Page 264 - Grow from Within Mastering Corporate Entrepreneurship and Innovation

Appendix B 249

but fast-moving markets such as electronics and semiconduc-
tors, where resources were available, technology changed rap-
idly, and competition was fierce, many corporate venture
groups thrived. Two of the pioneers, Intel Capital and Motorola
Ventures, returned billions of dollars of value to the parent
company. Robert A. Burgelman and Liisa Välikangas reported
in a 2005 issue of MIT Sloan Management Review how, at many
companies, corporate venturing efforts tended to be scaled
back when fortunes changed. Moreover, they were often vul-
nerable to changes in leadership and strategic priorities.
The Internet boom of the late 1990s further encouraged
large, established companies to rethink both threats to their
core businesses and new market opportunities. A few began
and sustained new approaches to seeking growth from within.
Some of the earliest efforts at deliberate new business creation
began in 1999 at companies such as DuPont, IBM, and
Whirlpool and continued with entrants throughout the 2000s,
such as Cargill, Cisco, and Motorola. Also, the increasing role
of services relative to manufacturing in modern economies
broadened the focus of corporate innovation efforts beyond
technologies and products. Industrial companies like DuPont
and GE derived more and more of their revenues and margins
from knowledge and services, often wrapped around core
products like chemicals or aircraft engines. By 2005, only a
minority of DuPont’s revenues came from selling bulk chemi-
cals. Even technology stalwarts like IBM and HP built massive
services businesses. By 2008, over half of IBM’s business
focused on services. Companies as diverse as McDonald’s, Tar-
get, and Bank of America formed innovation teams dedicated
to conceiving and prototyping new kinds of consumer experi-
ences aimed at growth and customer satisfaction.
Taken together, companies in the late 1990s began experi-
menting with new ways to drive organic growth through reg-