How do you transition a U.S.- centric company into a truly global enterprise?
You begin by hoping that your leadership team becomes out of its mind with excitement about the prospect of going global. Because for a company to launch a major geographic expansion—or to start any new venture from inside the “old” one, for that matter—the vision and the energy must come from people with real sway, and it has to come in buckets.
It’s not that organizations intentionally oppose organic growth. It’s just that any new venture soaks up money and attention, and too often, when people in the old, profitable part of an organization see cash and boss-interest flowing away from them, they balk. “Why is the company pouring money into that stupid idea?” they grouse, “We’re the ones with all the earnings around here, and now we’re not getting enough to reinvest.”
Maybe they have a point, but it can’t matter if you want to start something new. A venture won’t make it with hedged bets, help delivered in teaspoonfuls, or a wait-and-see approach. No, if companies, want an initiatve to thrive, top managers have to use the old Robin Hood method: Steal from the rich and give to the poor. And the first thing they have to steal is people--great people that is, to run the venture.
Too often, the tendency of top management is to hand a risky new initiative over to expendable Fred, who has two years left before retirement in a job he didn’t do particularly well to begin with, or to high-potential Sally, a very young manager who, while good, doesn’t yet have a strong embedded reputation in the company. Wrong. They have to send in real stars—highly respected people already in high-visibility positions. That bold gesture gives a venture its best chance to hit the ground running, and it sends a critical message to the organization: This thing is for real.
Along with appointing high-profile stars, senior managers can bolster organic growth initiatives in two other ways. They should make an exaggerated commotion about the potential and importance of the new venture, frequently visiting its operations and putting themselves on the line by cheerleading its small victories at every opportunity. And they should back up that cheerleading by having the new venture report at least two levels higher than sales would justify. Visibility matters!
Finally, if managers really want a seedling to grow, they need to give it some space. Yes, that may sound contradictory. But supporting a venture doesn’t mean controlling its every move. If you’ve put great people in charge, you have to let them go for it. Their best chance of success comes from the freedom to take risks.
We wrote about mergers and acquisitions in this space a few weeks ago, praising it to the skies as a powerful way to grow. But starting something homegrown—the new from inside the old—can be one of the most exhilarating aspects of being in business. In your role in your company, you may not be able to lead the charge to globalization, but you’re already helping by welcoming change. Now let’s hope your leadership will, too.
This question and answer originally appeared in Business Week magazine on November 20, 2006.
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