From The Old, Something New


By Jack and Suzy Welch How do you transition a U.S.-centric company into a truly global enterprise? -- Rich Rosier, Bedford, Mass.

You begin by hoping that your leadership team becomes out of its mind with excitement about the prospect of going global. Because for a company to launch a major geographic expansion--or to start any new venture from inside the "old" one, for that matter--the vision and the energy must come from people with real sway, and it has to come in buckets.

It's not that organizations intentionally oppose organic growth. It's just that any new venture soaks up money and attention, and too often, when people in the old, profitable part of an organization see cash and boss-interest flowing away from them, they balk. "Why is the company pouring money into that stupid idea?" they grouse, "We're the ones with all the earnings around here, and now we're not getting enough to reinvest."

Maybe they have a point, but it can't matter if you want to start something new. A venture won't make it with hedged bets, help delivered in teaspoonfuls, or a wait-and-see approach. No, if companies want an initiative to thrive, top managers have to use the old Robin Hood method: Steal from the rich to give to the poor. And the first thing they have to steal is people--great people, that is, to run the venture.

Too often, the tendency of top management is to hand a risky new initiative over to expendable Fred, who has two years left before retirement in a job he didn't do particularly well to begin with, or to high-potential Sally, a very young manager who, while good, doesn't yet have a strong embedded reputation in the company. Wrong. They have to send in real stars--highly respected people already in high-visibility positions. That bold gesture gives a venture its best chance to hit the ground running, and it sends a critical message to the organization: This thing is for real.

Along with appointing high-profile stars, senior managers can bolster organic growth initiatives in two other ways. They should make an exaggerated commotion about the potential and importance of the new venture, frequently visiting its operations and putting themselves on the line by cheerleading its small victories at every opportunity. And they should back up that cheerleading by having the new venture report at least two levels higher than sales would justify. Visibility matters!

Finally, if managers really want a seedling to grow, they need to give it some space. Yes, that may sound contradictory. But supporting a venture doesn't mean controlling its every move. If you've put great people in charge, you have to let them go for it. Their best chance of success comes from the freedom to take risks.

We wrote about mergers and acquisitions in this space a few weeks ago, praising it to the skies as a powerful way to grow. But starting something homegrown--the new from inside the old--can be one of the most exhilarating aspects of being in business. In your role in your company, you may not be able to lead the charge to globalization, but you're already helping by welcoming change. Now let's hope your leadership will, too.

Is it O.K. to have a friendship with the people who report to you? -- Craig Roberts, Purchase, N.Y.

It's certainly nothing to be afraid of! Of course, you don't need to be friends with your subordinates, as long as you share the same values for the business. But if you are friends with them, lucky you. Working with people you really like for 8 or 10 hours a day adds fun to everything.

That said, remember that boss-subordinate friendships live or die because of one thing: complete, unrelenting candor. Candor is imperative in any working relationship, but it's especially necessary when there's a social aspect involved. You don't want your liking someone's personality to automatically communicate that you like his or her performance. You may, but performance evaluations have to come in a distinct and separate set of conversations at work--as often as four times a year--in which you sit down with your subordinate, put the shared laughs from last weekend's barbecue in the corner, and talk about what's expected and what has been delivered.

Do these candid conversations require a certain ability to compartmentalize? You bet they do. But when you recognize that fact and practice discipline, confident you're being fair to everyone, you should be able to enjoy one of work's best built-in perks: hanging out with friends.

Jack and Suzy Welch look forward to answering your questions about business, company, or career challenges. Please e-mail them at thewelchway@BusinessWeek.com. For their podcast discussion of this column, go to www.businessweek.com/search/podcasting.htm


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