Tuck research on strategic business experiments featured in Harvard Business Review
FOR IMMEDIATE RELEASE - July 1, 2005
CONTACT: Kim Keating - 603-646-2733
HANOVER, N.H. - In order to thrive, new ventures launched by established organizations must surmount three distinct challenges: they must be able to forget, borrow, and learn. This idea, supported by new research from Vijay Govindarajan, Earl C. Daum 1924 Professor of International Business and director of the Center for Global Leadership at the Tuck School of Business at Dartmouth, and Chris Trimble, executive director of the Center for Global Leadership at Tuck, is featured in the lead article of the May Harvard Business Review and in the forthcoming book Ten Rules for Strategic Innovators: From Idea to Execution (Harvard Business School Press, 2005).
As organizations embark on strategic business experiments, understanding the concepts of forgetting, borrowing, and learning (and how they are related) is critical, as these issues will be present from the launch to profitability. Because of the elemental differences existing between the new businesses and the established one, the new venture must forget some of what made the larger, established company successful. At the same time it must borrow some of the core assets of the larger company—since they may prove to be a great advantage over other, independent, start-ups. All the while, the new venture faces many unknowns, and must promote the learning process.
"It is always encouraging to see an established market leader boldly pursue new and innovative ideas," says Govindarajan. "Strategic experiments, after all, are crucial to long-term growth. However, businesses must realize early on that to get an idea out of the incubator and up and running as a sustainable new business, long-established practices of the established company will have to shift."
To get to the heart of what it takes to get a new business initiative beyond the idea stage, Govindarajan and Trimble spent five years chronicling initiatives at organizations including the New York Times Company, Analog Devices, Corning, Hasbro, and Johnson & Johnson. In summarizing their findings for Harvard Business Review, the authors write that in order to convert breakthrough ideas into breakthrough growth, companies must master the forgetting, borrowing, and learning challenges, and this demands that they redesign virtually every aspect of their organizations, from hiring, performance evaluation, and budgeting to compensation, definitions of success, and reporting relationships.
In the article, titled "Building Breakthrough Businesses Within Established Organizations," Govindarajan and Trimble highlight Corning's launch of Corning Microarray Technologies (CMT) as an example of an established business that initially duplicated its organizational design and experienced intense pressure and difficulties. Subsequent organizational changes relieved these pressures. The authors conclude that the early struggles of CMT stemmed from failures to forget. The authors then share a list of best practices for forgetting. Best practices for borrowing and learning are also described and illustrated with case studies of the New York Times Company and its venture into the interactive world with the launch of New York Times Digital, and Hasbro's creation of Hasbro Interactive.
Trimble comments, "It is imperative that companies try to learn from others' experiences. Today's executives celebrate an innovation myth focused on gifted visionaries. But the capabilities of the organizations that surround these visionaries will make or break the visions."
For the full text version of the Harvard Business Review article, please visit the publication's website at: www.hbr.org.
For more information on Professors Govindarajan and Trimble, please visit Tuck's Center for Global Leadership at: www.tuck.dartmouth.edu/cgl.
Founded in 1900, Tuck is the first graduate school of management and consistently ranks among the top business schools worldwide. Information about the Tuck School is available at www.tuck.dartmouth.edu.
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