The Infant New Venture
Business are not paid to reform customers.
Above all, the people who are running a new venture need to spend time outside: in the marketplace, with customers, and with their own sales force, looking and listing. The new venture needs to build in systematic practices to remind itself that a “product” or a “service” is defined by the customer, not by the producer. It needs to work continuously on challenging itself in respect to the utility and value that its products or services contribute to customers. The greatest danger for the new venture is to “know better” than the customer what the product or service is or should be, how it should be bought, and what it should be used for. Above all, the new venture needs willingness to see the unexpected success as an opportunity rather than as an affront to its expertise. And it needs to accept that elementary axiom of marketing: Businesses are not paid to reform customers. They are paid to satisfy customers. Lack of market focus is typically a disease of the “neonatal,” the infant new venture. It is the most serious affliction of the new venture in its early stages – and one that can permanently stunt even those that survive.
The Rapidly Growing New Venture
The more successful a new venture is, the more dangerous the lack of financial foresight.
The lack of adequate financial focus and the right financial policies is the greatest threat to the new venture in the next stage of its growth. It is, above all, a threat to the rapidly growing new venture. Suppose that a new venture has successfully launched its product or service and is growing fast. It reports “rapidly” increasing profits” and issues rosy forecasts. The stock market then “discovers” the new venture, especially if it is high-tech or in a field otherwise currently fashionable. Predictions abound that the new venture’s sales will reach a billion dollars within five years.
Eighteen months latter, the new venture collapses. It is suddenly awash in red ink, lays off 180 of its 275 employees, fires the president, or is sold at a bargain price to a big company. The causes are always the same: lack of cash; inability to raise the capital needed for expansion; and loss of control, with expenses, inventories, and receivables in disarray. These three financial afflictions often hit together at the same time. Yet any one of them by itself endangers the health, if not the life, of the new venture. Once this financial crisis has erupted, it can be cured only with great difficulty and considerable suffering.
Managing Oneself: Revolution in Society
Managing oneself is based on these realities: Workers are likely to outlive organizations, and the knowledge worker has mobility.
Managing oneself is a REVOLUTION in human affairs. It requires new and unprecedented things from the individual, and especially from the knowledge worker. For, in effect, it demands that each knowledge worker think and behave as a chief executive officer. It also requires an almost 180-degree change in the knowledge workers’ thoughts and actions from what most of us still take for granted as the way to think and the way to act.
The shift from manual workers who do as they are being told – either by the ask or by the boss – to knowledge workers who have to manage themselves profoundly challenges social structure. For every existing society, even the most “individualist” one, takes two things for granted, if only subconsciously: Organizations outlive workers, and most people stay put. Managing oneself is based on the very opposite realities. In the United Stats MOBILITY is accepted. But even in the United States, workers outliving organizations – and with it the need to be prepared for a second and different half of one’s life – is a revolution for which practically no one is prepared. Nor is any existing institution, for example, the present retirement system.
A Noncompetitive Life
No one can expect to live very long without experiencing a serious setback in one’s life or in one’s work.
Given the competitive struggle, a growing number of highly successful knowledge workers of both sexes – business managers, university teachers, museum directors, doctors – plateau in their forties. They know they have achieved all they will achieve. If their work is all they have, they are in trouble. Knowledge workers therefore need to develop, preferably while they are still quite young, a noncompetitive life and community of their own, and some serious outside interest. This outside interest will give them the opportunity for personal contribution and achievement beyond the workplace.
No one can expect to live very long without experiencing a serious setback in one’s life or in one’s work. There is the competent engineer who at age forty-two is being passed over for promotion in the company. The engineer now knows that he has not been very successful in his job. But in his outside activity – for example, as treasurer in his local church – he has achieved success and continues to have success. And, one’s own family may break up, but in that outside activity, there is still a community.
