5 steps the the Corporate Innovation death spiral :
1) Companies succeed in finding successful formula in emergent strategy. Other emergent efforts killed, all resources and efforts of the company focused here.
2) Companies face growth gap. How fast expected to grow back how much faster they can grow to exceed investor expectations. New disruptive businesses allow to exceed growth potential. Large promised growth rate by managers is needed to keep stock high.
3) The need for growth pushes new ventures into large, existing, obvious markets where they can clearly show large potential (even though it isn’t real). Competing in large markets means they have to compete with consumption and invest huge amounts of capital to win market share.
4) Good money becomes hungry for growth to close the growth gap, ignoring profitability. If you can’t show huge potential, you can’t get funding/support by corporation. When money becomes impatient for growth, it becomes bad money because it inevitably forces a cascade of incorrect decisions.
5) Mounting losses precipitate retrenching. This usually means corporation will revert to what it knows best: existing channels, existing customers, etc.
