Better to innovate, create, or aggregate?

A cuckoo bird could be seen as an odd inspiration for business success.

I mean, they’re also shameless parasites - who wants to be a part of that?

You see, many species of cuckoos have been known to leave their eggs in other birds’ nests. Their whole means of success depends on letting their young be raised by entirely different species.

Ornithologists used to think that cuckoos would simply wait for the opportune moment to lay their eggs in other birds' nests, but it turns out that cuckoos have more moxie than that.

In a study in the journal Ethology, researchers from the University of Granada found that the Great Spotted Cuckoo laid its eggs in the nests of magpies while the magpie was sitting on the nest. These researchers thought that magpies had just gotten sick of raising these ungrateful cuckoo birds and started sitting on their nests almost constantly while they were incubating their own eggs.

In Darwin-esque brinkmanship, the cuckoo basically called the magpie’s bluff and went for the crazy (cuckoo, if you will) option, laying eggs in another bird’s nest while the bird was still sitting there.

Even when magpies fought back with aggressive pecking, in every single instance, the cuckoo accomplished her mission and laid her eggs.

That is some moxie.

Which brings me to business models, LVMH, and Bernard Arnault.

Just this week LVMH announced that it had purchased the American icon Tiffany for $16.6 billion adding to his sprawling luxury goods empire.

The Financial Times reports the acquisition is the latest in four decades of voracious dealmaking by Arnault and marks the luxury sector’s largest deal ever. Tiffany, known for its robin’s egg blue boxes, will join a stable of LVMH brands that has diversified far beyond its roots in Christian Dior couture, Louis Vuitton luggage, and Hennessy Cognac to include Rimowa suitcases, make-up by pop star Rihanna, and even train journeys across Europe on the Venice Simplon-Orient-Express.

“Arnault is like a cuckoo: he moves in and takes over others’ nests rather than building his own,” says Dana Thomas, author of Deluxe: How Luxury Lost Its Lustre.

Arnault has never stitched a bag, designed a ring, or launched a product - he and his team have simply made them better.

Going from zero to one sounds sexy and will get you on the cover of magazines, but a better move might be to innovate and make something better.

Anyone who has launched a new product and tried to sell it knows how challenging this process is - even for the best funded, best organized blue-chip companies.

Thomas Steenburgh, a marketing professor at the University of Virginia Darden School of Business, was inspired by his early career at Xerox to discover why firms with stellar sales and R&D departments still struggle to sell new innovations. The answer, he finds, is that too many companies expect shiny new products to sell themselves.

Steenburgh penned this in the November–December 2018 issue of Harvard Business Review: "Successfully executing an organic growth strategy requires a deep and lasting commitment from the entire senior leadership team, because bringing new-to-the-world products to market transforms selling organizations as much as it transforms buying organizations. The best companies are strategically aligned, from the sales force to the C-suite, when new products are launched. They recognize that selling these products involves different barriers, and they develop new processes to overcome them."

In today's global business environment, it is clear the best companies must field the right resources—the know-how, technology, processes, and people—in the right way if they are to have any chance of generating consistent, healthy levels of growth.

Build, Borrow, or Buy: Solving the Growth Dilemma, by professors Laurence Capron, of INSEAD, and Will Mitchell, of Duke University’s Fuqua School of Business, is one of my favorite business books exploring tactics for positive revenue generation.

The book is an examination of the three fundamental modes—or “pathways”—for obtaining the resources needed to grow. They are developing the needed resources internally, or “building” them; contracting or partnering to obtain resources, or “borrowing” them, and acquiring, or “buying” them.

According to the authors, companies should be adept at all three.

From my own business experience as an entrepreneur and consumer, the best organizations can innovate, create, and aggregate as needed - recognizing that these three tools working in concert are powerful.

-Marc

Marc A. Ross is a business strategist and communications advisor working at the intersection of globalization, disruption, and politics. Ross is the founder of Caracal.