But scaling a start-up is very different from managing a large, mature business. It requires thinking about what will be disruptive over the next three, five, or ten years, not just over the next 24 months. Leaders need to think differently about talent and incentives. There’s also the challenge of running a multimodel organization, in which the core is moving at one speed and the new business is moving at another, with different sets of objectives, cultural traits, and ways of working. Managing these separate spheres at multiple speeds to get maximum value for the enterprise is becoming another core requirement for CEOs.
It takes openness to a different way of working and some patience. Companies are not going to see financial results in just three or six months. It’s going to take time. It also takes a willingness to work with different kinds of people, such as by hiring entrepreneurial and founder types rather than seasoned corporate executives. And leaders need to create organizational separation between the core business and the start-up, making sure they avoid any kind of political rancor between the two sides. At the end of the day, it takes a lot of intestinal fortitude. Many new ideas will fail. It’s not about batting a thousand. It’s about making the portfolio work and having a couple hits that can scale.
Interestingly, in our survey we found that CEOs put business building higher on their list of priorities than their direct reports do. That’s because direct reports typically have shorter-term objectives. They have goals they’re trying to meet and typically less incentive to look around the corner. The CEO’s challenge includes how to bring these people along on this journey.
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