Dealflowinformation—Youmayreceivepreferentialaccesstopotentialtransactions(likemergersandacquisitions)withinyourownindustryandwithinsomeadjacentindustries.
■Informationassets
Marketwindow—Youmayhavesuperiorvisibilityandadvanceknowledgeofimpendingmarketmovements—perhapsbecauseyouactasamarketmaker.
Technicalknow-how—Youmayhaveproprietarytechnicalknowledgeinanareathatisimportanttocustomers.Forexample,IBMisaleadingexpertontheimplementationofSAPsoftware.
Softwareandsystems—Youmayhaveadatabasethatotherswouldpaytoaccess.Forexample,AmericanAirlinesbuiltSabre,theindustry'sleadingreservationsystem.
Informationprocessing—Asaby-productofyourlineofbusiness,youmayhaveinformationthathasvaluetootherbusinesses.Forexample,drugdevelopershaveinformationthatisofgreatvaluetothepharmaceuticaldistributors.
KnowWhatYourHiddenLiabilitiesActuallyAre
Manyfirmsfindithardtorecognizeandpursuenext-generationproductsbecauseoftheirownhiddenliabilities.Therefore,beforeattemptingtomoveforward,identifyandneutralizeyourhiddenliabilities.
Thetwelvemostcommonhiddenliabilitiesare:
■Acorporatemind-set—whichhasabiastowardsprotectingthestatusquoandstayingawayfromlinesofbusinessthatthecompanyhasnottraditionallypursued.
■Astrongcorporateculture—whichencouragestheorganizationtosticktowhatworkedinthepastratherthanevolveasthemarket-placechanges.
■Acompany'shistoryanditspositionwiththeequitiesmarket—whichmayconstrainitfromsacrificingcurrentearningsinordertofundnewgrowthinitiativesoralteritsprofitmodel.
■Corporateleaders—whopaylipservicetotheideaofgeneratinggrowthbutthenspendalltheirtimedoingotherthings.
■Organizationalbureaucracies—thatsaynonewinitiativescanbetrieduntileverydepartmenthascarriedoutextensiveduediligence.
■Inconsistentassetallocationorbudgetingsystems—whichmakeanynewgrowthinitiativerunagauntletforfundingthatisimpossibletogetthrough.
■Amismatchinskillsets—inthatthecurrentstaffwillbeskilledinrunningtheexistingbusiness,notinbuildingnewbusinesses.
■Anorganizationalstructurefine-tunedfortheneedsoftheexistingbusiness—whichwillusuallynotbeflexibleenoughtohandleneworhybridbusinessrequirements.
■Anincentivesystem—thatrewardsthecurrentwayratherthanthecreationoflong-termwealththroughnewinitiatives.
■Abrandthatcannotbeextendedintoanew-growtharea—andthatthereforeimprisonsthecompany'sreachtoalimitedmarketspace.
■Distributionchannelconflict—wherethetraditionaldealersordistributorshavevetopowerovernewgrowthinitiativesbecausetheywillbecutoutoftheloop.
■Externalallianceswiththirdparties—thatwereenteredintoyearsagoandthatnowbecomebarrierstodoinganythingthatmayalien-atetheseallies.
Simplystated,untilyoucandidlyidentifyandthenneutralize,minimizeorworkaroundeachhiddenliability,yournewgrowthinitiativeswillnotsucceed.Onehiddenliabilityonitsownwillbestrongenoughtoscuttlemostnewgrowthideas.Whentwoorthreehiddenliabilitiesworkinconcert,thepowerthatcanbeunleashedagainstthenewideascanbecomeinsurmountable.Withthisinmind,itisveryimportantnottoignoreanyhiddenliabilityasbeingoflittleornoconsequence.Eachshouldbeaccordedduerespect.
ActionstoNeutralizeHiddenLiabilities
■Personnel—First,youshouldfreeandthenharnessthecreativepowerofyourorganization'smiddlemanagers.Thesearethepeoplewhodealwithyourhiddenassetsandyourhiddenliabilitieseverydayoftheircareers.Givethempermissiontobecomethecatalystsforgrowthbyexpandingtheirareasofcontrol.Letthemmodelthebenefitsofgrowth-orientedthinkingfortherestoftheorganization.Middlemanagersareavastlyunderappreciatedresourcewhenitcomestogeneratinggrowth.
■Operatingsystems—Thesecondactionyoushouldtakeistomakesomeadjustmentstoyourorganization'sdecision-making,resource-deploymentandgoal-settingsystems.Specifically,youneedtodevelopoperatingsystemsthatwillsuccessfullyidentify,shapeandnurturenew-growthinitiatives.Thiswillinvolvefindingyourownanswerstoanumberofthornyquestions:
Howcanwecreateinnovativenewbusinessideaswithoutlosingfocusonthecorebusiness?
Howshouldwerespondtothemarket'sexpectationstogenerateshort-termearningswhilewefundgrowthinitiatives,whichwillnotbeprofitableimmediately?
Howcanthisorganizationshowthatitsupportsrisk-takingandinnovationwithoutignoringthecorebusiness?
Howcanwedistinguishbetweennewgrowthideasthatpromisegreatrewardsandthosethatcouldpotentiallyendangerthecompany'sfuture?
Obviously,theanswerstothesequestionswillbeexceptionallydifficulttodecide.Therewillbenumerousinternaltensionsthatwillcometothesurface.Goingthroughthisexerciseis,however,essentialifyouaspiretodevelopasystemforgeneratingongoingnewgrowthideas.
CreateYourDemandInnovationActionPlanandGetStarted
Thebestwaytojump-startworkonnewgrowthinitiativeswithinyourownorganizationwillbetodevelopyourdemandinnovationactionplan.Developingthatplanwilltakearoundthreemonths,sowhileyou'redoingthatyoushouldalsoundertakeaseriesofsevenshort-termmoves,whichwillstartthemomentumforchangebuilding.