Formula for Innovation
Read this really interesting piece on ITW (Illinois Tool Works), touching points like growing through m&a’s, complexity management of organizational structures and above all the overall business model that guides them in their ways …
ITW owes its outsize achievements to an unorthodox business model. Like many old-line outfits, ITW gets most of its growth from acquisitions. It has averaged 28 deals a year over the last decade. But management doesn’t merge new units into old ones as most companies do in order to reduce payroll and other expenses. Instead, it retains them as freestanding entities to maintain their entrepreneurial drive and keep them close to their customers. Today, the $11.7 billion conglomerate operates through 665 separate businesses, each with its own P&L statement.
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