From the Publisher
Imagine gathering the world's leading management thinkers around a table to advise one company (a hypothetical McDonald's), then testing their advice against systematic research. The Growth Gamble provides just that kind of imaginary intellectual feast. This provocative book argues persuasively for seasoning grand growth goals with a dash of reality. New business development is really hard for established companies, and they should stop chasing rainbows of the next revolution.
Campbell and Park challenge some well documented views about growth and new business development. Their challenges are not always successful, but they do encourage rigorous thinking about how companies should search and select new businesses.Robert A. Burgelman is the Edmund W. Littlefield Professor of Management at the Stanford University Graduate School of Business and author of Strategy is Destiny
Campbell and Park address a critical issue - new growth for the firm. Supported by manifold examples from practice, which have been distilled into guidelines for firms that aspire to grow new businesses, The Growth Gamble argues for a more cautious view than others, including myself, of how much venturing a company really can accommodate. As a result they provide a valuable antidote to exhortations for growth that drive firms to be overly ambitious.
Although I do not agree with all of Campbell and Park's views, this is an important topic addressed in a solid, fact based way, informed by history. Few books meet these tests.Richard Foster, author of Creative Destruction
A timely and valuable contribution to our understanding of the challenges of birthing new businesses ... a wealth of deep insights, practical advice, and meritorious admonition. I have no doubt that this thoroughly researched and carefully argued book can help your company gamble more wisely on growth.
This book is very insightful and also very practical - it provides the practitioner with some real hands-on advice as to what to do differently. We found its contents really helped shape our thinking.Stephen Ford, Head of Strategy Development, Boots Group PLC
The challenge of building the core as well as developing growth engines is one of today's most fundamental managerial challenges. The Growth Gamble by Campbell and Park has a clear, pragmatic, and research anchored point of view on this challenge. Better yet they provide the reader with a sense of the vitality of research in this domain. This book belongs on both academics' as well as managers' desks. Academics will come away with greater insights on the growth challenge. Managers will come away with both greater insights as well as specific actions to resolve the contradictions of managing for both today as well as tomorrow.
The Growth Gamble is a lucid examination of the most complex problem faced by most executives today - how to enter new businesses for the future without disrupting the profitable core of today. Managers will learn from the original examples and from Campbell and Park's provocative analysis of the need for growth.
Soundview Executive Book Summaries
Conventional business wisdom dictates that companies should focus their sites on growth. But growth is no certain thing, say the authors of The Growth Gamble. Not all companies are built for rapid growth: Their markets are unsteady or extremely competitive, their infrastructure is not sufficiently flexible, or they don't have the quality or quantity of people to lend to the effort. For these companies, a slow or steady growth curve, over years or even decades, is the healthiest option.
While this flies in the face of convention, the business landscape is littered with organizations that went belly up because they tried too hard to expand their businesses too far from what they did best, or did so too rapidly to keep themselves solvent. Much of the damage was caused by a lack of rigorous analysis, or the want of a screening tool to help leadership determine what new avenues were right for their companies, and when. With The Growth Gamble and its invaluable New Businesses Traffic Lights Toolkit, businesses have what they need to grow smartly and avoid potentially fatal errors.
Beating the Odds
Most companies fail to find new growth businesses when their core businesses mature. Intel and McDonald's illustrate this important new reality: They have not found a significant new business that will enhance their growth prospects. In fact, as many as 99 percent of companies fail to create successful new growth platforms. Less than 10 percent of companies manage to restart growth once it has slowed. Only 3 percent sustain a restart for more than three years. Less than 1 percent do so by creating new growth platforms.
These sobering statistics do not, however, keep companies from trying. There are only a tiny percentage of management teams that settle for sticking to core businesses, and declining gracefully as those businesses mature. The challenge of finding new businesses is a growth gamble. To even take on the challenge is to bet against its odds. There are no easy answers.
Theory Versus Reality: An Opportunity Shortage
Current business theory instructs companies to be more entrepreneurial and to copy approaches used by the venture capital industry in building processes for developing new businesses. According to these theories, the high failure rate of new businesses is due to poor processes and skills.
The reality is quite different. Established companies have entrenched mind-sets and managerial habits, which are normally well tuned to the needs of their existing businesses. When companies delve into new businesses that are compatible with those mind-sets, they achieve success. When they try to do things that do not fit, they fail. The problem is, there are very few opportunities that fit.
A New Approach
There needs to be a new approach to the problem. The shortage of opportunities suggests that a screening tool that helps managers identify opportunities with a reasonable fit is likely to be more useful than a series of process steps for developing new businesses. Trying to make dramatic changes to ensconced managerial mind-sets — such as following venture capital processes — is also unlikely to achieve much. The mind-sets and rules of thumb that have served successful companies in good stead are likely to continue to influence success, and deviating from them will likely end in defeat. Copyright © 2005 Soundview Executive Book Summaries