March 09, 2014 at 03:45PM
"[T]hree policies for keeping the growth engine running..." #readingToday

We suggest three particular policies for keeping the growth engine running. Taken together, the policies force the organization to start early, start small, and demand early success.

Launch new-growth businesses regularly when the core is still healthy— when it can still be patient for growth— not when financial results signal the need.

Keep dividing business units so that as the corporation becomes increasingly large, decisions to launch growth ventures continue to be made within organizational units that can be patient for growth because they are small enough to benefit from investing in small opportunities.

Minimize the use of profit from established businesses to subsidize losses in new-growth businesses. Be impatient for profit: There is nothing like profitability to ensure that a high-potential business can continue to garner the funding it needs, even when the corporation's core businesses turn sour.

The Innovator's Solution, Clayton Christensen