Page 195 - Grow from Within Mastering Corporate Entrepreneurship and Innovation

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ended up spinning off the business, stating that it did not fit
within the corporation’s long-term strategy. This could have
been the right strategic decision, to remain focused on the core,
but the new products were clearly relevant for the company.
However, the design of the new business just didn’t fit neatly
within the company’s established operating model. Mean-
while, members of the senior team continued to beat the
organic growth drum. They expressed pleasure at the genera-
tion of the new business, but by the divestiture, they sent the
unfortunate message to the company that new, relevant busi-
nesses were not where they saw the company going. Thus,
even when corporate entrepreneurs succeed without senior
management support, which is quite rare, their ventures can
be compromised if leadership fails to see the strategic fit within
the established company. Where possible, engage top man-
agement and keep it engaged.
Internal ventures are inherently different from other aspects
of operating a corporation. Most functions, even core functions
such as sales, marketing, and operations, are run by hierarchies
of people who are competent at accomplishing their tasks.
These tasks fit clearly within the company’s established busi-
ness systems. One of the challenges of new business creation,
and one of the reasons that it demands senior management’s
attention, is that by definition, new businesses do not fit neatly
within a firm’s established “business-as-usual” model.
Both active and passive resistance impede new business cre-
ation, creating challenges that require serious attention from
senior management. Active constraints include such things as
capital allocation conflicts (it’s easier to allocate capital to estab-
lished businesses that are making money), turf wars, and inter-
nal concerns over the threat of cannibalization of existing
revenues. These constraints generally result in active behaviors
hostile to new business success. Passive resistance arises from