Currently, only 7 percent of companies are able to capture the benefits of speed and scale. These include some of the world’s best-known digitally native businesses – the likes of Apple and Amazon – but generally, businesses are faced with a challenge that they are finding difficult to overcome. They are crippled by the growth dilemma.
The growth dilemma sees most organizations unable to continue scaling their core business while also investing resources in disruptive, new opportunities – the kind of innovations that will open up new markets, even create entire industries. At Innoleaps, we believe that there are six pillars that are essential to enabling businesses to break through this growth dilemma, and the first concerns growth governance.
Steering two engines
In order to break through the inertia that hampers many organizations, businesses must adopt a dual-engine approach. While they cannot neglect their core business (delivering on legacy brands and product lines) the executive board must also steer the company’s Growth Machine (disruptive innovations that go from idea to scale).
In order for businesses to embrace disruption, there must be buy-in from senior management teams. And for that to happen, the right growth governance model must be created, one that gives employees the freedom with which to explore and launch new business models – in a structured way.
True innovation may be disruptive, but it should not be chaotic. The right growth governance directs businesses to take risks in the right areas, to think carefully about where they want to build new ventures. Crucially, it also provides accountability. What does it mean for a new venture to be successful? What are its growth ambitions and revenue targets?
Crucially, the right growth governance policy allows senior management to keep abreast of innovative new approaches while not neglecting their core business offerings. Where successful, the new initiatives that are developed as part of a company’s Growth Machine can inform and be incorporated within the core business.
Establishing the right growth governance begins with putting concrete, predictable timelines in place for new ideas. Businesses should examine when it is realistic to bring new ventures to market, putting milestones in place for each phase of the new product and highlighting what sort of investment will be required to achieve it. When you set up a new venture within the context of an established company, it is vital that it is predictable. Innovation is, most of the time, a black box – this needs to change
Corporations are accustomed to generating large amounts of revenue – but big opportunities don’t start out delivering these big sums. Hence, they often get ignored. Within an established company, a corporate venture team should be able to forecast the scalability potential of new ideas for the immediate and near future. This will deliver the big numbers that corporates need before they allocate resources for a project.
In order to truly express the scalability potential of a new venture, growth governance must incorporate forecasting that explores the possibility of using existing channels or brands to scale new ideas. This is why it is vital that new ideas are chosen wisely. If you start with an idea that is too disruptive or that involves a completely different business model, the likelihood that you can scale this within the setting of a corporate company is low. You will get alignment much faster and you will be able to make more of an impact if you can scale your idea using existing channels.
How we can help
At Innoleaps, we have helped numerous clients put new growth governance structures in place. We run full-day interactive workshops that help executive boards set up “dual-core governance,” the kind that embraces innovation while keeping core business processes on track.
We show our clients how to create a venture board – one that contains a diversity of viewpoints, from the c-suite, R&D departments, and relevant business verticals. We show businesses how this board can set goals and strategy, secure the necessary financial and talent resources, and manage its portfolio of new initiatives.
At Innoleaps, we aim to ideate, validate, test, and launch new businesses in the space of just months. Our timeline delivers clear accountability that takes new ventures from the problem-solving stage to product development, to launch and, finally, through to the scaling-up process.
Governance is at the heart of the growth machine. By taking an active role as external challengers on your company’s venture board, we can help you put the structure in place to build your internal innovation capabilities. One that ensures both your business engines are heading in the right direction.