Winning - Jack Welch [73]
So what’s the bottom line here?
Even with the risk, go ahead and make a scene for new ventures—an exaggerated scene. You’ll doom them if you don’t. If the venture fails anyway, recognize your part. Don’t point fingers. You believed, but it didn’t work out.
If the venture wins, relish the team’s success. It will feel great.
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GUIDELINE THREE: Err on the side of freedom; get off the new venture’s back.
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This is a guideline that is not really a guideline, because when it comes to how much autonomy to give a new venture, there is no formula, only an iterative process. The main thing to remember is: throughout that process, give a new venture more freedom than you might like, not less.
Finding the right balance between supporting, monitoring, and smothering a new venture is not unlike when you send your kid off to college. Now that he’s on his own, you want nothing more than for him to take full responsibility for his life. You also don’t want him to flunk out or carouse too heavily. And so you begin a game of give-and-take. At first, you visit and call a lot. You frequently inquire about tests, new friends, and weekend activities.
When everything seems to be running smoothly, you let out the rope.
When the first C minus comes home, you pull it in.
When the next report card is all As and Bs, you let it out.
When you get a call from the campus police because of an unfortunate drinking episode, you really crank it in.
That’s how it goes with new ventures, except that you can’t replace your kid. You can—and should—replace a new venture’s leaders if too much cranking is required.
Ultimately, you want this iterative process to lead to a new venture having more and more autonomy.
Now, we all know that in large companies, brand-new ventures have neither the results nor the political capital to get their own shops. In small companies, it’s too easy to fold a new business into the core.
But autonomy gives people ownership and pride. In ideal situations, new ventures with strong leaders should have all their own tools, like their own R & D, sales, and marketing teams. They should be allowed to place their own audacious bets on people and strategies.
My commitment to autonomy for new ventures has its roots in my earliest days as the venture manager for Noryl, the new plastic that had about as much promise as mud when we started experimenting with it in 1964. But as soon as the team got Noryl’s chemical composition to work and eliminated its technical flaws, I fought for my own operation.
The higher-ups thought I should use the pool sales force and let Noryl be sold in the basket along with GE’s other plastics. But I believed that no salesperson in the world would push Noryl, which was landing $500 orders in those days, when he had Lexan to sell in $50,000 batches to Boeing or IBM. As far as I was concerned, you could sell Lexan sitting in an armchair—Noryl needed maniacs running around! I made this case with enough fervor and persistence—in other words, obnoxiousness—that after a couple of years my bosses relented.
When Noryl finally got on its own, it took off—all of us felt and acted like entrepreneurs, albeit with a big bank in our back pocket. Over the next two years, Noryl grew by leaps and bounds. In 1969, when I was promoted to run the entire Plastics division, I kept Noryl as a separate business because—even with its successful launch and rapid growth—I thought it would still benefit from autonomy. In fact, Noryl (now a billion-dollar