growth and maturation stage of the business life cycle

• Exploit resources and capabilities generated during growth stage.

• Harvest, find, or develop other new business ideas

Delivery skills

Discovery skills

Discovery skills

Organization secondarily

rewards

F IGURE 1 -4

The business and executive skill life cycles

19

For the exclusive use of Y. Zhang, 2019.

This document is authorized for use only by Yijia Zhang in ENTR 2301 Ruth 2 taught by Ruth Raubitschek, Northeastern University from Jan 2019 to Jul 2019.

DISRUPTIVE INNOVATION STARTS WITH YOU

With the founder entrepreneur out of the picture, the ensuing

growth and maturation stage of the business life cycle begins. In

these stages, managers generally make it to the top of the man-

agement pyramid through great execution. This may involve gen-

erating incremental (sustaining) innovations for existing

customers, but the focus is on execution, not building new busi-

nesses. Surprisingly few companies in this stage pay systematic at-

tention to the selection or promotion of people with strong

discovery skills. As this happens, the lack of discovery skills at the

top becomes even more glaring, but it is still not necessarily obvi-

ous. (Contrast these common practices with those of Amazon

founder Bezos, who systematically asks any new hire, including

senior executives, to “tell me about something that you have in-

vented.” Bezos wants to hire people with an inventive attitude—in

other words, people like himself.)

Eventually, for most organizations, the initial innovations that

created the business in the first place complete their life cycle.

Growth stalls as the business hits the downward inflection point

in the well-known S curve. These mature and declining organiza-

tions are typically dominated by executives with excellent delivery

skills. Meanwhile, investors demand new growth businesses, but

senior executive teams can’t seem to find them because the man-

agement ranks are dominated by folks with strong delivery skills.

With discovery skills largely absent from the top management

team, it becomes increasingly difficult to find new business op-

portunities to fuel new company growth. The company once again

starts to see the imperative for discovery skills.

In sharp contrast, when entrepreneur founders stay through

the growth stage, the company significantly outperforms its peers

in growth and profitability.12 An entrepreneurial founder is far

more likely to surround herself with executives who are good at

discovery, or who at least understand discovery. Could Apple have

built new businesses in music (iTunes and iPod) and phones