A new $200 million strategic business unit (SBU) of this global technology services corporation has grown rapidly after its initial launch through a succession of large contract wins.Having achieved a strong initial foundation in its core vertical markets, the leadership of the SBU identified significant competitive and regulatory changes that had the potential to impact the unit’s future growth potential. With the potential for slower growth, the leadership team recognized the urgent need for additional investment capital to strengthen the market position and reaccelerate growth for the unit.
As one of the newest and smallest units in the corporation, the SBU was in fierce competition for corporate investment with larger, more mature business units. At the corporate level, the leadership team was challenged with strategically allocating a limited pool of resources between the new SBU and the legacy business units. Leadership had to balance the need to support the legacy business, which contributed the vast majority of current revenue albeit at relatively low growth rates; and the new SBU unit, which had a much higher growth rate and higher potential for future growth.
The corporation adopted an internal corporate venture capital competition. Under this innovative approach, the SBU leadership and the larger business units would be challenged to develop and “pitch” new strategic growth platforms to an outside board of experienced investment banking, private equity and venture capital executives. The 6-week long competition was designed to use future corporate value creation as the basis to attract corporate investment.
To create the most compelling and attractive future growth platform, the SBU leadership adopted a recommendation to “act like a start-up” in approaching the venture competition. The SBU launched a collaborative, codesign process that engaged a multi-disciplinary team of SBU employees from multiple levels of the organization: • Facilitated a series of “de-construction” workshops with the SBU’s senior executives, corporate development executives and front-line managers to visualize the unit’s current relative market position, financial model and corporate expectations. The workshops focused on analysis of the new regulatory changes and the various operating dimensions of the business to include the existing business model, value proposition, target customers, competitors and offerings. • Based on the preliminary workshops, the team attended a series of “re-construction” workshops to design and develop the unit’s next generation growth platform Using a series of ideation and creative exercises, the team produced a wide range of innovative strategic growth options and high-potential business models. • The team explored the portfolio of new growth options and rationalized them against corporate capabilities, competitive forces, market potential and speed to market to create and communicate the new strategic growth platform. The new options where formulated into a new growth platform that prioritized the opportunities, established the resources and corporate investment that would be needed to support the new business model
The SBU senior executive successfully presented the new strategic growth platform to the internal corporate venturing board and received support for the requested investment commitment and support to pursue the new high-growth market space and satisfy unmet market needs with a new target customer profile, a differentiated services portfolio, and a new business model. The initiative had the secondary effect of infusing the SBU and the corporation with a tangible, repeatable and entrepreneurial new process that can be re-used to help the company continuously identify and exploit future growth opportunities.
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