Page 184 - Grow from Within Mastering Corporate Entrepreneurship and Innovation

Which Model Is Right for You? 169

done just as a shakeout in the industry is close to
producing a “dominant design.” They also incorporate the
insights of Christensen, recommending that large firms
apply their product realization advantages over start-ups
to produce simpler, more convenient, or less expensive
solutions based on the dominant design. Once the mass
market has emerged, continuing innovation in business
models is required to hold one’s position.

Summarizing the literature, there appears to be an emerg-
ing consensus on certain aspects of the transition and scaling
challenges. The value of a technology or process innovation
depends on the business model through which it goes to mar-
ket, and continuing innovation in business models is required
to discover the most compelling value propositions for strate-
gically chosen customer segments. As cited in the introduction,
this movement from technology-focused innovation toward
business model innovation was captured in the 2006 IBM CEO
survey, which found that “companies that have grown their
operating margins faster than their competitors were putting
twice as much emphasis on business model innovation than
underperformers.”
But established firms today are generally not good at recog-
nizing and pursuing new business models. Moore’s D-Day
advice is helpful from the customer perspective but has little
to say about internal transitions. Christensen emphasizes the
importance of what we would call “business builders” and the
benefits of organizational separation. IRI/RPI and Garvin and
Levesque focus on planning mechanisms and funding com-
mitments that can help corporate entrepreneurship projects
over the scaling hump and into an organizational home.
Markides and Geroski make the radical suggestion that firms
focus on scouting for external start-ups and develop compe-