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| | Brought to you by Alex Panas, global leader of industries, & Becca Coggins, global leader of functional practices and growth platforms
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| | | | Launching new ventures is a top priority for many organizations as they seek to create growth in today’s challenging business environment. To successfully build a new business, leaders must start with a great idea and establish a strong foundation of strategy, governance, and culture to support it. Critically, the CEO must take full ownership of this effort and remain closely involved at every step. This week, we look at how CEOs can most effectively push new ventures forward while continuing to guide their core businesses. | | | |
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| | | Executives across an organization—from marketing to finance to HR—must be deeply involved in the many decisions and actions needed to launch and scale new businesses. But the success of such initiatives ultimately depends on the top leader, say McKinsey’s Daniel Aminetzah, Jorge Grieve, and Paul Jenkins. “It’s the CEO who plays the most central role in resolving the timelines and tensions between new growth and the existing business,” they observe. In particular, the authors identify four areas where the CEO must focus to support new ventures without compromising the parent company’s brand or operations: | | | | | establishing venture building as part of the overarching corporate strategy, not a side effort | | | | | | | deciding where to play and what to build while embracing a venture-capital-style mindset of launching multiple ventures at once | | | | | | | committing capital with patience, accepting some short-term risk while keeping long-term goals in mind | | | | | | | developing the right culture, talent, infrastructure, and partnerships to sustain the company’s commitment to new ventures | | | | |
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| | | “AI is resetting the assumptions that have governed business building for decades. The constraints that once defined business creation—team size, capital requirements, and time to market—are being rapidly rewritten.” | | | McKinsey’s Chris Smith, Daniel Aminetzah, Fabian Metzeler, Jason Bello, Paul Jenkins, and their coauthors say that AI can create value for business builders by accelerating innovation, enhancing productivity, and helping companies launch products faster and at lower cost. For leaders, this means ventures that once seemed too risky or expensive may now become more viable. “Those who rewire business building around AI as a foundational capability—with human expertise at the center—will pursue more ideas, validate them faster, and scale winners earlier,” the authors say.
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| When it comes to business building, serial innovators are more likely to win. McKinsey research shows that organizations starting three or more ventures at once can achieve up to 30 percent higher revenue growth over time than companies that launch a single new business. “Every piece of business building is a little bit of a step out from what companies traditionally do. When you repeat that process, you build that muscle,” Senior Partner Jason Bello says in an episode of The McKinsey Podcast. Serial business builders benefit from taking a portfolio mindset—namely, understanding that not every new venture will thrive, just as not every merger or product launch will succeed. “They also naturally get more comfortable killing things early when they don’t meet the customer or performance milestones early on,” Bello notes.
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| Whether their focus is on new venture opportunities, disruptive technologies, workforce changes, or any of the myriad forces shaping businesses today, CEOs have a defining responsibility: to own the story. Now more than ever, strong communication skills are critical for effective leaders in any industry, and CEOs must embrace the role of storyteller in chief, say McKinsey’s Blair Epstein, Shelley Stewart III, and their coauthors. “Pressure remains on them to be transparent and ever-present,” the authors note. “Stakeholders want to hear a singular narrative from CEOs about what’s happening on the ground and how the company intends to prepare, adapt, navigate, and otherwise lead through change.” Serving as the lead storyteller means the CEO will set the tone for the organization; articulate the company’s culture, purpose, and values; and be the deciding voice on issues that matter the most. | | | Lead by setting the course for new ventures. | | | —Edited by Eric Quiñones, senior editor, New Jersey
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