Managers are committed to diversifying the business as a fundamental means of growth. It is one of the conclusions of a study carried out by the consultora McKinsey among 1,100 CEOs of companies around the world. It follows from your responses that 50% of global revenue in 2026 will come from products, services, and business models that don’t even exist today.. Eight out of ten European executives prioritize the creation of new businesses as a way to deal with disruption within their industries, perhaps because they are convinced that change is difficult to deal with from established organizations.
The report ‘The state of new business building‘ from McKinsey determines that 21% of executives consider that creating new businesses is their main priority – double that of last year-, while for 55% it is one of the three growth imperatives. If a few years ago the culture of constant change was promoted as a virtue in the company, From the responses of managers, it is seen that they think it is more efficient to create new companies to grow than to transform the one they lead.
Digitization, adoption of new technologies and sustainability are the three factors with the greatest impact on growth derived from the construction of new projects. The motivations behind this new wave of intrapreneurship in Europe are the increase in organic growth, the possibility of mitigating the effects of disruptions and the adaptation to the changing needs of customers and the market provided by the construction of new businesses and products. In fact, eight out of ten executives (79%) state that they are prioritizing the construction of new businesses as a means of protection against the disruption of their industry and to generate new income streams to satisfy shareholders and customers.
“Seven out of ten companies that opted for the construction of new businesses as their main strategy grew at rates higher than the average of other companies in their sectors”, says Santiago Fernández, partner of McKinsey & Company in Spain. The report also identifies the areas of opportunity to develop strategies for the construction of new business projects and points out sustainability as one of the differentiating factors for growth, despite the fact that in general there is a tendency to doubt the immediate profitability of these projects.
According to the results of the survey, currently only 15% of companies are monitoring the objectives related to the carbon footprint or other environmental impacts of their new projects, but up to 93% of the managers surveyed state that they are seeking to address the issues related to sustainability in their new business models. Furthermore, almost half (46%) of European business leaders acknowledge that sustainability is one of the top three trends to address through intrapreneurship.
McKinsey’s analysis also highlights the organizational aspects that influence the success of new business creation. The support of the management and, specifically, the role of the CEO, the creation of an effective and agile organizational structure, the commitment to an active acquisitions strategy, knowledge of the market and the client, as well as an inclusive leadership are the ingredients that help in the successful implementation of new projects.
The report notes that, however, four out of five new companies fail to exceed a turnover greater than 50 million dollars in their first four years. Having the experience and support of the parent company is another key factor to guarantee the profitability of the new entities or services in the long term. The report reveals that organizations with three or more experiences of creating corporate ventures are able to generate revenue 1.4 times higher than their less experienced peers in creating new businesses.
Only 14% of new business projects are led by women, identifying an opportunity for inclusion and diversity. According to the report, Women-led companies outnumber their peers by 10%, and greater diversity on boards of directors provides greater opportunities for growth.
Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.