What’s the trick to starting new businesses within corporations?

I was consulting to a Fortune 500 company a while back on helping them develop new businesses internally. I’ve done quite a bit of that and find it fascinating, challenging and most certainly tricky. The senior executive in charge of executing this strategy said to me: “You’ve done a lot of this. In your experience, what are the 3 key things you’ve learned?”

That took some thought. I had never boiled it down into “3 key things” before. To be sure there are many nuances to starting new businesses, many moving parts – even on a daily basis. You never know all the answers, so not only do you have to be comfortable with ambiguity, you have to be willing to make decisions when you may only have 50-60% of the information. I wouldn’t suggest making the big decisions that way, but there are times when it may be necessary to shoot from the hip a bit.

The “3 key things” I finally decided upon are this:
1. Market Research. Never underestimate the value of market research, no matter how much you think you know. As a friend of mine says: ‘Don’t believe everything you think.’ No matter what the cost figure is, you’ll spend it one way or another. You can either spend, say, $100,000 on market research now, or you’ll spend a multiple of that later learning it in the marketplace. But then in addition to costing more overall, you will have lost time.

2. The Right People. Many companies who decide to start new businesses take someone internally and lob them into the leadership role. Sometimes they’re qualified and many times they’re not. Just because someone is smart doesn’t mean they have the skills and experience or expertise to start a new business. It takes a special breed to do this well. People who have done it time and time again develop an “educated gut”; that is extremely valuable in these circumstances. Beyond the leader, you need people who have strong critical thinking skills, broader expertise than is required at the moment and strong team players who collaborate easily in situations of ambiguity.

3. Time to think. Last of all and most importantly, you need time to think. Starting a new business requires a great deal of strategy as well as tactics. If you don’t take the time to think, and I mean really think, you will most likely end up being more reactive than proactive and that can be devastating in a new business setting.

Starting new businesses as a part of strategic business development within an organization can be a ground-breaking way of growing. However, the company has to have the right culture AND the right people in order for it to be successful. When all of that is working for you, you will most likely find yourself miles ahead of the competition.


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