Companies constantly seek new growth opportunities, but organic new growth is far from a sure bet. While business bloombergbizweek_341x199model innovation is a powerful path to sustained, robust growth, new businesses can take years to mature. The skills needed to conceive and incubate them present a unique set of challenges that many companies find difficult to overcome. “A large enterprise has trouble making an investment in innovation,” says Brad Anderson, the recently retired CEO of electronics retailer Best Buy. “It’s in part because Wall Street has trouble imagining a new way to operate but, more important, because people inside the company can’t see the value of a new idea and so won’t allocate the resources and support the new initiative needs to succeed.”

But organic growth is not the only option available to companies seeking transformational growth. Though most of my book Seizing the White Space: Business Model Innovation for Growth and Renewal is dedicated to developing new business models within incumbent organizations, I don’t mean to imply that incumbent companies shouldn’t seek to achieve transformative growth and exploit opportunities in their white space through mergers and acquisitions—they should. Building models in-house is not the only option for companies seeking transformational growth. Corporations can transform their business models through acquisitions as well. When Anderson took over Best Buy, in fact, he led the company through a series of strategic acquisitions that helped it grow beyond a pure retail sales model.

But it’s no news to point out that acquisitions, at the best of times, are tricky. Study after study finds that acquisitions tend to disappoint, variously estimating that half to as many as 80 percent fail to create value. The high-profile struggle of AOL after its $180 billion acquisition of Time Warner is one obvious example of an acquisition gone bad. But there are others: Daimler/Chrysler, Sprint/Nextel, and Quaker Oats/Snapple, to name only a few. Quaker Oats paid $1.7 billion for the Snapple brand in 1994 but sold it to Triarc three years later for a mere $300 million.

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