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Article – McKinsey Quarterly
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Business building helps companies diversify their revenues and keep pace with shifting customers and markets.
A strategic priority
The more new businesses you build, the better you get at building them. That’s the lesson from the companies that do it best.
The business builders
In this edition:
A quick briefing in five—
or a fifty-minute deeper dive
Serial approach
To build more successful businesses, companies need to learn by doing. Serial business builders improve their rate of success over time.
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Why business building is the new priority for growth
Stumblers
But incumbents often lack the skills they need.
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Teaching elephants
Consider how the CEO of Allianz Direct—a thriving digital business inside financial-services giant Allianz—has drawn on his business-building experience as the former COO of ING Netherlands and chief transformation officer of Sberbank.
Why business building is the new priority for growth
Article – McKinsey Quarterly
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Responding to the great acceleration requires companies to experiment with and invest in new digital technologies.
A digital-business builder: An interview with the CEO of Allianz Direct
Interview – McKinsey Quarterly
Four ways to succeed
Here are four lessons from successful business builders.
—Bart Schlatmann, CEO, Allianz Direct
I strongly believe you can change large companies. You can do it in legacy companies as well. There’s no excuse not to start.”
“
A digital-business builder: An interview with the CEO of
Allianz Direct
Interview – McKinsey Quarterly
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Successful business building requires frequent and visible support from leadership. McKinsey research shows that executive sponsorship and alignment is one of the two most-cited factors influencing the success of a business build.
Successful business builders understand their existing strengths and are able to apply them to the new enterprise. Over time, the learnings run the other direction, too.
Successful business builders fight optimism bias by stress-testing and validating assumptions, testing value propositions directly with customers, and using reference cases to debias business assumptions such as operating costs and market size.
Many of the world’s most successful companies are serial business builders. They’re able
to replicate success by building dedicated teams that can evaluate ideas, identify leaders, provide specialist expertise, and otherwise support new initiatives.
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The business-building imperative in the current crisis
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2017–19
30
Currently
52
~1.7
more businesses currently view new business building as a top-three strategic priority or higher
Organizations with new business building as a
top-three strategic priority or higher, % of respondents
Share created by incumbent companies,
% of large-scale businesses launched in past 10 years
66%
of viable large-scale businesses built in the past 10 years were created by 20 percent of incumbent companies
Why business building is the new priority for growth
Article – McKinsey Quarterly
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Average return on investment for frequent versus less frequent business builders, % of respondents
~2.2
24
27
31
17
9
25
28
38
Note: Figures may not sum to 100%, because of rounding.
≥4 businesses launched in past 10 years
<3 businesses launched in past 10 years
more common for organizations that launched 4 or more businesses to experience an average ROI of 5+ times the investment versus less frequent business builders
Less than the cost
1 to 2 times investment
3 to 5 times investment
> 5 times investment
Why business building is the new priority for growth
Article – McKinsey Quarterly
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Innovating from necessity: The business-building imperative in the current crisis
Article