Paths to Growth: Choose Wisely

We love a checklist!

Deciding which innovation projects to pursue, and how you'll go about executing it, is no easy feat. And although we know all corporates are heavy on complexity and nuance, sometimes a checklist is the simplicity you need when it's time to make a decision.

The incredible Dave Blakely has gathered the right questions you should ask yourself, when deciding how to tackle your next innovation initiative.

The time to start is now. Enjoy.

By Elke Boogert , Mach49 Managing Editor

Paths to Growth: Choose Wisely

By Dave Blakely , Executive Vice President at Mach49

Look, Ms/Mr Big Company.?

You know that virtually all of your growth comes from only two channels.?

Channel number one is using your existing new product introduction processes to release incrementally new products and services. I’m not diminishing the importance of conventional NPI - these processes are the foundation of organic growth at large companies, even global masters of innovation. The iPhone 15 is glorious but I’m sure you would agree that it’s an incremental advance on the previous phones.?

The second approach to growth through mergers and acquisitions. Nearly every executive I know is in deep with investment bankers, deciding what to buy and what to sell. M&A is also foundational for growth in relatively mature markets, allowing you to penetrate new markets and regions of the world, acquire IP, or complement existing lines of business. And if you’re facing the need to bump revenues up in a hurry, inorganic growth is the faster solution.

Think about your growth strategy honestly. If you're reflexively jumping to either new product introduction or M&A, you're ignoring three terribly important channels for growth: strategic partnering, venture building and venture investing.?

What a missed opportunity

You already have the resources you need to achieve sustainable, rapid, venture-style growth: You've got incredible customers. You've got brand loyalty. You've got delivery channels. You've got remarkable supply chains.

But I know what you’ll say:

Let’s do an exercise. We did this live during the Innovation Roundtable Summit in Copenhagen earlier this week, and it was a big hit. I want you to think about an initiative that's important to you today, a strategic initiative. For example, “I want to attract and retain millennial and Gen Z customers”. Or “I want to participate the the electric vehicle revolution”. Or the one I hear all the time: “I want to do more with AI”.?

Once you’ve identified an initiative that is several adjacencies away from your core business – write it down if you want to – exactly what channel for growth is that initiative best served by? Is this a candidate for an internal venture? Is this a candidate for external partnering, elevating a venture to true partnership status? Is this an initiative that's a candidate to be propelled forward through minority investment in a small, privately held company, like a tech startup??

These are all terribly important avenues for growth and many companies I meet are applying minimal resources or ignoring them.

So… how do you decide?

Look at the initiative you wrote down and imagine building an internal venture. Ask yourself:?

• Would the venture be a core future component of your business?
• Can you carve out a space at your company where governance is lifted and a small group of people are mandated to move quickly??
• Is your venture in a space in which your company already has a right to play through its brand??
• Do you have the internal expertise to create, build, and launch a successful new line of business??

If the answers are Yes, then your initiative is a good candidate for this path.

Option two for your initiative: partnering. Many organizations are pretty transactional with their partners. They hand their ‘partners’ 18 page legal agreements to sign and grind them down on price. I’m talking about elevating a vendor to a true intimate business partner, sharing generative activities to the point that you do not even know who came up with a given idea. But is it a good fit for your initiative? Ask yourself:

• Do you each have complementary and specialized knowledge?
• Do neither of you provide a complete offering, on your own, to effectively penetrate the market?
• Do you have no appetite for capital investment?
• Can you come to an agreement without too much pain, for example a joint go-to market strategy with revenue share?

If the answers are Yes, then partnering is a very powerful tool for growth.

Path number three is minority stakes in small, privately held organizations.

Ask yourself:?

• Can you provide benefits to a venture beyond capital?
• Does the venture focus on something outside your existing core competencies, but does reflect a potential future business opportunity or disruptor?
• Are there multiple competing immature technologies or businesses with disruptive potential, but no clear winner (yet)?
• Is the time horizon to maturity medium-to-long term?(3 – 5+ years)?
• Do you want full control, in order to influence the venture’s path to market?

If so, consider using a Corporate Venture Capitalist Fund for your initiative.?

Does this hit home? I sure hope it does.?

(If you want a checklist-style worksheet for this exercise, here’s a PDF download . We use this with our clients, but I’m happy to offer it to subscribers of the Venture Driven Growth Newsletter at no cost.)

In conclusion, evaluate each big strategic project and deliberately choose the path that fits best. Don't automatically go with what is familiar or comfortable. Be intentional about using any channel, to maximize your organization’s chances of being a market leader 5 – 10 years from now.

Companies bold enough to diversify growth strategies beyond the conventional will find it easier to thrive despite increasing uncertainty and complexity.?

What’s the plan, Ms/Mr Big Company: Stick with conventional growth strategies, or push into new channels for growth and outpace the disruption all around us?

It’s your move.?

As EVP of Mach49’s Growth Institute, DAVE BLAKELY uses his experience at two successful startups and innovation firm IDEO, and his background as an instructor at Stanford and UC Berkeley. He cultivates dynamic new paradigms of training and distance learning, transforming a global network of professionals into successful venture builders and venture investors. Dave works to always be completely present in whatever he’s doing. When he's working, he's 100% present for his clients, and when he's spending time with friends and family, work is the last thing on his mind. As a husband and father, he cherishes his tight-knit group of friends and is deeply involved in his local community.

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