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A model for entrepreneurs transitioning from startup to sustenance phase
A discussion with Ed Zander, CEO, Motorola

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I divide an entrepreneur's life into three distinct phases: initiating (dreaming up grand ideas, making paradigm shifts, putting a team together, funding, etc.), establishment and growth (attracting customers, serving them well to gain additional business, and diversifying into related business), and finally, sustenance (maintaining the growth and values of a company in a changing environment). The transition through the stages is not always easy for an organization and its founders. In many cases, the consequences can be disastrous to the business due to poor performance. 

A simple solution for an entrepreneur who is good at coming up with grand visions and making them happen on a small scale is to pass on the controls at the right team to someone who is stronger in sales, marketing, and operations. This is not always easy or possible. Most entrepreneurs find it difficult to part with their 'baby' and they are much more willing to learn new skills instead to stay close to the business. Ed Zander, the CEO of Motorola, agrees this approach to running a business. He has a lot to teach all those entrepreneurs who are faced with the challenges of sustaining a business in an environment with rapid changes in technology and competitive landscape.  (Related link:  What is Zander's strategy for creating high-value companies?)



Zander likes to say that there is no substitute for good execution in business. That is so true for entrepreneurs who can be excellent at coming up with the next big thing but often do not do an equally good job at execution, particularly when the business is established. Talking about Motorola prior to starting his new job there, he said in an interview, "(Motorola) They need to operate and behave like a fast, execution-minded, results-oriented, accountable-type organization." Motorola is a classic example of a company that is in sustenance phase. No one can accuse Motorola of being poor at identifying or developing exciting new technologies. The area in which Motorola has failed, though, is maintenance of its core values in a business environment that can change in a matter of months. It is at this stage of a company that it becomes critical to focus on delivering value to your customers through a good understanding of changing needs and helping them stay ahead of their competition. And in Zander's opinion, these are challenges that any entrepreneur must try to enjoy.

Thriving in the sustenance phase

It is easy to grow your business in the early stages particularly if you have a clearly identified path to create value for your customers. However, once you develop a solid base of customers and a broad product portfolio, the challenges are much greater. (Related link:  Key account management)  The competitors move in and, more often than not, learning from your experiences, they can actually do things better than you. Zander has good advice for business leaders in this situation. "Make sure your market still exists. This means you must really know your game, know your opportunity, and know your customers better than they know themselves. That is why I am spending so much time on the road these days basically meeting with customers and key employees. Once you have listened to the voice of the customer, take another look at your business model. Does it hold together in the new environment? What changes do we need to make? And finally execute the promises you make to your customers and employees," he says.

Zander is not afraid of changing course either if the current approach is not working. He says, "You must be ready to make decisions quickly, take risks, and stare the possibility of failure straight in the face. It's amazing how many managers and executives want to play it safe. But playing it safe will not produce results in today's business environment. The only way to succeed is to get out of your safety zone, think big, break the rules, and take some risks. You may encounter a failure along the way, but the lessons learned from such a setback can prove more valuable to your company than anything else."

Going beyond the sustenance phase

No entrepreneur likes to be in the sustenance phase. "It's boring," say many of my entrepreneur friends. Many of them would simply like to leave the day-to-day operations to someone else to focus on what they do really well, that is, innovate. Zander does not disagree with that approach, as many entrepreneurs like Bill Gates have already done.

Zander believes, however, that a business leader should try to add value wherever he can and this close interaction with business operations can actually be a catalyst for innovative ideas. He favors staying close to the business because only through intimate interactions with customers and employees can one identify the 'big ideas' that get entrepreneurs excited.

Running away from what you don't like to do is not the solution. Create a venture group within your organization and let it be a startup funded by the parent company. But do not lose focus and do not abandon your core values. Also make sure that you can rally your troops behind you. More importantly though, Zander advises, "Make it happen and keep your business model simple."

Recommended articles:  How to start a business?         Partnerships between enterprises

How to pursue products with short life cycles?   Tips for entrepreneurs on networking with potential investors and partners

Note:  This article was written for TIECON04 where Ed Zander was a keynote speaker.

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