Mature companies attempting to grow by entering new businesses fail far more often than not, as numerous studies confirm. Clayton Christensen estimates the failure rate to be over 90%, and a study by the Corporate Strategy Board suggests it may be as high as 99%. No matter how the terms are defined (what can be called a new business, what’s considered core versus noncore, and what constitutes success), the finding still holds.
A version of this article appeared in the July–August 2004 issue of Harvard Business Review.
