Solving the challenges big companies have innovating

Leaders of strategic experiments face three fundamental challenges:

The first is the forgetting challenge. To succeed, the new business (NewCo) must forget some of the core business' (CoreCo's) deeply ingrained success formula.

Second is the borrowing challenge. The strongest advantage that NewCo has is access to CoreCo's vast resources. To forget, NewCo needs some separation from CoreCo. But to borrow, NewCo must also be linked to CoreCo.

Third is the learning challenge. NewCo must recognize that its initial plans and forecasts are most likely wrong. NewCo is a business experiment. It must expediently learn and adapt.

Unfortunately, planning practices that prove extremely effective in a mature business setting are detrimental to learning.

This is explored in more detail in a new book by Vijay Govindarajan and Chris Trimble, Harvard Business School Press, due in the Autumn 2005, called Forget, Borrow, Learn: Building Breakthrough Businesses Within Established Organizations.