Carlos, the CEO of a renowned beverage company, faced a pivotal strategic decision. In previous years, Carlos had sought to keep the company competitive by diversifying its product range and distribution channels. However, this move diluted focus, causing the flagship product to suffer.

Carlos considered further diversification, such as entering new beverage categories or creating unique customer experiences through novel distribution channels. Simultaneously, he contemplated refocusing on the company’s core product, doubling down on what had made the company successful in the first place.

Indicators

Carlos struggled to determine if his organization had the capacity to absorb additional work and pivot towards new avenues. He also realized his leadership team, entrenched in current methods, might not adequately support this diversification. Essentially, Carlos was contemplating creating a startup within the established company.

Intervention

Recognizing Carlos's challenge, we stepped in as thought partners. We helped Carlos articulate his vision for this internal startup. We assisted in building a business plan, including 'versus' strategy statements to clarify the company's direction.

We guided Carlos through leadership selection for the startup and helped build a budget for the investment. This included determining the startup's resource needs, projecting ROI, and presenting the plan to the board for approval.

Implementation

We helped Carlos implement a plan balancing the startup's freedom to innovate with leveraging the core business's resources and strengths. The startup had the autonomy to develop its own products, marketing strategies, and distribution channels while utilizing the parent company's established supply chain, operational efficiencies, and brand equity.

For example, we facilitated the establishment of a separate team within the company dedicated to the startup's initiatives. This team operated with a startup mindset, focusing on rapid prototyping and iterative development, while still having access to the parent company's extensive distribution network and marketing resources. We also helped set up a feedback loop to ensure continuous improvement and alignment with the company's overall goals.

The Result

Over 18-24 months, the internal startup flourished, establishing its own customer base and demonstrating sustained growth. The parent company maintained its market competitiveness. Initially met with skepticism, the concept of an internal startup gradually gained acceptance throughout the organization, largely due to Carlos's vision and our collaborative efforts in formulating explicit strategic bets. This clarified the new direction for everyone involved, fostering alignment across the organization.

Carlos's journey demonstrates that innovation and competitiveness do not always require expanding scope but rather focusing on what is crucial. He recognized that businesses must innovate and foresee customer needs to thrive. His decision to venture beyond the company’s core offering was a bold stride into the future, not a retreat. Carlos understood that resting on laurels wasn't a sustainable strategy.

His journey highlights the importance of strategic foresight in experimentation, anticipating customer needs, and recognizing that relying solely on consistent growth in a single business line may not guarantee enduring success. By trusting his instincts and taking decisive action, Carlos ensured his business's future viability, demonstrating that progress sometimes requires a transformative reconsideration of the business's foundational elements.