Profit from the Core - A growth theory is put to something of an empirical test and OUCH!
One of the more popular books on growth in recent years has been Profit From the Core, a book that suggests firms should focus their efforts on core and adjacent markets to find growth opportunities. I've found it to be thought provoking and intelligently written. I've never taken the trouble to double-check the research, however. Blogger Thomas Thurston, however, did. In an interesting blog post he describes a small empirical test he did using business units to try to replicate the results reported in the book.
His conclusions?
Firstly, that the categorization of businesses into various types of adjacencies was highly subjective and dependent on the rater doing the classification. About as robust as one could get was "core" or "not core".
Secondly, that the prediction that adjacent ventures would do better than non-adjacent ventures did not hold up. About the only predictable result was that core initiatives did better than either adjacencies or non adjacencies in terms of survival. There was no difference in his sample between the other two types of venture.
I found that interesting!
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- Posted Rita McGrath on January 07, 2011
Free Download of Interview in Harvard Business Review for the first 100 subscribers
This month's Harvard Business Review features the partial transcript of an interview that I did with Sarah Cliffe on how one can tell if your business model is in trouble.
The Review has offered free digital downloads for the first 100 people to click on the link.
The link is https://archive.harvardbusiness.org/cla/web/pl/product.seam?c=8012&i=8014&cs=c13bdd675d3c7e11e5cbfac93dd41ed9
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- Posted Rita McGrath on January 05, 2011
When life hands you lemons…AOL Style
What can you say about a 25-year-old web portal that has lost its grip on the public imagination? I refer of course to AOL, which for many of us was our first introduction to the joys of the Internet. It's iconic "you've got mail" tag line even became a well known movie!
I still log on to my aol account every now and then, and had to smile, darkly, at one of their latest promotions. They have "freed up" millions of usernames. That is marketing speak for millions of people dropping their service. The good news for you, oh prospective customer, is that the dream username you always wanted but that was taken by someone else may actually now be available!
Oh well, I guess if you have reversals you might as well try to make the most of it.
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- Posted Rita McGrath on December 21, 2010
New Podcast about Business Models
In this podcast, I discuss issues regarding business models, with examples ranging from firms such as Kodak, CEMEX and Bose. Have a listen! Feedback always welcome.
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- Posted Rita McGrath on December 03, 2010
Sagantia Innovation Boot Camp - Kick Starting Innovation
Sagantia is a UK based technology and product development company that I've been studying as part of the research for a new project. Among the many interesting things they do is run an innovation boot camp (click on the link to download a case description), which has many characteristics in common with other innovation sessions that I have organized myself. It's got a lot of similarities to the driving organic growth and innovation program that Bob Cooper led for some time at DuPont and for other companies. Among the salient features:
- Rock-ribbed senior level commitment from the top to provide resources once an idea is endorsed
- Time to focus on ideas that could lead to possible business, rather than shoring up existing businesses
- Facilitation by experts with a process architecture (in the Sagantia case, it's a three week intensive process; in the Market Driven Growth case it involves several iterations over a few months)
- Input from external experts and customers as well as insiders
- Clear decision points and clear decision criteria
- Generation of lots of ideas to get to a few that might be worthwhile
- A process of true engagement, not just an 'event' or lip service
We've all been part of those horrible 'no idea is a bad idea' brainstorming sessions where everyone has a good time and nothing ever happens. Case studies such as the Sagantia example can help us from getting off on the wrong track.
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- Posted Rita McGrath on August 13, 2010
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