SBU 2.0: a new tool for selecting business opportunities for the multi‐unit organization

Abstract

PurposeToday, the strictly vertical SBU is increasingly being replaced by SBUs that reach across organizational boundaries to create cross‐unit synergies, promote radical outsourcing, foster the emergence of new businesses out of what had once been functions, and pursue growth through strategic alliances at this same functional level. Both corporate and SBU executives need practical help to select which opportunities to pursue and how to prioritize them.Design/methodology/approachThe solution proposed here offers simple guidelines for opportunity assessment – a combination of analysis and a recipe – for the leveraged SBU. A.T.Kearney calls this model SBU 2.0.FindingsThe SBU 2.0 model allows the organization to see and evaluate many opportunities, not just the obvious or the trendy ones, and to make the best tradeoffs in deciding what to pursue and what to forego.Research limitations/implicationsAn illustrative case study showing best practice is offered.Practical implicationsThe evolution of the SBU has been so swift that, at many companies, there's a danger of being overwhelmed by the number of seemingly inviting opportunities for “synergy” or “leverage,” whether in the context of sharing activities, sourcing them, or recombining them. The SBU 2.0 model is designed to improve opportunity assessment.Originality/valueIntroduces the the SBU 2.0 model, which is likely to be of interest to top corporate leadership and SBU management.