Page 59 - Grow from Within Mastering Corporate Entrepreneurship and Innovation

46 grow from within

Horizon 1 (H1): Ongoing business
Horizon 2 (H2): New products or businesses in a rapid
scaling phase
Horizon 3 (H3): New opportunities, typically premarket

H3 projects, which include most corporate entrepreneurship
projects, are likely to incorporate a range of factors that are
unfamiliar to the host firm. For example, they can present new
sales force requirements; new channels to market; radically
new value propositions; immature capabilities for execution,
service, and support; and so on. Corporate entrepreneurship
management in the H3 context often demands unfamiliar and
counterintuitive choices, which is why it is the focus of much
of the innovation literature. Applying profitability or revenue
growth metrics to H3 businesses makes no sense, as so many
factors remain uncertain. Improperly applied profitability, rev-
enue, and even return on investment (ROI) hurdles lead to can-
cellation of many viable H3 projects. Many of the challenges
2
of corporate entrepreneurial ventures can be traced to the sub-
stantial differences between H1, H2, and H3 businesses. Many
of the approaches we describe in the following chapters deal
with issues created by these distinctions between ventures at
various stages of maturity.
Corporate entrepreneurship is not new, but the intentional,
intelligently managed version is a relatively recent phenome-
non. As is often the case with terra nova, there is a great deal of
room for innovation and reward. Yet building new businesses
is not for the faint of heart. It is for companies and executives
who aspire to lead the growth industries and markets of the
future, or to carry tired traditional businesses toward better
horizons. It is for companies that recognize the power of the
established enterprises that they’ve built, and the ways in
which their assets and capabilities can lead to growth and prof-