GrowthBusiness.co.uk: Your gateway to entrepreneurial success

Dominic Houlder, an adjunct professor at London Business School, explains how organisations can mature gracefully while remaining open to fresh ideas.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Transcript

The mid-life crisis, in corporate terms, looks a little bit like the kind of mid-life crisis you might see in an individual. So for a corporation the equivalent of rushing out and buying a red Ferrari, might be a spurt of wild diversification, or for a corporation, the equivalent of settling down to that grim middle age might be a relentless focus on the core and the suppression of innovation as a distraction.

So our question was why do some organisations, under very similar conditions to others succumb to the mid-life crisis, whereas others seem to be able to continue renewing themselves? Our insight was that you’re as mature as you allow yourself to become. There is a fallacy to our mind which is the fallacy that all corporations are doomed to go through some kind of life cycle rather like the life cycle human beings go through.

Well we believe it doesn’t have to be like that and the reason why we believe it doesn’t have to be like that is that companies don’t go through life cycles, it’s opportunities that go through life cycles.

The way to avoid a mid-life crisis is first of all clarity, you’re as mature as you’ve allowed your opportunity portfolio to become. Secondly, the way to avoid a mid-life crisis, is to ask the question, what are the pathologies that are revealed by mapping my opportunity portfolio?

Once you’ve mapped your portfolio of opportunities, the obvious question is what are you going to do about it and that may require a degree of ruthlessness. You may find for instance that as Jim Mcnerny did when he took on 3M that a thousand flowers blossoming philosophy had many, many, many subscale initiatives, what are you going to do about them. Each one of those initiatives are someone’s baby, but there’s a time when as a responsible leader you’ve got to say, it’s an ugly baby.

And the final question that you’ll need to address, in order to avoid the mid-life crisis, is how do we manage the old and the new in a distinctive, appropriate manner?

So we see corporations as collections or pipelines of opportunities and the critical question is this, what have you allowed happen to your portfolio or pipeline of opportunities, because it’s what you did or didn’t do with that portfolio of opportunities that will determine how mature you become.

Dominic Houlder teaches on a two-day programme at London Business School, Unlocking Your Client’s Strategy.