Old dogs and new tricks

For the 3 years, I worked on a new business unit inside an established company. Before that I was working on new product launches for another established company that was looking for new growth opportunities. In both cases, it was apparent that the core company did not want to embrace the change needed to allow the new venture to succeed. At the heart of the problem is that the new business unit / product division needs to use different tactics than the established business uses. The established business process have been refined and perfected over years by those who are now the senior management.

What makes these practices so valuable for the core business is exactly what makes them deadly for the new ventures. They minimize risk to the existing business by rejecting / killing other processes that might introduce instability. The new venture is by definition a risky process, if it is even a process at all yet. It is like our own immune system… the core business competencies identify unknown bodies and try to kill them. The new venture is like a cancer, co-opting resources of the body to grow in a different way. This analogy is obviously not the best, feel free to offer a better one…

So how are established businesses to succeed in launching new ventures?

The key is to find a way for the core business to embrace the risk. The compliment of risk is change, and in an established company there are plenty of people who have been looking for a change. In many cases they are frustrated because the established company has little room for change within the perfected processes. So when looking for resources from the established company, try re-framing your resource requests as opportunities to explore change.

For example, over the years, the website of a company has become stagnant. The message is established, look and feel are stable, navigation is optimized… Sure a lot has changed in the internet since the initial site design, both in web technologies and the ways people use the internet. But inside the company, if it ain’t broke, don’t fix it. The IRR of moving the website to a more modern, more flexible platform is a hard thing to justify.

But there are at least a couple of people who know the site could be more. The marketing intern that has a blog with followers knows there is some value the company could extract from blogging. The head of IT has been hearing about content management systems and web applications that could enhance the user experience. A marketing manager has been dipping her toe into website analytics and user experience optimization from experimenting with her husband’s bakery website.

Along comes the new venture. The establish company provides a website for the new venture, using all the established best practices of the company. The result is a confused, poorly maintained excuse of a site that is barely better than no website at all. The established company doesn’t feel bad about it because it matches the best practices of the company. Those in the venture know that the site is not meeting their needs but has little ground to push for a change. The established business processes reject these efforts by definition. The result is a new venture team who feels handicapped by the hand that feeds them. It’s not a fun place.

There’s a way to get through this though. While the core business processes reject the change, there are people in the core business who need an outlet for their innovative thoughts. The new venture is a solution to this. Since the new venture is by definition risky, it’s ok to try new things… Recruit them. Enlist them. They are your people. They are your solution.

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