05/28/2025

The Three Building Blocks of a Successful Venture Factory

Businesses must either be eclipsed by innovators or become one

Companies are now turning to building new businesses to fuel innovation and open new revenue sources. Half of CEOs surveyed in the fifth annual McKinsey Global Survey on new-venture building view the development of new businesses as one of their top three strategic priorities, and 90 percent of investors advocate for increased or maintained new-business-building investments. Furthermore, according to other McKinsey research, new ventures are expected to drive over half of companies’ growth in the next few years.

To bolster the chances of success, a key finding from our analysis, as well as our own experience, is that as companies build more new ventures, they become better at it. The most experienced builders, in fact, are twice as likely to see success as are novice builders. And, on average, they see 12 times more revenue in a business’s fifth year than do novices.

For this reason, companies need to not only build new businesses but also develop “business-building muscle” through a new venture factory (NVF). The NVF is a dedicated organization that creates and manages standardized tools, repeatable processes, and standardized capabilities to support the launch of new businesses. This specialized unit focuses on incubating and scaling new ideas, driving innovation and growth more quickly and precisely. When sufficiently developed, the NVF can be mobilized within days.

Please select this link to read the complete article from McKinsey.