Organizational DNA for strategic innovation

Organizations struggle when trying to manage a mature business and a related new venture simultaneously. The endeavor is fraught with contradiction and paradox. In order to succeed, the organization's leaders must deal with two conflicting pressures. The new venture needs to forget much of what has made the mature business successful, and this argues for isolating the new venture from the mature business. However, the new venture also needs to borrow resources from the mature business, and this argues for integrating the two units. Based on in-depth field research at ten organizations, this article shows how to identify what to forget and what to borrow, and it describes an organizational design that facilitates both.