Feb 18

Corporations can grow new businesses by performing three kinds of balancing acts:

  • Balancing trial and error strategy formulation with rigor and discipline
    • Narrow the range of choices before diving deep
    • Closely observe small groups of consumers to identify their needs
    • Use prototypes to test assumptions about products, services and business models
    • Use nonfinancial milestones to measure progress
    • Know when and on what basis to pull the plug on infant businesses
  • Balance operational experience with invention
    • Appoint “mature turks” as leaders of emerging businesses
    • Win veterans over by asking them to serve on new businesses oversight bodies
    • Consider acquiring select capabilities instead of developing everything from scratch
    • Force old and new businesses to share operational responsibilities
  • Balance new business identity with integration
    • Assign both corporate executives and managers from divisions as sponsors of new ventures
    • Stipulate criteria for handling new businesses over to existing businesses
    • Mix formal oversight with informal support of creatively combining dotted and solid line reporting relationships

Source: Meeting the challenge of corporate Entrepreneurship by David A Garvin and Lynne C. Levesque (HBR:R0610G)

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