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Organic growth of the business has been a major objective since before the pandemic. The world was already going through a series of overwhelming changes, digitization being the most influential of all. Many companies had to overhaul their business structure and evolve their strategies to meet the new challenges of the new world. Covid 19 has only accelerated the process. Much had to be adapted, too many rules had to be rewritten and too many challenges had to be overcome.
Why is business building a new priority?
The business building has emerged as an essential tool for the organic growth of the business, especially for long-term growth. There are many valuable opportunities for growth. Experience suggests that intrapreneurial efforts have equal potential for innovation like entrepreneurial ones. Even high potential start-ups have lower success rates than companies that decided upon the business building.
Building new business implies new services, new products, and new business models. This is an effective way for the incumbents to catapult their organization with incredible speed and to counter disruptive challenges.
What can be done to create business-building capacities?
Business building is a challenging effort. It requires a set of skilled minds, ready to take the risk and capable of efficiently maneuvering the new business through challenges. It is even more challenging if the new business model is substantially different from the parent organization. But having the new business different from the parent company is likely to generate higher profits.
Large companies have succeeded in reinforcing business building capacities through the following emphatic activities :
1. The CEO of the organization must take up the task of voicing the necessity of business building. Many executives harbor doubts about investments beyond the traditional business operating model. It should be the work of the CEO to articulate the need to create new business for positive value returns.
2. Business building is not a stand-alone venture. The incumbents push boundaries to build new ventures, often unrelated to the parent company. Now while this may seem challenging at the first glance, the best part of having a parent organization is that you can use the assets and resources of the organization for your new endeavor. Besides, you can draw from the data intelligence, intellectual property and rely on a ready-made customer base.
3. Assuming risk as an inevitable factor of new business can actually help overcome the risk in the end. Heavy reliance on a promising idea may not turn out to be effective. You can never know what will work and what won’t unless you dive in. Hence the best approach is to consider the risk paraphernalia, weigh them out, build a team who would identify the risk, and plan on managing the same efficiently.
4. The pillars of building a business are many. To make the pillar stand you need a strong team dedicated to proposing, evaluating, monitoring, and managing the whole process of business building. Many companies have hired entrepreneurs from outside the parent organization as that would enrich the venture with fresh perspectives. The business building team is endowed with enough autonomy while they must respect the assumptions, values, and strategies of the parent company.
Some problems associated with business building :
1. Markets are subjected to high risks. Uncertainty and drastic fluctuations preside over any new venture. Your success and performance depend on how well you can adapt to the shifting environment. Successful builders would focus on these anticipated changes, have a backup plan, or be flexible enough for corrective measures halfway through.
2. Real-time scaling of business for future profits and value returns are important parts of any business plan. A slack in this domain affects the ability to stand up to the needs. A solid business building planning should have a clear understanding of all factors that change over time, like customer tastes and preferences. Close monitoring of shifting market response and consumer behavior may thwart any sudden catastrophe.
3. An assumption that a new business will operate in the same line as that of the parent organization. The employees often try to uphold (or expect) the same standard and ways of working. This can prove rather antithetical to the desired approach. The new business may draw advantages from the parent organization, but it has its own fresh model, catering to different demands in the market.
4. Missing out on a structured view before the launching affects the long-term survival of any venture. The incumbents must have a complete understanding of the market, a solid plan, and an efficient team who is armed with probable solutions to any hindrance in the way. The plan should be secured before the business is launched.