This is a delicate balance, for you need to sustain and update the old while breaking new ground. While some companies err by focusing too much on the new—Procter & Gamble got in trouble because it neglected to adequately resource existing brands— the tendency is to nurture established winners rather than to explore uncertain opportunities. Tony grasps a great truth of leadership in the 21st century: If you want to do more than maintain your market share, you need to explore new business opportunities constantly. Through business-process reengineering, Six Sigma, downsizing, and a variety of other initiatives, most companies have squeezed about all they can from their operations. They’ve managed their supply chain as well as they can to obtain savings and achieved maximum cost reductions through integration. If they want to grow their companies, they recognize that new business is the answer.
Tony’s approach—taking numerous small but acceptable risks to create successful new ventures—fits market realities in the early 21st century. In a time of great uncertainty and rapid change, it makes no sense to bet the house on one roll of the dice. If you try ten new ventures a year and only half of them pan out, you’ll still be ahead of the game. Tony seems to come up with one new scheme per episode, and though some of them flop, enough work that he’s able to keep profits high and losses low.
To adopt this new business strategy, employ the following tactics.
Make a commitment to generate at least one new business idea each week. You obviously aren’t going to turn all these ideas into real businesses, but the commitment to generating ideas will shift your strategic thinking from maintenance to creation. To facilitate this process, think small and creative rather than big and me-too. Like Tony, look for market niches. Concentrate on market segments your competitors may have considered too small. Does your company already possess resources that can be used to create a new product or service quickly and relatively inexpensively?
Formalize regular new-business meetings. Make them part of your routine. These formalized meetings communicate to your people that you take this subject seriously and want them to actively participate in this process. It’s critical, though, that you act on some of the ideas brought up in these meetings and reward those who initiated them. If it’s all talk, your people will quickly realize this fact and devote little energy or creativity to develop new-business concepts. Make sure you choose the best ideas and take them to the next stages—funding, plan development, and implementation—to demonstrate your commitment.
Like Jack (and Tony), be nimble and quick. Tony launches new businesses with a minimum amount of fuss and bother. Though he has the advantage of more power and control than most CEOs possess as well as a smaller organization to operate, his skill at bypassing lengthy meetings and approval processes is one that more leaders need to emulate. I’m not suggesting ignoring organizational protocols as much as learning how to work the system so that great new ideas can be launched before they become stale old ideas. To a degree, this means being politically savvy, making the right connections, and taking some risks. If you want to be nimble and quick in launching new products and services, these skills are necessary.