Page 47 - Grow from Within Mastering Corporate Entrepreneurship and Innovation

34 grow from within

petitive to the status quo. Companies with long-established
dealer networks, like insurer Allstate or office furniture leader
Herman Miller, have confronted this challenge for decades.
Their strength is also their constraint.
Cannibalization of existing product sales, real or perceived,
can generate conflict as well. Any new business design must
account for these factors and objections. Corporate entrepre-
neurship leaders need to know when to bow to tradition and
when to get aggressive, nurturing new channels that might
conflict or pursuing new products that could cannibalize exist-
ing product lines. In these cases, new business designs will
require thoughtful approaches to testing and validating the
effectiveness of the new channel relative to the present state in
order to build a constituency within the company as well as
build a successful venture.
Unlike most independent entrepreneurs, today’s corporations
must consider the health of the new business not only within the
marketplace but within the company itself. Established compa-
nies have ways of killing new businesses even after they have
achieved proof in the marketplace. General Motors created Sat-
urn as a “New Kind of Car Company.” Consumers bought it,
but over time, traditional GM policies and procedures, union
requirements, and other business-as-usual factors conspired to
transform Saturn into “Your Father’s Oldsmobile.”
Keith Bradsher of the New York Times reported in 2005 on
GM’s foray into China in a copartnership with SAIC Motor and
Liuzhou Wuling Automobile, which created one of the best-
selling cars on the market: the Wuling Sunshine minivan,
which costs $5,000 and boasts 43 miles per gallon in city driv-
ing. Philip F. Murtaugh led the effort for GM and is credited
with creating that business’s success by developing a new busi-
ness model and an overall innovative environment. In 2005, he
resigned soon after senior executives reorganized the program