Business Forum: How can new managers establish leadership?

Dec. 1, 1999
I landed a general-manager position in a small company because of my technical reputation...
1304qa Chang New
Q: I landed a general-manager position in a small company because of my technical reputation. Given that I have been working as a project manager in a national laboratory, where should I begin?

A: Congratulations! This must be exciting. Conventional wisdom for establishing leadership is to make decisive moves quickly. Swift action is important because people are expecting the new leader to make changes, and they go so far as wishing the new leader will remove all their frustrations. If nothing happened, soon the pendulum would swing the other way. So you don't want to miss that window of opportunity in the beginning. Even though you are not in a position to make big moves because of your lack of business experience, you'll still want to make some changes quickly even if they are small or symbolic in nature.

Think of it this way. The big-picture issues, especially those relating to business strategy, will take you a while to analyze and to sort out all the data thrown at you. You don't want to make these big moves in haste without being thorough. This inactivity could lead people around you to think that you are an indecisive manager. However, by taking actions swiftly on smaller issues that you can understand quickly, you'll gain the respect of people around you, establish a pace for action, and also avoid the image of being a lethargic leader.

Given that it takes time to learn the nuances of a business on your own, you may want to retain a retired CEO as a mentor or consultant to help you with an independent and unbiased view. You want to take action as quickly as possible once the strategy is formulated. When making decisions, keep in mind that you now have finite resources and that you are responsible for a for-profit organization. You'll also want to work closely with a lawyer and an auditor to avoid any legal or regulatory landmines.

Q: Besides patents, what else can give a medical product competitive advantages in a global market?

A: Differentiation from your competitors is what gives you the edge. We engineers have a tendency to focus on the technological differences in the product. In reality what customers care about are the added values like performance, price, and service. Relationships with customers are very important, because the perceived values are tempered by judgment. For example, most of us think of performance in terms of black and white specifications. But every customer has particular needs and will put more value on certain features than others. By having a good relationship with the customer, you can help the individual evaluate trade-offs, not to mention getting the feedback to define your product. And because competing products are not identical in performance, price comparison isn't hard and fast either.

Service can be broadly interpreted as the entire experience of getting and using the product. "Staple yourself to an order," said a well-known marketing professor in his book of the same name, and that is a useful slogan to help you think through the details of how to reach a potential customer, close the sale, and follow through after the sale. As you included international sales in your thinking, you should also give serious consideration to the overseas distribution channel. People won't buy if they don't know about your product or if it is too much trouble to buy it.

Q: My VC investors want me to go full-steam ahead just as if I own an existing market, whereas I fear running out of money because I am behind schedule.

A: Starting a company begins with a vision. Then you apply resources and do everything humanly possible to make that vision a reality. There is a bit of self-fulfilling prophecy involved here because if you pause or hesitate, you increase the likelihood of losing the game. For example, what would you do if product development is slower than planned? If you put off installing a complex piece of production equipment, you may set up a potential bottleneck that could result in missing the market window. If you do put it into production, the new machine and the production staff may very well sit idle and you would run out of money sooner. VCs have a tendency to go for it with an all-or-nothing mindset because running out of money is not one of their usual problems. If things go well, they can always make more investments to maintain or expand their ownership. The entrepreneur, on the other hand, tends to worry about the dilution that would result from additional investments. Assuming you are not encountering fundamental science problems, I tend to side with the VCs. Starting a company is basically an offensive game, and being successful should be the sole consideration.

About the Author

Milton Chang

MILTON CHANG of Incubic Management was president of Newport and New Focus. He is currently director of mBio Diagnostics and Aurrion; a trustee of Caltech; a member of the SEC Advisory Committee on Small and Emerging Companies; and serves on advisory boards and mentors entrepreneurs. Chang is a Fellow of IEEE, OSA, and LIA. Direct your business, management, and career questions to him at [email protected], and check out his book Toward Entrepreneurship at

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