Perfect Biz Match | Transform | Moving From the Jungle

Moving From the Jungle

One of your organization's inventions or adaptations is so new and different that it has created a new business and has put you into a new market and/or distribution channel.

You are part of an established organization whose products or services normally compete in very contested markets. The organization relies heavily on innovation to compete with other hunters. However, its new product or service substantially changes (or will soon change) the way the enterprise does business, moving all or past of it out of a jungle and into a frontier.

Key Issues
This situation is both risky and rife with opportunity. On the one hand, innovation is no stranger to your organization. Your people understand the relevant issues and dilemmas very well. On the other, the entire organization has been designed to focus almost entirely on its customers, and on the efficiencies needed to operate with ever-shrinking margins. This climate may actually get in the way of your making the most out of your new, potentially dominating, product or service.

Furthermore, hunter organizations often have some difficulty distinguishing between extensions - take-offs on existing products and services (e.g., audio books) - and products and services that are truly new to the world (e.g., e-books). This is because, in a jungle market, almost any improvement or extension causes a product or service to be marketed as something supposedly new.

The best way to identify a truly new-to-the-world product or service is that it has the potential to significantly change consumer behavior. Typically (though not necessarily), it also includes or makes use of some new technology.
For example, inkjet printers use a very different technology from both laser and dot matrix printers. It also changed consumer behavior by bringing color printing to the masses. Precisely because Hewlett-Packard's invention was much more than an extension of the laser printer, H-P formed a new division to separate its inkjet printers from its laser printers.

In a hunter organization, designers usually work closely with consumers to figure out exactly what they want and give it to them. But with a new-to-the-world product or service, this process doesn't (and can't) work very well, since consumers have little idea what they want yet. A different design process needs to take place - one based in part on intuition and intelligent guesswork.

Furthermore, a hunter organization's manufacturing systems have been constructed at great cost to build products according to the specifications of customers. In addition, marketing and sales processes have been designed to be congruent with manufacturing. Your new product or service will change some of this. Therefore, unless they are handled properly, the new product or service can become a major disruption to the ongoing business.

Thus it is critical that the new product or service be positioned - and championed - deeply inside the organization, so that resistance is lessened and growth is promoted. Leaders in the organization need to inform all stakeholders of how the new product or service fits into its mission. Leaders also need to be clear and forthright about what impact the new product or service will have on employees, and on the organization as a whole.

It is equally critical to position the product or service in the market in such a way that it has a chance to grow and thrive. This will likely mean using a new or different set of players for distribution, a different kind of marketing effort, and/or a different long-term market image and presence. The new product or service may also need to be priced and/or even branded differently.

Common Difficulties
The emergence of internal rivalries
Even though hunter organizations are used to dealing constantly with innovation, creating and launching a truly new-to-the-world product or service can create a good deal of friction and resistance.

The new division or unit that emerges will require plenty of time, money, and people to refine the technology, build production capability, create a marketing presence, and develop the necessary infrastructure. As the new venture is built up, more and more resources will typically be siphoned off from other parts of the organization to support the new service, product, or line.

Rivalries can thus begin to develop between people who are under pressure to grow the organization's traditional product and service lines and those who are under the gun to get the new product or service established and out of the red. These are natural and unavoidable rivalries, and they should be expected, planned for, and managed.

Lack of marketing acceptance and buy-in
New-to-the-world products and services are not accepted easily by marketing departments that are heavily invested in traditional product and service lines. Truly new products and services may not even show up on their mental radar screens unless management forces the issue. When 3M's marketers were first introduced to Post-it® notes, for example, they thought it was a cute idea, but they resisted any notion that it would change the nature of office communications. It took interventions from outside consultants to simply get a market test, which demonstrated the product's real potential.

The pressures of a hunter culture
No new-to-the-world product or service will be able to withstand the traditional hunter pressures for immediate high performance, close customer involvement, and continual cost reductions. These can kill the initiative needed to create a product or service that works and is acceptable to customers, to develop a mass production process, and to create an effective sales and marketing effort. Only a separate pioneer culture - set up specifically to design, produce, and deliver the new product or service - can provide the appropriate support and initiative.

Solutions
Create a new organization
It will be tempting to try to keep the new product or service within the ranks of one your organization's regular lines. Resist this temptation, however. If you don't, the organization will quickly become enmeshed in management infighting over resources. Worse still, your front line may refuse to accept the new product or service, let alone give it a higher priority than your traditional product or service lines.

The real question should be how and when to separate the new effort organizationally. Some organizations give it the status of a project, with its own management and personnel, but keep it within the ranks of hunter management until it is strong enough to function on its own. This can work if the project is given a considerable amount of protection from the forces mentioned earlier. There will also need to be strong and enthusiastic leadership in order to secure the resources needed by the project.

Another option is to spin off the effort into a completely new kind of enterprise, a la what GM did with Saturn. This new venture may be completely independent, or it may have some limited alliances with the main hunter organization. This decision is very much related to how influential - and how helpful or detrimental - the hunter organization is likely to be. If the long-term plan for the new product or service to become a ruler, a distinct separation from the hunter organization is warranted. But if the future appears to include eventual movement into a jungle market, it probably would be smarter for the new venture to stay at least minimally connected to the organization's traditional product or service lines.

Provide strategic direction from management around long-term interests
At some point this new effort will begin to look more and more like a startup. Therefore, the kinds of support needed by startups are appropriate here. You will need to bring in the funding, time, and people to get the new product or service into the streets.

However, hunter managers are notoriously stingy with these resources and want major justification for every significant expenditure. These justifications can take time and energy away from the very activities that are needed to put the new product or service on the map. Certainly some oversight is needed (and should be provided). But top management needs to be solidly behind the new product or service - financially as well as conceptually. Otherwise the entire new initiative will have been set up to fail.

The best way to get the necessary buy-in - and the needed commitment of resources - is to develop a clear-cut long-range plan for weathering the storms of the frontier and completing the journey to either the kingdom or the jungle. Approval of such a plan means that the new effort will not be left high and dry - or become subject to attack - when some of the inevitable problems of operating in a frontier arise.

This long-range plan should include set priorities, policies, and practices for operating in both the frontier now and either a kingdom or a jungle later on. One example here is pricing. If you have a product or service that is on its way to a kingdom, prices need to be set with significant margins early on, so that the infrastructure and culture needed in a kingdom market can be afforded. But if the product or service is on its way to the jungle, then learning how to be successful with tight margins - and preparing the new organization to be decisive, lean, and aggressive - will be very useful.

Many of the early dot.coms failed precisely because they did not make such preparations. As a result of some very successful IPOs, they were initially awash in money, and made the mistake of developing very prodigal, opulent cultures. When they faced huge battles in the internet jungle, they were ill prepared for it.

Generate joint ownership with the marketing department
Buy-in from marketers is critical, yet often difficult to achieve. One potentially very powerful strategy - and one which can also yield invaluable information - is to include marketers in the design process. Ideally, this cooperation should begin relatively early on and continue indefinitely.

Another useful tool is a series of awareness sessions, to be held with marketing staff as soon as the new product or service has been given a go-ahead by top management. In these sessions, introduce marketing people to the new product or service; then openly discuss issues such as cash flow, growth timelines and expectations, sales projections, and the effect of the new product or service on current customers and traditional product lines.

Adaptation Issues
Managing emotional conflicts and attitudes among employees
The decision to organizationally separate the new product or service will have an impact on all employees. Some hard-core hunter types will want to get rid of the new enterprise; others will see the decision to separate the new venture as a lack of trust in them. A variety of other attitudes and emotions - some justified, some not - will also be present.

Management needs to make it abundantly clear to all stakeholders that the purpose of the change is to foster the new product or service while continuing to grow the traditional ones. It is vital that management listen to and respect the concerns of everyone who is affected. Some people who remain in the larger hunter organization will feel left behind. Some going on to the new pioneer enterprise will be uncomfortable with the displacement and/or the risk.

Management should sponsor open discussions about the present and future changes and the reasons for them. These should not merely be presentations, but interactive sessions in which employees are given the chance to express their concerns. Those concerns should of course be taken seriously and addressed, to the degree possible. Fears and worries that cannot be effectively addressed should simply be acknowledged. ("Yes, there will be less job security in the new organization. That's a real concern, and it's part of the trade-off for being part of an enterprise that could be very successful, and could lead to career advancement and higher pay for you. If you're very concerned about the reduced job security, let Phyllis in HR know, and ask her if she can change your assignment.")

Widespread understanding and support are essential to making both the old and the new organization work. Merely expecting people to adjust is insufficient. They will adjust eventually, but they will also hold back some of the commitment they could have offered.

There is always more going on under the surface than what people will talk about, and it needs to be addressed if you want people to do their best and stay committed.

Establishing the right kind of management
It is crucial to choose the right people to manage the new organizationand to choose them in the right way. Leadership positions should not be given out as rewards for good work in getting the product or service into the market. (Other kinds of rewards should be given for that.)

Leading a newly-formed pioneer organization into a difficult and ambiguous market environment takes insight, intuition, creativity, and intelligence. Leaders in this new pioneer organization should also know how to create financial stability throughout the development process. This means being able to get resources and buy-in from top management - and to protect the new organization from excessive management scrutiny. Equally important, it means being able to convince people at the top that they need to be patient. In too many organizations, top managers unrealistically expect new products or services to reap huge rewards quickly in order to feed the voracious appetite of Wall Street. This impatience can seriously undermine the discovery process needed to establish a new product, service, or technology. The right person or people at the top of the new pioneer organization can help top management - a group of superbly-skilled hunters - maintain the proper perspective.

It is also critical that leaders in the new enterprise are able to obtain and maintain the freedom to experiment with the new product or service. They need to be allowed to learn by attempting a variety of approaches and solutions, some of which are bound to fail. In a hunter organization, such failures are strenuously avoided; in this new pioneer venture, however, failure should not only be tolerated, but considered a necessary step toward success.

Finding the right staff
It is not enough to have talented, committed people on board in this new organization. They must also be able to function well according to the needs and expectations of a pioneer organization. In some cases, this may mean hiring people from other pioneer cultures; in others, it may mean training capable employees from the larger hunter organization to work in a very different way. Either way, you need to stack the deck with lots of pioneer employees so that they are a clear dominant influence in the new venture.

It is worth spending the time to create profiles of the kinds of people who will be most successful in this new organization. Then - from both the larger hunter organization and the world at large - seek out talented people who fit these profiles. These will need to be people who can be comfortable with ambiguity, a relative lack of supervision, the possible lack of sufficient resources to do the necessary work, and the vagueness and vagaries of the market.

Creating the right structure for the new organization
The primary tasks of a pioneer are to create a product or service; build the capacity to mass-produce it; and secure an entry into the appropriate marketplace. All else - including the design of the new organization - needs to be subordinated to and supportive of these tasks.

The structure of this new organization must allow people the freedom and energy to do jobs that are often ambiguous and difficult. Thus the structure needs to be open and supportive - exactly the opposite of the structure of a warrior organization. Some tasks will be done by everyone as a team; others will require just a few people, or only one. The work groups and relationships will change as the work changes. Some individuals will rise to the forefront of the group at times; others will come to the fore at other times. The only accountability will be the overall progress on the primary tasks and the helpfulness of the support activities. Since the primary tasks will take all the talent present in the group, every effort needs to be made to get the most out of each person. All of this needs to be encouraged and supported by management.

There are some similarities here to what goes on in hunter organizations, where teams are often the norm. However, what is different is the fluidity of the structure. In a pioneer organization, work arrangements change like the weather, from teams to partners to individual initiative, then back again, depending on the task.

Managing the politics of innovation
When new products and services are developed, they tend to gather sponsors and "owners." Each owner would like their own particular products and services to succeed - sometimes instead of other new products or services, and occasionally instead of the larger organization's traditional product or service lines. These owners become active in a process of political influence that creates winners and losers within the organization. This is often entirely unrelated to whether any product, service, or line is better for the organization than another.

Three of the ongoing tasks of leaders in this new pioneer organization are 1) discovering who the various sponsors and owners are, 2) determining what will help them to provide the most constructive support for the organization, and 3) engaging them sufficiently and in the right way so that they provide that support. Ideally, these sponsors should be coaxed into championing the new venture; if that is not possible, then they at least need to accept its presence and its validity. If leaders fail to attend to this task, a surprisingly large amount of effort and focus can easily be wasted in infighting and political maneuvering.