My Mogwai got Wet... (or Spin-Out vs Spin-Off)

Do you remember the 80’s Steven Spilberg*s movie Gremlins? If you are around my generation you probably should.

Remember the rules for taking care of Gizmo the Mogwai?

If you expose it to light, you might burn it.

If you get it wet, it will multiply.

And most important, no matter how much they beg, never, ever let them eat after midnight because when they do… they change… they become clever… mischievous… and dangerous.

A few weeks ago I was offered a job as a part- time consultant for a private university that has consulting services for local companies. Having my own consulting company there were some interest conflicts, but the cooperation between us as independent service providers is still open. But the reason I bring this up is why I had been considered a main job candidate. Knowledge, skills and experience in the area mattered to them, but that was not it. The reason I was chosen was because I was TRUSTWORTHY. They had been having some troubles with past consultants where they, (mainly graduate students), had learned all the basic knowledge on methodologies and tools, had gained some experience, and even won some client relationship… and left in order to form their own consulting company with low price strategy.

Basically the University had watered their mogwais and had given them to eat after midnight , therefore mogwais had multiplied, and had become clever… mischievous… and dangerous. Just like having gremlins popping out of your own back! Quickly, burn them!

Consider this process of harvesting your own future competition by the term of Spin-Out.

This happens to a lot of companies and it is especially bad for knowledge or methodology-based companies such as consulting services. But in fact, it is a natural process in business creation, and even business evolution. Of course you can feel disappointed or angry because of the “ingratitude”, a feeling something like” the dog that bit the master’s hand”. But what can you do to prevent it? You can´t restrain employees growth and knowledge in your company, what you want is to have prepared employees that solve your problems and help you gain some money! You could make them sign confidentiality or exclusiveness agreements, but do you expect that a person who has dedicated a big part of his professional life in your business to go out and do something completely new for himself?

What about embracing the fact that your employees are going to leave you one day with all their acquired knowledge and skills? What about instead of cultivating your own competition you developed your own future business allie? This mind shift for managing employees as future mutually-benefic ventures or at least as future coopetition (cooperative competition) is what is called a Spin-Off.

Stop imagining back-popping gremlins and think of the plant commonly referred to as Spider plant. In Spanish it is called “mala madre” (bad mother) because it branches away its siblings, but still they are joined together. The same happens with a spin-off, you guide employees to become their own profitable initiative while being your company’s allie and favoring your own business.

For avoiding spin-outs and fostering spin-offs here are some of my observations:

1. Analyze your company’s needs that reside outside your core competency. Think of the products or services you could outsource or external providers that are not doing a good job. Also think of new departments that you wished you had but won’t actually put your own money to it. Another way of considering future expansions might be specializing a part of your own products or services, like a computer generated animation company spinning-off a traditional movie production industry.

2. Identify group leaders that could easily become spin-outs, especially if they are in a job or have been in a job that gave them your entire company’s overview or gave them sensible information on competitive advantages such as client or provider relationships.

3. Learn their interests and together work out a plan to guide their efforts towards creating the venture identified in point 1, showing them the possible benefits and chance for personal and professional growth.

4. Involve them in projects and trainings that relate to the plan.

5. Be supportive. If they feel they are starting a new venture by your side and probably have you as their first important “client”, they will step up to the challenge in the direction you are guiding instead of an up-front attack by creating a similar company as yours. You can even be an investor; just don’t break the whole point by being the total owner and their boss again.

6. And finally: let go. Build a win-win relationship, knowing they are going to look for their own profit now. Don’t always expect gratitude or a healthy relationship, but it is a good start to have someone you are close with as an allied business.

Assuring that your company has hard-to-copy core competencies, patents, provider or client exclusiveness as well as secure and restricted sensible information combined with personal growth opportunities for intrapreneurship can also avoid spin-outs.

Spin-off is easier said than done, I’m actually working in one in order to combat a high employee rotation metric for a client and also applying it to ChromaticWorks. Let’s see how that works out.

One last thing for all of those who have suffered a spin-out: remember we are as good leaders as the amount of leaders we have created. Wet the Mogwai on your favor!

No comments:

Post a Comment