While as a business you need to remain focused on what you can do best and what you can sell now, there are two reasons while it is also important to engage – selectively – in side projects:
- as a start-up, your initial market, product or business model might not be a hit. Investigating side opportunities is the best way to discover what might work better
- as a grown-up company, current business might be stagnating and you need to find new pockets of growth. You need to reinvent the business.
Enduring companies are those that can reinvent themselves. A couple of examples:
- Did you know that the history of Nokia started in 1865, and that Nokia used to be a manufacturer of paper, rubber products and TVs before it become the telecom giant? In 2011, Nokia is one more time on the road to redefine what its core business is.
- IBM, the IT giant, was founded in 1911 from the merger of three companies founded in the 1880s. In the early 1990s, IBM was really struggling. Louis Gerstner, CEO of IBM from 1993 to 2002, refocused the company on software, services and solutions. This included the acquisition of PwC in 2002. Today, the hardware business of IBM represents less that 10% of its turnover.
- HP was founded in 1935 by Bill Hewlett and Dave Packard. HP was initially know as a test instrument company; it then become known as a calculator company; then only it became a PC company. In 2011, one more time, HP is trying to reinvent itself.
Think about Apple and how they have been able to reinvent their business in the 2000s, evolving their product line from desktop, laptop and a bit of software to add the iPod, the content management system iTune, the iTune store to sell music, the iPhone, the App store, the iPad, and now the iCloud. Today, the ‘original’ product line of Apple – desktops and laptops – amounts to 20% of the company turnover only.