Major disruption in legacy business

Magazine Spring 2022 issue boundaries

A compelling growth ambition is an important enabler for new ventures.

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

Reading time: 9 minutes

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A My SMR An initiative to explore how technology is reshaping the practice of management.

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Gary Waters/theispot.com

As its share price has risen more than 8,000% over the past decade, few doubt that something extraordinary has happened at Nvidia. Thanks to its transformation from the world’s leading provider of graphic processors to a leader in computing for artificial intelligence and autonomous driving.1 CEO Jensen Huang has challenged the conventional wisdom of founding companies. cannot reinvent themselves and their industries through radical innovation.

Nvidia is not an outlier – rather, we see it as one of the more 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 creating a multi-billion dollar business larger than the original legal information firm. Next, 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-play retail box to create a health technology and services company for seniors. And MasterCard shifted from a focus on processing credit card transactions to creating new digital payment solutions.

A new cadre of leaders is driving disruptive enterprises from within large corporations. These corporate explorers are ambitious, purpose-driven managers who are willing to agitate for disruptive new businesses from within stable, successful organizations. They think, incubate and scale innovations like an entrepreneur. However, innovation within an existing corporation differs from traditional entrepreneurship in important ways. These leaders need an enabling context that empowers and encourages them. This is what we call a role Strategic Ambition.

Defining Ambition

CEOs like Nvidia’s Huang, Analog Devices’ Vincent Roche, MasterCard’s Ajay Banga, and Best Buy’s Hubert Joly have given their organizations strategic ambitions that inspire aspiration and hope, not fear.

Most fundamentally, leaders articulate an emotionally engaging higher purpose for their companies — such as Jolie’s aspiration that Best Buy should “enrich people’s lives through technology and contribute to the common good.” Many companies have mission and vision statements that express 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.

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boundaries

A My SMR An initiative to explore how technology is reshaping the practice of management.

More in this series

References

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

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