So you want to start something new4 min read . Updated: 06 Dec 2009, 10:01 PM IST
So you want to start something new
So you want to start something new
One of the most exhilarating things about being in business is starting something new from inside being old—launching a product line or service, for example, or moving into a new global market. Not only is it a blast, it is one of the most rewarding paths to growth.
Now, starting something new from within an established company is easier said than done for one good reason: It requires managers to act against their instincts. Few have a burning desire to invest research and development (R&D) dollars in a risky new technology or to send their best people to start up a manufacturing facility halfway around the world. Nor do many have an urge to give new ventures a lot of leeway.
Here are three guidelines for making organic growth a winning proposition:
• Spend plenty up front, and put the best, hungriest and most passionate people in leadership roles.
Companies tend to size their investments in new ventures according to the venture’s initial revenues or profits. That’s short-sighted, to be polite about it. Investments in R&D and marketing should be sized as though the venture is going to be a big winner.
People choices should be made with the same mindset; instead of sending expendable bodies to run new ventures, you should put the best people in charge. Forget the guy from manufacturing who’s just looking for an adventure. You want a star employee at the helm.
One thing is for certain: New businesses with limited resources and only good enough people stay small.
• Make an exaggerated commotion about the potential and importance of the new venture.
Start-ups need constant cheerleading. Cheerleading, however, isn’t just about senior managers making noise. It is also about giving new ventures sponsorship, even if this means breaking old bureaucratic norms.
For a new venture, organizational visibility is critical. They should report at least two levels higher than their sales would justify. If possible, they should report directly to the chief executive. At the very least, they should always be high on the CEO’s priority list.
Admittedly, making a huge scene about a new venture also means you risk looking dumb if it fails. Ultimately, that’s part of the gamble.
Despite the risk, go ahead and make a scene. You’ll doom the venture if you don’t. If it fails anyway, take responsibility, and don’t point fingers. You believed in it, but it didn’t work out.
If the venture wins, relish the team’s success. It will feel great.
• Err on the side of freedom; get off the new venture’s back.
There is no formula when it comes to how much autonomy to give a new venture; it is an iterative process. Just remember: Throughout that process, give a new venture more freedom than you might like, not less.
Finding the right balance between supporting, monitoring and micromanaging a new venture is similar to the process you go through when you send a son to college. Now that he’s on his own, you want nothing more than for him to take full responsibility for his life. You also don’t want him to flunk out or carouse too much. And so you begin a game of give-and-take. At first, you visit and call a lot. You frequently inquire about tests, new friends and weekend activities.
When everything seems to be running smoothly, you don’t supervise him quite as much. When you receive news of a low grade, you return to your former vigilance.
That’s how it goes with new ventures, except that you can—and should—replace a new venture’s leaders if too much oversight is required.
Ultimately, you want this iterative process to lead to a new venture’s having more and more autonomy.
Now, we all know that in large companies, brand new ventures have neither the results nor the political capital to get their own shops. And in small companies, it’s too easy to fold a new business into the core. But autonomy gives people ownership and pride. Ideally, new ventures with strong leaders should have all their own tools, including their own R&D, sales and marketing teams. They should be allowed to place their own audacious bets on people and strategies.
In each of your companies, opportunities of every size and variety await. Grab them. Pick passionate, driven people to lead these initiatives, help them in every way possible and then give them room to breathe.
Growth is great, and in business, it doesn’t always have to start in a garage. There is nothing like the fun and sheer thrill of starting something new—especially from inside something old.
Adapted from Winning (HarperBusiness Publishers, 2005) by Jack Welch with Suzy Welch.)
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Jack and Suzy are eager to hear about your career dilemmas and challenges at work, and look forward to answering some of your questions in future columns. Jack and Suzy Welch are the authors of the international best-seller, Winning. Their latest book is Winning: The Answers: Confronting 74 of the Toughest Questions in Business Today. Mint readers can email them questions at firstname.lastname@example.org Please include your name, occupation and city. Only select questions will be answered.
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