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| | Brought to you by Alex Panas, global leader of industries, & Axel Karlsson, global leader of functional practices and growth platforms
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| | | | Leading an organization can feel a lot like working out at the gym: You build the muscles that are most important for reaching your goals. But which ones could use a little more training? Increasingly, leaders are focusing on developing their business-building strengths to help push their organizations forward. Companies can attract more customers, generate more revenue, and achieve higher organic growth by creating new products, divisions, spinouts, or joint ventures. This week, we look at some lessons leaders can learn from organizations that have succeeded in launching and scaling new businesses. | | | | | | | |
| | | The more often that companies create new businesses, the better they get at doing it. To build those muscles, McKinsey’s Jorge Grieve, Nimal Manuel, Timothy Yap, and Vivek Lath recommend that organizations create a new-venture factory (NVF), a specialized unit designed to support business building and speed up innovation and growth. Companies that have flourished in launching multiple ventures use an NVF to incubate ideas by bringing together key resources: for example, technical and data assets and experts in business building and operations. An NVF can also help sustain success with new ventures by tapping into the parent company’s strengths—including leaders, data, and products—and by developing smart business portfolio strategies. “Getting the full value from building multiple businesses requires the NVF to have portfolio management skills,” the authors say. “In this way, the corporation not only increases the chances of overall success by distributing risk but also creates a central point for managing decisions and allocating funds for the maximum benefit of the business.” | | |
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| In new ventures, early setbacks can become launching pads for growth. For sennder, a European digital road-freight-forwarding company founded in 2015, one such obstacle inspired the company to move beyond its start-up mentality. In an interview with McKinsey’s Max Flötotto and Tobias Henz, cofounder and CEO David Nothacker recalls that sennder initially processed its invoices manually, which created delays that could potentially harm customer relationships. In addressing that issue, he realized that he could not solve every problem himself. Rather, he needed to improve decision-making and role clarity within the leadership team. “Challenges like these have been catalysts for our growth,” Nothacker says. “Each one has forced us to adapt quickly, streamline our processes, and implement stronger corporate governance. Today, we’re more agile and resilient because of those early experiences.”
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| Life sciences companies have long viewed healthcare providers and payers—rather than patients—as their key customers. But that strategy is changing. With consumer health apps growing more and more popular, pharmaceutical, biotech, and medtech companies are launching digital consumer tools for health issues ranging from dietary changes to menopause. Many of these companies are also struggling with these new ventures, observe Senior Partners Arun Arora and Jake Henry and their coauthors. “Launching a new business is never easy; it takes a huge amount of strategic planning and execution,” they say. “And the process is doubly hard in life sciences, where new ventures can fail due to regulatory complexities, talent acquisition issues, and lackluster go-to-market strategies.” The authors outline five main pitfalls for life sciences CEOs to avoid when building patient-centric businesses. Among them are relying too heavily on in-house regulatory and compliance expertise, moving too slowly to develop and launch new products, and depending on healthcare providers to drive sales. | | | Lead by bringing new businesses to life. | | | | | — Edited by Eric Quiñones, senior editor, New Jersey
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