McKinsey partners: you need to protect successful new ventures from the core business

The search for growth often comes down to three choices: buy, build, or partner.

Acquisitions traditionally offered CEOs a faster path to scale, while partnerships offered the ability to unlock opportunities that were difficult to pursue alone.

Now, AI is shifting the build playing field: lowering experimentation costs, quickening build cycles, and letting AI-native businesses be designed from the outset.

That shift has expanded the range of new ventures that can be built.

And, accelerated how quickly they can scale.

Successful ventures now reach $10 million in revenue within 31 months on average, compared to a previous average of 38 months and they break even with 40% less capital than before.

But there is a catch.

The more successful a venture becomes the harder it is to protect.

The systems that power the core business — governance, teams, processes and controls — can get in the way of the new venture scaling.

Which is why CEOs need to be ready to step in.

Choose where to play and how far to go Before the CEO can protect the scaling asset, they first need to identify that scalable idea.

Often the strongest ideas sit at the intersection of a growing market, a valuable customer problem, and an area where the company can build a distinct, sustainable advantage.

But, choosing where to play also means deciding how far to go.

How close should the venture sit to the core? Should it pursue the home market or somewhere new? What happens if it starts competing for the same customers – or revenue – as the business paying today’s bills? Or can the new venture fuel growth on top of existing revenue? Honeywell shows what can happen when a company builds around its distinctive advantages.