A plan for preparedness also considers the underlying organizational design and top-level support. Do you have a governance system wherein the people who sign off on a venture’s activity genuinely understand the issues and opportunities at stake? Your financial systems, meanwhile, should move away from the year-over-year growth assumptions of the past toward more dynamic metrics and rewards.

Put in place training, if necessary, so managers and employees can operate effectively on agile teams or use generative AI and other digital innovations to streamline their processes. As you reassess these, also consider the underlying structure that makes these assets viable. Set up investment runways and related expectations to reflect the benefits of business building as well as the challenges. As the company gains experience, shorten the timeframes.

2. Attract and Deploy Entrepreneurial Talent

In general, there’s a mismatch between the talent that exists in established companies and the talent needed for new ventures. Entrepreneurially minded people are the heart of a business-building effort. The organizational environment around them also needs to be set up to support and even nurture their inner innovator.

Our survey suggests that leaders might be overestimating the entrepreneurial talent they have on hand. Of the nine strategic assets most crucial for business building, talent is the area where leaders expressed the most confidence: about 65% of respondents said they already have the internal talent they need, and that they merely needed to reassign them to entrepreneurial tasks, while 77% said they rely on their internal staff for business building. Meanwhile, only 54% of survey respondents said they actively recruit entrepreneurially skilled people; instead, they said, they found entrepreneurial talent through acquisitions (53%) and partnerships with other companies (32%).

In our experience, these sources are not enough to provide the necessary talent for business building. In a large company, it’s often very difficult to retain entrepreneurial talent or pivot the existing workforce toward more entrepreneurial endeavors. That’s not just because of the people themselves or their ways of thinking—it’s because such companies typically use the same operating model for their core businesses and innovation arms. The organizational structures and incentives that support an entrepreneurial mindset are missing.

If your company is in this position, you may need a new talent-support model for business building, with four key components:

• It should offer people many opportunities to explore and fail, with longer timeframes that allow teams to test new ventures—and to learn from failures as well as successes.
• It should provide alternative compensation and incentive structures aligned to entrepreneurial KPIs.
• It should establish distinct entrepreneurial teams with a more agile way of operating.
• And its performance evaluation metrics should be oriented to entrepreneurial success, including taking risks and learning from their experiences.

Only 9% of the leaders surveyed recognized all four of these critical factors as important, with performance metrics the one factor most likely to be dismissed.

3. Acquire What You Need

Our survey results show the increasing popularity of acquisitions: 61% of the surveyed leaders said M&A is more important to their business-building strategy than it had ever been before. Indeed, acquiring startup ventures can be one of the most powerful ways to accelerate a growth strategy.

When you acquire a startup, one of the most valuable parts of the acquisition is the cultural synergy it offers. The market presence or product lineup are obvious incoming assets. Even more important, but easy to overlook, are the entrepreneurial thinking and operating models the acquired company adds. To integrate your acquisitions, work closely with incoming leadership—at levels ranging from top leadership strategy meetings to on-the-job functional training—so they learn “how we do things around here.”

The people coming on board have built and scaled up the business you just purchased. Incorporate their thinking with your own and streamline your processes to match theirs rather than making them fit into yours. This will make it easier for you to continue accelerating your growth curve and to capture more opportunities.

Don’t embrace acquisition for acquisition’s sake. It’s just one vehicle for business building, and it’s not always the best path. Acquiring a new company is typically more expensive than building a team internally, for one thing, and the acquisition can fall flat if the two companies don’t integrate. What’s more, the incoming company may not be precisely aligned to your goals or to the best growth path.

The best starting point for assessing any deal is to look at your own assets and value proposition, begin building your business internally, and then use the new company as a complement and accelerator for your existing effort. A company with strong business-building capabilities will tend to balance acquired enterprises with those it generates itself.

An Inside and Outside Game

Business building is always a viable path to accelerated growth, but this moment in history may be particularly good for it. To be sure, 2023 has been fiscally difficult for many companies. Traditionally, however, some of the most powerful businesses were launched under tough circumstances.

There are also reasons to be bullish. More technological innovation is taking place today than at any time in recent history, especially in AI-related technologies and the life sciences. There is also a great deal of consumer openness to new products and services, and an enormous middle class is developing in some emerging economies. Meanwhile, new tools and methods exist for product development, mergers and acquisitions, and going to market.

These can all help you launch new businesses and move rapidly beyond your current growth trajectory. By making sure you have the right people, partners, and assets in place, you can maximize the value of your business-building investments—and realize your company’s entrepreneurial potential.

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