Leading disruption in a legacy business

Spring 2022 magazine borders

A compelling growth ambition is a critical enabler for new ventures.

Andy Binns, Michael L. Tushman and Charles O’Reilly III

Reading time: 9 min

Themes

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An MY SMR initiative that explores how technology is reshaping the practice of management.

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Gary Waters/theispot.com

Few doubt that something extraordinary has happened at Nvidia, as its share price has risen more than 8,000% over the past decade. It is now among the world’s 10 most valuable companies, thanks to its transformation from the world’s leading supplier of graphics processors to a leader in computing for artificial intelligence and autonomous driving.1 CEO Jensen Huang has confounded the conventional wisdom that established the companies. they cannot reinvent themselves and their industries through radical innovation.

Nvidia is not an outlier, but we see it as one of the most compelling examples of the developing trend of large corporations leading radical innovation. Among them is LexisNexis, which became an early leader in big data analytics by building a multibillion-dollar business that is larger than the original legal information company. Another, Deloitte Consulting, is challenging the century-old management consulting model with Deloitte Pixel, a new open talent model. Best Buy has broken out of its pure retail box to create a technology and healthcare services company for seniors. And MasterCard has shifted from focusing on processing credit card transactions to creating new digital payment solutions.

A new cadre of leaders is driving disruptive companies from large corporations. These corporate explorers are ambitious and purpose-driven managers ready to shake up disruptive new ventures from established and successful organizations. They ideate, incubate and scale innovations, just like an entrepreneur does. However, innovating within an existing corporation differs in important ways from conventional entrepreneurship. These leaders need an enabling context that empowers and encourages them. This is the role of what we call a strategic ambition.

Defining an ambition

CEOs like Nvidia’s Huang, Analog Devices’ Vincent Roche, MasterCard’s Ajay Banga, and Best Buy’s Hubert Joly have provided their organizations with a strategic ambition that excites aspiration and hope, not fear.

Essentially, leaders articulate an emotionally compelling higher purpose for their companies, such as Joly’s aspiration that Best Buy must “enrich people’s lives through technology and contribute to the common good.” Many companies have mission and vision statements that articulate a commitment to a higher purpose. They can tell us where the company stands on important social issues like climate change and the Black Lives Matter movement.

Themes

borders

An MY SMR initiative that explores how technology is reshaping the practice of management.

More in this series

References

1. As of December 22, 2021, Nvidia had a 10-year stock appreciation of 8,736.68%, according to data from https://seekingalpha.com.

2. N. Furr, A. Shipilov and A. Duvauchelle, “How Does Digital Transformation Happen? The Case of MasterCard (A),” INSEAD Case Study No. 6348 (Fontainebleau, France: INSEAD, 26 February 2018); and N. Furr, A. Shipilov, and A. Duvauchelle, “How Does Digital Transformation Happen? The Case of MasterCard (B),” INSEAD Case Study No. 6348 (Fontainebleau, France: INSEAD, 1 December 2020).

3. S. Pangambam, “MasterCard CEO Ajay Banga on Taking Risks in Your Life and Career (Full Transcript),” The Singju Post, December 7, 2015, https://singjupost.com.

4. Jensen Huang, interview with authors, February 27, 2016.

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