strategy+business Winter 2013 : Page 98

“The great thing about startups is that if they’re successful, they grow. You don’t have to change the whole corporate culture.” 98 be managed differently, to a differ-ent set of metrics and a different system than the conservative opera-tional people who are running your existing products. The problem is that in finance, equities never become bonds. They’re separate assets. But success-ful entrepreneurial products grow up to become established products. Under the old system, the people who launch a product tend to mi-grate with it. That causes a lot of problems because the skills and at-titudes that make for effective en-trepreneurs don’t necessarily make for effective managers of status quo operations. I believe a general theory of management is emerging. It has to help people understand (1) how you take an idea, how you get it started, and how you manage the kind of people who do that well; (2) how you incorporate experiments into your core strategy; (3) how you graduate a new thing that’s been successful into your general busi-ness operations and manage it as a mature product; and (4) how you manage a product’s end-of-life, where you have to outsource and re-duce costs. I think of those as the four quadrants of the portfolio. S+B: What does this do to our traditional beliefs about corporate culture? RIES: First, as we’ve discussed, you have to change the way you hold people accountable: Change the ac-counting systems and metrics. Then you need to allow teams to self-orga-nize around this new way of launch-ing ventures—around building and testing minimum viable products, managing pivots, and so on. I guarantee you these teams will produce a more innovative culture, and that culture will allow you to at-tract and retain the best people in those teams. The great thing about startups is that if they’re successful, they grow. You don’t have to change the whole corporate culture. You have to create a space where a new culture can be piloted and grow. In the portfolio approach, it’s not important for every part of the company to have precisely the same culture. But certain common elements will cross the full organization. Think about GE—such a strong culture of discipline, rigorous execution, and management train-ing. As I’ve watched the company adopt lean startup ideas, the com-monalities have been great with its existing culture because lean startup is itself a rigorous methodology. We don’t lose the rigor and accountabil-ity, but we put in place different metrics, milestones, and checklists. We don’t need to reinvent cor-porate culture, but we need to recog-nize that the culture will manifest itself in different ways in different parts of the portfolio. That itself is a pretty big shift. + Reprint No. 00224 strategy+business issue 73 thought leader

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