Large companies can implement several strategies to build an alternative growth engine while their core business is still growing. Firstly, they can allocate a portion of their capital and executive resources to new ventures, even when the core business is thriving. This allows for the development of new growth engines in parallel with the core business. Secondly, they can adopt a patient approach, understanding that it takes years for a new venture to become a growth engine. Lastly, they should avoid the temptation to rapidly invest in new ventures with the expectation of them becoming huge very fast, as this often leads to disaster.

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How Will You Measure Your Life

Management theories not only can be applied to our careers, but also personal lives. Think of them as a resource allocation problem. You have limited...

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The best time to build an alternative growth engine is when the core business is growing. Unfortunately, large companies allocate almost all capital and executive resources to the growing business. When the core business begins to slow, there is no new growth engine ready. It rapidly invests in new ventures and expects them to become huge very fast. Inevitably, as the theory predicts, this ends in a disaster. If a company has ignored investing in new businesses until the time it needs new sources of revenue and profits, it's already too late. It takes years of patient nurturing for a new venture to become a growth engine.

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The potential consequences of a company not investing in new ventures until it's too late can be severe. The company may face a significant decline in revenue and profits as its core business slows down. Without a new growth engine ready, the company may resort to rapid investment in new ventures, expecting them to become huge very fast. However, this approach often ends in disaster as it takes years of patient nurturing for a new venture to become a growth engine. The company may also face a loss of market share, competitive disadvantage, and even risk of bankruptcy.

A company can effectively build an alternative growth engine while the core business is still growing by investing in new ventures and patiently nurturing them over time. This should be done when the core business is still in its growth phase. Large companies often make the mistake of allocating all resources to the growing business and only start investing in new ventures when the core business begins to slow. This approach often ends in disaster as it takes years for a new venture to become a growth engine. Therefore, it's crucial to start investing in new businesses while the core business is still growing.

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