CLIPPINGS

Abstract

An established company's primary performance measures may revolve around operational excellence: squeezing out ever‐greater volume, quality, and service at declining cost, say. New staircases [new product/ business line development efforts], by contrast, must create revenue where none yet exists. Profitability may be years away. Holding the leaders of a new staircase accountable for goals they cannot achieve is a sure way to kill the business, and misses the point: if a new staircase is growing well, it should be a net cash consumer. Its goal is not making a profit but meeting project milestones, and ultimately generating high revenue growth. By exempting such a staircase from standard performance measures and giving it a different target, managers can foster growth.

Citation

(1999), "CLIPPINGS", Journal of Business Strategy, Vol. 20 No. 3, pp. 5-7. https://doi.org/10.1108/eb039998