Page 65 - Grow from Within Mastering Corporate Entrepreneurship and Innovation

52 grow from within

people had become adept at selling to their customers’ opera-
tions groups. Operations teams at telecom operators generally
require a return on investment of between 12 and 18 months.
Although Titan showed serious benefits after about 24 months
and exceptional value beyond that, an operations executive
could more easily purchase a traditional circuit-switching
product at a fraction of the cost of Tellabs’s offering.
Cisco recognized that the strategic planning teams at its cus-
tomer firms (the same firms targeted by Tellabs) typically have
a longer horizon, 24 months or more. With that time frame, the
Titan 6500 and the CSR-1 shine. Cisco presented its product to
different buyers within the same customer firms with a revised
value proposition and ended up with a winner. Cisco designed
the right go-to-market strategy to support the new product’s
success, while Tellabs sent a great new product through its
existing business system, leading to failure. Same product, dif-
ferent business system, radically different outcomes.
The Tellabs/Cisco story illustrates the power of new busi-
ness design. Often, a product or service innovation on its own
is not enough to capture a market opportunity. An otherwise
great product might even fail as a result of a poorly considered
or mistargeted business design. By business design, we include
all aspects of launching, growing, and supporting the new
offering in the market: the brand and channels we use to go to
market, the supply chain operating in support of it, the sales
and service teams and their approach, and even the ways we
seek payment from customers. Any grossly misaligned aspect
of the business system can kill a new product.
Corporate entrepreneurship is fundamentally about inno-
vation viewed holistically, in terms of all the necessary com-
ponents of a business system. It is about the creation of
substantial new value for customers and the firm by creatively
changing one or more dimensions of the business system.