Book Review: Fit for Growth by Cuoto, Plansky & Caglar
My Rating: 🚀🚀🚀, whilst the book is not about corporate venturing, it is an excellent primer for thinking about how to free up resources and organise your cost structure for growth.
Overall: A great view of how to manage your cost structure to promote differentiating capabilities [corporate ventures] and reduce organisational drag that might be consuming resources with no path to growth.
Cautions: This book is not fun fun fun, the topic is a hard process that can look easy on spreadsheets but have serious real-world consequences for people in your organisation.
Recommended readers: Anyone who deals with budgets or wants to fund corporate ventures.
The writers and publishers of this book are PWC’s Strategy& practice and so the tone does sometimes slip into the view of a consultant looking at an organisation rather than a manager facing this problem. BUT this book is really accessible and the writers highlight a mirror process to corporate venturing that should almost take place before and during your corporate venture activities- A disciplined team that is trimming the cost structure and ensuring that new growth is aligned, “Focus on what to keep not what to kill”.
A common problem with corporate venturing can be that you’re adding a new unit, product, service into an already busy mix. If there is not a trade-off where something is being wound down, you are adding more cost to the organisation. The diagram above is the Fit For Growth approach to performing a Portfolio Rationalisation- what do we really need? if products fail that test then they can be: wound down, sold, recycled but the key is to free up the resources [time, money and attention] so that the NEW NEW can succeed. Following that the model seeks to align the whole organisation’s cost structure to support that growth- ALIGNMENT IS KEY.
Visualised, the Fit For Growth approach should then have the following effect on your cost structure. Reducing your “lights-on” back-office and share services overheads [fewer products, less to support + a more efficient operating structure]. Trimming your “Table Stakes” cost activities needed to maintain day to day commercial operations. And funnelling those savings into increasing your corporate venture activity.
The book does a great job to explain how to do this, step by step, and then communicate it to the organisation. It was light but did cover what the new expected cost and revenue profiles should look like but the key message isn’t worrying about a decrease in revenue. It’s about making sure the cost structure reflects your organisational strategy, growth ambitions and what you really want to be selling.
Overall, a great book if you have corporate venture funding issues or problems understanding how to reach a point where corporate venture funding can become sustainable.
As always, feel free to message me if you’d like to discuss more!
