How to Lead Growth Initiatives: Guidelines for CEOs
Posted on July 28, 2013
The Harvard Business Review provides actions that will help company leaders to “nurture internal startups and teach their core businesses how to deliver both earnings and growth.” These tips are not exclusive to businesses and can be helpful in the nonprofit sector as well!
These actions will help company leaders nurture internal start-ups and teach their core businesses how to deliver both earnings and growth.
Create the conditions.
Make earnings and growth equally important top priorities. Remove cultural impediments to growth such as risk aversion and the notion that any kind of failure is bad.
Learn with the team.
Meet frequently enough and long enough with a venture’s team to help it solve problems and deepen insights. Accompany it in striving to understand the needs and problems of prospective customers and other members of the nascent ecosystem.
Choose the right team leaders.
Assign your best, most experienced general managers to lead growth initiatives. They have the internal networks required to access the larger organization’s capabilities, and they understand its values and culture.
Mobilize the team.
Focus on the capabilities needed at each stage and choose people with the best mix of skills, knowledge, and behaviors, rather than those who happen to be available. If internal people don’t fit the bill, look outside. Adjust compensation schemes that make it difficult to recruit new types of people. Fully staff the venture only when the strategy, business model, and value proposition are clear.
Establish metrics and milestones.
Employ measures that track the progress of an early-stage venture in identifying customers’ problems, learning how to solve them, defining the size of the opportunity, and developing a business model that can capture a disproportionate share of the value.
Fund the venture.
Create separate funds for financing new ventures and divorce their allocation from the company’s annual budget process. Tie funding to the achievement of milestones with realistic time frames.
Leverage the core businesses.
Employ their capabilities to build the ventures and deeply involve them in the process. Eventually growth will become part of their DNA. The result will be an enduring enterprise.