For the last five years, we have been deeply immersed in research, working to discover the secrets for sustaining growth — specifically, for building high-growth-potential new businesses while simultaneously sustaining excellence in the existing business. We have written a great deal on the topic, and just finished a book due this fall (Forget, Borrow, Learn: Secrets to Building Breakthrough Businesses Within Established Organizations, Harvard Business School Press).
We have taken great pride in what we have written. Still, we recognize that it is nearly impossible to change the practice of management through writing alone. Our job is incomplete. The next task: to help turn breakthrough ideas in a book into breakthrough growth for organizations.
Each in our own distinct way, we plan to interact with and influence executives on a much more frequent basis, focusing on high-growth initiatives. For many years, while maintaining a full academic load, VG has spent several days a month leading high-level strategic dialogs with CEOs and top management teams. These dialogs will now include a focus on the specific leadership challenges of high growth. Chris’s transition will lead to even deeper involvement with clients. He has reduced his academic commitment and partnered with Katzenbach Parters LLC (KPL), a New York-based consulting firm.
The new endeavor is good news for readers of this column. We will be one step closer to the problems we are writing about and will have many new sources of inspiration. We also will be examining a much broader range of issues at the intersection of leadership and innovation, and look forward to sharing our new work with you.
One new source of inspiration is one of the founding partners at KPL, Jon Katzenbach, who has been advising clients at McKinsey and KPL for nearly 50 years. We had a chance to share our previous column with Katz, in which we advised leaders of breakthrough businesses within established organizations to be mindful of the need to build partnerships with the core business. Too often, we argued, it is tempting to build pride within NewCo by celebrating differences from CoreCo (typically, that NewCo is more flexible, more creative, and more empowering.) But this divisive approach makes a healthy partnership highly unlikely.
Katz has written numerous books, and it turns out that the most recent one is all about pride (Why Pride Matters More Than Money: The Power of the World’s Greatest Motivational Force, Crown Business). Having advised our readers how not to build pride, we were naturally curious to understand more about what to do, so we asked Katz.
There are many possible sources of pride, but according to Katz, none is more powerful than an intrinsic pride in the actual work you immerse yourself in every day. It trumps more intuitive sources, such as pride in belonging to an elite organization, or pride in superior results — particularly for front-line employees. And it explains why the most successful managers discover what kind of work delivers this sense of intrinsic pride within each individual employee, and then rearrange work assignments to allow as many employees as possible to immerse themselves in that unique activity that lifts their spirits.
VG and I will have little trouble maintaining a sense of pride as we make the transition from researching and writing to analyzing and advising. The differences are not great. But when a corporation enters a emerging industry, the change is often more than just a transition, it is a revolution. And it can completely overthrow organization’s formula for nurturing pride.
Such was the challenge that Corning faced when it launched a new business to supply genomics researchers with DNA microarrays, a crucial piece of experimental apparatus. At the time, Corning’s sense of pride was closely tied to its ability to achieve astounding levels of quality in manufacture of specialty glass. But genomics research was a nascent science, and the associated manufacturing processes were messy and inconsistent. Pride in perfection was powerful in Corning, but it wasn’t a viable approach in the new market. As a result, Corning’s new business suffered from product launches that were delayed in order to achieve levels of perfection that were beyond what customers needed.
One of the strongest conclusions from our research was that companies generally underestimate the difficulty of acquiring the new skills needed to win in new markets. As a result, some even staff NewCo entirely through internal transfers. But an organization’s capabilities often define just as strongly what it cannot do. Intrinsic pride in certain kinds of work is part of the reason.
Acquiring new capabilities means more than simply acquiring new knowledge. It requires finding people whose energies are unleashed by different activities. It means that the New in NewCo does not just refer to a new market, but to a new organization, with a different breed of people.