Everybody should have White Space projects.  More than one.  Because you never know if which project will work out, and which might not.  Nobody has a crystal ball.  To create growth you have to not only open White Space, but you have to know when to get out — by closing or selling.

Today GE announced "Safran to buy 81% stake in GE Homeland Protection" according to Marketwatch, effectively taking GE out of the airport security business.  According to Securityinfowatch.com the sale will give the French company complimentary technology for its markets around the globe, as well as GE's U.S. sales force and market access.  Thus it was willing to pay-up for the business unit.  For GE, the sale gets the company out of a business heading in a different direction than originally planned. 

Many people thought that airport security technology would be rampant in U.S. airports following the changes after September, 2001.  And GE was one of several companies that developed scenarios justifying investment in new products to innovate new solutions and take them to market.  Scenarios for big spending on airport security seemed sensible.  But, a few years later, reality is that nobody wants to pay for the new techology.  The airlines are broke and have no money to pay for better customer satisfaction during check-in, where they can blame the TSA for unhappiness.  The cities that own the airports have no money to pay for more equipment to upgrade the systems.  Most have their hands out for federal dollars due to tax shortfalls.  And customers refuse to pay higher ticket taxes to cover the security investments.  What looked like a great market turned out to be a slow-grower with extensive downward pricing pressure.  So far the market has concluded it will just let people wait in line. 

So, hand it to GE.  They sold the business.  By GE standards the $580million received for the sale isn't a lot of money.  But it shows that when you have White Space projects, you have to manage them for results, not just let them run. To now make this business worthwhile in the massive corporation, GE would need to make big acquisitions.  But the growth wasn't really there to make the market all that interesting.  Because GE was participating in the market, they learned what was happening and could see that the desired scenario wasn't the actual scenario.  So GE needed to dial-back its investments. When the airport security business failed to take off, it made more sense to sell it than keep investing in product development for a market growing slower than expected.   Rather than simply let the business string along and see declining returns, GE sold the business to someone who has a different scenario for the future – willing to pay for GE's R&D investments.  Before the business looked bad to everyone, GE sold its interest at a good price so it had the money to invest in something else.  When the shift went a different direction than GE planned, GE got out.  That's smart.

You can't expect to read all market shifts completely accurately.  Rarely does everything quickly work out all right, or all wrong.  So you have to develop your scenarios, and invest based upon what's most likely to happen.  You need several options.  Then, track the market versus your scenarios.  If things don't go the way you thought they might, you have to be willing to stop.  If you're smart, you can get out without losing your investment – possibly even make some money – especially if you're first to escape. 

Back in the early days of mainframe computers the 3 big players were IBM, GE and RCA.  Behomoths that used the products as well as saw the market growing.  But GE quickly realized that in mainframes, IBM's share allowed them to manipulate pricing so that GE and RCA would never make much money – and never gain much share.  So the head of GE's computer business called up RCA and offered to sell RCA the business.  He offered to let RCA "synergize" the combination so it could "compete stronger" against IBM.  RCA took him up on the deal.  GE made a big profit on the sale.  The head of the computer business got tagged for his savvy move, and soon was made Chairman and CEO.  And RCA ended up losing a fortune before learning IBM had the market sewn up and RCA couldn't make any money – eventually getting out via a shut down.  That write-off spelled the beginning of the end for RCA. 

White Space is really important.  But it's not a playground for madcap innovators to do whatever they want.  White Space should be based on scenarios.  And the business should report results based upon the scenario expectations.  If the White Space project can't meet expected results, you have to be just as willing to get out as you were to get in.  You have to compete ferociously, to win, but don't be ego-involved and foolish like RCA was in mainframes.  Be committed, but be smart.  If you don't get the results you planned on, understand why.  Keep your eyes on the market.  Get in, work hard, and be prepared to possibly get out.