In his post entitled "The Art of Intrapreneurship," business guru Guy Kawasaki offers insight into how to innovate in an established company. A key point he makes:

Kill the cash cows. This is the only acceptable perspective for both intrapreneurs and their upper management. Cash cows are wonderful -- but they should be milked and killed, not sustained until -- no pun intended -- the cows come home. Truly brave companies understand that if they don't kill their cash cows, two guys/gals in a garage will do it for them.

He then drops the killer quote:

The true purpose of cash cows is to fund new calves.

This idea is at the heart of disruptive innovation. In what is undeniably one of the greatest business books of all time, The Innovators' Solution, authors Clayton Christensen and Michael Raynor note that everything is in a value chain, and that when one element of the value chain is commoditized, the profits flow to another element. From the perspective of intrapreneurs (Kawasaki's term for entrpreneurs within an established company), the company's existing cash cow is what needs to be commoditized to open up new high margin elements of the value chain.

Of course, companies refusal to develop the competences, business processes, and value system needed to see the need to commoditize themselves is what ultimately brings about their demise.

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