Growing Tomorrow
By Damon Darlin

(Business 2.0) – Your company may be on top now, but someone somewhere is gunning for you. It's easy for yesterday's revolutionaries to become today's reactionaries, warns management guru Gary Hamel. "The wet cement of dogma sets quickly," he says. How does a company avoid complacency? Read on.

Educate the Next Generation GE's Jack Welch (right) would take the executives with the highest potential--"high pots"--and train them to train others in the company. That approach lives on at GE, where teams are asked to tackle real problems. The technique pays off in two big ways:

1. It promotes innovation. "You want to create a burning platform for change even when there isn't a need for one," says Intuit CEO Steve Bennett, a GE alum who learned at Welch's knee. Bennett recently assigned six teams of top managers and junior executives to find solutions to six nagging problems. This isn't the forum for development of new products; rather, it trains executives to set priorities and allocate scarce resources.

2. It helps you spot your replacement. That's the logic behind adding work to already overburdened young managers. When tyros have to spend 20 percent of their time on "action-learning" teams, they figure out how to manage their time and delegate responsibility good and quick. "It forces them to focus on higher-value-added things," Bennett says. Those who thrive are CEO material.

Get Executives out of the Office The growth machine tends to suck up resources and leave employees exhausted. Build time for reflection into the system. Best Buy used a series of offsites to create its Geek Squad and its new chain of Eq-Life big-box health equipment stores. Whole Foods gathers together several hundred employees, shoppers, and shareholders every five years for "future search," an exercise that last year led to improved product displays and store layouts. "People don't want to talk about a job," says Walter Robb, the company's co-president and co-COO. "They want to talk about inspirational things."

Keep the Ideas Flowing To turn all your employees into idea smiths, charge everyone with making improvements. Macromedia's sales staff repackaged the company's multimedia software for sale to teachers and professors; these curriculum-creation packages now account for 25 percent of the company's software sales. But that doesn't mean you should try to do everything in-house. In the era of the "instant company," your business can react quickly because so much of the necessary infrastructure and personnel can now be acquired from other companies. Likewise, new ideas can be outsourced via partnerships and alliances. Procter & Gamble's recent success is due in large part to CEO A.G. Lafley's dictum that 50 percent of new ideas must come from outside.