay Gulati

IN 2001, UNDER PRICE pressure from the government and managed health care organizations, GE Medical Systems (now GE Healthcare) created a unit, Performance Solutions, to sell consulting services packaged with imaging equipment as integrated solutions. These solutions, priced at a premium, were intended to enhance productivity by, for instance, reducing patient backlogs. At the time, lots of companies were making the move from selling products to selling solutions in an attempt to differentiate themselves in increasingly commoditized markets.

GE’s plan seemed to work well at first. The Performance Solutions unit enjoyed strong initial revenues, in part because most new ...