Unlocking Growth in New Markets: Why Most Corporate Innovation Misses the Mark

July 4, 2025

Unlocking Growth in New Markets: Why Most Corporate Innovation Misses the Mark

Growth Strategy / Innovation / International Expansion

04. July, 2025

The Growth Imperative and Its Hidden Risks

For established companies, the pursuit of sustainable growth is a constant challenge. As core markets mature and competitive pressures intensify, business leaders are compelled to seek new opportunities beyond their traditional boundaries. Expanding into new markets, customer segments, or technologies—what many call “outside-the-core innovation”—is now a strategic necessity for organizations aiming to remain relevant and competitive. However, the failure rate for such initiatives remains stubbornly high. Studies show that up to 90% of startups and a significant percentage of corporate innovation projects fail to achieve their intended outcomes. While the risks of entering unfamiliar territory are well recognized, the underlying causes of failure are often misunderstood. Contrary to popular belief, the greatest threat to outside-the-core innovation is not the novelty of the market or the complexity of the technology, but the hidden, untested assumptions that teams bring from their core business.

Why Most Outside-the-Core Innovation Fails

A common misconception among executives is that the further a project moves from the core business, the higher its risk of failure. While distance from the core does introduce new challenges, research and practical experience reveal a more nuanced reality. The most significant risks arise when organizations fail to recognize and rigorously test the assumptions embedded in their business models—especially those that feel routine or “safe.” In-depth case studies across multiple industries have shown that even projects perceived as “high risk” due to their distance from the core can succeed if teams systematically surface and adapt their assumptions. Conversely, projects that seem only a step or two away from the core often falter when teams underestimate the degree of change required in areas such as distribution channels, cost structure, unit margins, and operational velocity.

The Waterfall Effect of Faulty Assumptions

Hidden assumptions can create a cascade of negative effects across the business model. For example, assuming that existing sales channels will work for a new product can lead to misaligned pricing strategies, unsustainable cost structures, and ultimately, poor market adoption. Similarly, projecting legacy overhead costs onto new ventures can lock projects into uncompetitive economics before they even launch. These “waterfall effects” are rarely isolated. One false assumption can undermine multiple aspects of the business, compounding risk and making recovery difficult. The most successful organizations are those that recognize the interconnectedness of business model components and proactively test their assumptions at every stage.

The Role of Organizational Learning and Ambidextrous Leadership

To overcome the risks of hidden assumptions, organizations must embed explicit learning and adaptation into their innovation processes. This approach involves starting new ventures at a manageable scale, growing them at a pace determined by validated learning, and allowing time for false or hidden assumptions to surface and be addressed. Moreover, outside-the-core innovation demands ambidextrous leadership. Senior executives must be able to manage established businesses with discipline and efficiency while simultaneously fostering an environment of experimentation and learning for new initiatives. This dual capability is essential for navigating the inevitable setbacks and pivots that characterize successful innovation efforts.

Practical Strategies for Success in New Markets

Systematically Challenge Assumptions

- Use structured frameworks, such as an enhanced Business Model Canvas, to map out every component of the new business. Pay particular attention to areas that seem routine, such as channels, cost structure, margins, and operational velocity.
- Treat every assumption as a hypothesis to be tested, not a fact to be accepted.

Start Small and Scale with Learning

- Launch new initiatives at a scale that allows for rapid experimentation and adaptation.
- Allow the pace of growth to be dictated by the rate at which key assumptions are validated or refuted.

Foster Ambidextrous Leadership

- Identify and empower leaders who can balance operational excellence in the core business with agility and openness in new ventures.
- Ensure that senior management is prepared to provide persistent support, even when early results are disappointing.

Embed Organizational Learning

- Create feedback loops that capture lessons from both successes and failures.
- Encourage teams to view setbacks as opportunities for learning and improvement, not just as risks to be avoided.

Prioritize Adaptation Over Perfection

- Recognize that no business model is perfect from the outset. The ability to adapt quickly to new information is a key differentiator between successful and unsuccessful projects.
- Encourage a culture where course correction is seen as a strength, not a weakness.

Turning Failure into Opportunity

Innovation failure is not necessarily a negative outcome. In fact, some of the most valuable organizational learning comes from projects that do not meet their original objectives. By treating failure as a source of insight rather than a setback, companies can refine their business models, improve their innovation capabilities, and ultimately drive better organizational performance.

Conclusion: Building a Resilient Growth Engine

Sustainable growth in new markets is within reach for organizations willing to challenge their own thinking. The real risk in outside-the-core innovation lies not in the unfamiliarity of the market, but in the comfort of old assumptions. By systematically surfacing, testing, and adapting these assumptions, leaders can transform high-risk ventures into engines of sustainable growth.

Unlock Your Next Level of Sustainable Growth

Ready to accelerate your business beyond the core?

Partner with International Growth Solutions to unlock sustainable growth through strategic insight, transformative leadership, and operational excellence—at every stage of your innovation journey. Whether you’re venturing into new markets or rethinking your business model, our expertise helps you identify hidden risks, validate assumptions, and build resilient engines for lasting success.

Book your complimentary consultation today and discover how our proven approach can help you achieve measurable, sustainable results.

Inna Hüessmanns, MBA

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Performance Management in Sales: The Strategic Lever for C-Level Growth

June 27, 2025

Performance Management in Sales: The Strategic Lever for C-Level Growth

Performance Management / Growth Strategy

27. June, 2025

For Chief Sales Officers, CEOs, and their executive peers, the effectiveness of performance management systems is not just a matter of operational detail—it is a strategic imperative that shapes growth, profitability, and long-term competitive advantage. But despite decades of investment in incentive plans, sales enablement, and process optimization, many organizations still find themselves grappling with missed targets, unpredictable sales cycles, and disengaged sales teams. Why does this happen? The answer lies in the complex interplay between incentive design, monitoring, territory management, and the behavioral dynamics of high-performing sales organizations.

Why Performance Management Is the C-Level Priority

Performance management is far more than setting targets and reviewing dashboards. It is the art and science of aligning individual effort, motivation, and organizational goals to drive sustained business results. For sales-driven companies, this means designing systems that not only incentivize effort but also channel it toward the activities that matter most for value creation.

Research and field evidence show that the structure of performance management—how you monitor, incentivize, and allocate resources—directly impacts both top-line growth and bottom-line profitability. Yet, too often, organizations fall back on legacy compensation plans and outdated territory structures, missing out on substantial gains in productivity and engagement.

Behavior-Based vs. Outcome-Based Controls: Two Sides of Performance Management

At the heart of sales performance management are two contrasting approaches:

Behavior-based controls emphasize direct managerial involvement: coaching, collaboration, and ongoing feedback. Here, sales managers work closely with their teams to guide activities, correct course, and foster development.

Outcome-based controls rely on the market and incentive systems, managing at arm’s length through compensation and quotas. This approach gives salespeople greater autonomy but places the burden of motivation on financial rewards and targets.

The most effective organizations blend these approaches, tailoring the mix to the complexity of the sales role and the maturity of the team. For example, behavior-based controls are particularly valuable in complex, multi-tasking environments, while outcome-based controls excel in focused, transaction-driven roles.

The Power—and Pitfalls—of Incentive Design How Incentive Schemes Shape Behavior

The choice between bonuses and commissions has profound effects on sales force productivity and behavior:

Commission plans boost overall productivity by about 24% compared to bonus plans, especially among lower-ability salespeople. Why? Because commissions motivate both low- and high-ability reps to exert more effort—low-ability reps now have a chance to earn beyond a fixed salary, and high-ability reps are no longer capped by a fixed bonus ceiling.

Bonuses, while effective at driving reps to hit quotas, often lead to a sharp drop in effort once the quota is achieved. Salespeople tend to “push” or “pull” sales between periods to maximize their payout, resulting in erratic sales cycles and operational inefficiencies.

Commissions, on the other hand, can create multitasking distortions. Reps focus on what is measured and paid for, sometimes neglecting important but non-incentivized activities such as customer onboarding, cross-selling, or market development.

The Role of Ability and Effort

Sales teams are inherently heterogeneous. Each rep brings a unique mix of skills and motivation. Under bonus plans, high-ability reps reach quotas with less effort, while lower-ability reps may disengage. Under commission plans, high-ability reps are incentivized to keep pushing, and lower-ability reps are motivated to increase effort for a chance at incremental earnings.

The most significant productivity gains under commission plans are observed among lower-ability reps who previously put in minimal effort under bonus schemes. For high-ability reps, the absence of an earnings ceiling in commission plans drives even higher performance.

The Quota Conundrum: Setting the Right Targets

Quotas are a double-edged sword in performance management:

Set too high: Reps become discouraged and may disengage, believing targets are unattainable.
Set too low: Reps coast, earning bonuses with minimal effort and leaving value on the table.
Set just right: Quotas provide a psychological challenge and a clear path to reward, aligning effort with organizational goals.

However, bonuses can amplify timing games and demotivate after quotas are hit, while commissions keep effort high but may lead to neglect of non-incentivized tasks. The key is to calibrate quotas using data-driven methods that reflect territory differences and market potential, and to regularly review and adjust them as conditions change.

Monitoring and the Cost of Control

Monitoring is a critical component of performance management. Internal activities (such as CRM updates or compliance tasks) are relatively easy to monitor, while external, customer-facing activities are much harder and more expensive to track. Over-monitoring can distort effort, with reps focusing on what is measured rather than what matters.

The optimal approach? Monitor internal activities only where necessary for compliance or process improvement, and use incentives to drive external, outcome-focused efforts. Align risk preferences—risk-tolerant, entrepreneurial reps thrive under high-powered incentive plans, while risk-averse reps may require more monitoring and support.

The Strategic Importance of Territory Design

Territory alignment is often an afterthought in performance management, but it is one of the most powerful levers for sales effectiveness:

Poorly designed territories constrain opportunity, demotivate reps, and inflate costs.
More than half of all sales territories are either too large or too small, leading to suboptimal customer coverage and misaligned performance evaluations.
Optimized territories can increase sales by 2–7% simply by improving customer coverage and reducing wasted effort.

Regular audits and data-driven realignment of territories are essential to ensure balanced opportunity and workload, protect core strengths during new launches, and manage transitions to minimize disruption.

Motivation, Job Satisfaction, and the Will to Win

Effort and motivation are not the same. Motivation is the driving force that impels action, while effort is the energy invested in behavior over time. Salespeople who are highly involved with their work and satisfied in their roles are more likely to exert discretionary effort and persevere in the face of setbacks.

Sales managers play a crucial role in this dynamic. By providing meaningful challenges, clear communication of goals, and opportunities for intrinsic motivation, managers can foster higher engagement and performance. Well-articulated goals help salespeople understand and accept their roles in achieving organizational success.

Managerial Implications: Building a High-Performance Sales Organization

To unlock the full potential of your sales force, C-level leaders should focus on these research-backed strategies:

Choose incentive plans that match the complexity of the sales task portfolio. Use commissions for focused, measurable roles and bonuses for complex, multi-tasking environments.
Calibrate quotas with precision. Leverage analytics to set challenging yet achievable targets and adjust regularly to reflect market realities.
Balance monitoring and autonomy. Monitor only what matters and support autonomy to foster intrinsic motivation.
Optimize territory alignment. Use advanced tools to ensure balanced opportunity and workload, and manage transitions proactively.
Foster a culture of engagement and satisfaction. Invest in job satisfaction, communicate clear goals, and recognize effort as well as outcomes.

Conclusion: Performance Management as a Strategic Growth Engine

Performance management is not just a sales issue—it is a boardroom priority. The most successful organizations don’t just pay more; they pay smarter, aligning incentives, monitoring, and territory design with business goals and the realities of human motivation. By taking a holistic, research-driven approach to performance management, C-level leaders can unlock hidden productivity, reduce costly turnover, and drive sustainable, profitable growth.

Are you ready to transform your sales performance management?

Our consulting services are designed to help you diagnose hidden inefficiencies, optimize incentive systems, and build high-performing sales organizations. Contact us today to schedule a Sales Force Effectiveness Assessment and discover how you can turn your sales team into a true growth engine.

This article is part of the Insights section of our website, where we share the latest thinking on performance management, sales effectiveness, and strategic growth for C-level leaders.

Inna Hüessmanns, MBA

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From Local Success to Global Impact: How C-Level Leaders Can De-Risk Product Launches

June 20, 2025

From Local Success to Global Impact: How C-Level Leaders Can De-Risk Product Launches

Product-Market-Fit / Growth Strategy /Market Intelligence / International Expansion

20. June, 2025

The Executive Challenge: Why Proven Ideas Still Miss the Mark

For today’s C-level leaders, launching new products—especially across international markets—presents both opportunity and risk. Even the most experienced organizations can fall into the trap of relying on internal assumptions or replicating local market wins, only to face disappointing results abroad. The stakes are high: resources are invested, reputations are on the line, and growth targets depend on successful execution.

The Stark Reality: Why So Many Product Launches Fail

Recent research indicates that between 55% and 80% of B2B product launches fail to meet their revenue or performance targets in the first year. Our experience partnering with both SMEs and global organizations confirms this sobering trend. The most frequent causes include:

Unclear Value Propositions: Launches without a compelling, differentiated customer promise.

Insufficient Market Intelligence: Decisions driven by intuition or anecdotal evidence instead of robust, data-driven insights.

Lack of Adaptation: Assuming local strategies will work globally, without considering cultural, regulatory, or competitive nuances.

Siloed Execution: Internal barriers and lack of cross-functional alignment dilute impact and slow time-to-market.

The Solution: Product-Market Fit Analysis and Market Intelligence

Product-market fit is the foundation of sustainable growth. It means your offering solves a real problem for a clearly defined customer segment—so much so that customers are eager to buy, recommend, and return. Achieving this, especially in new markets, requires more than a great idea.

Why Product-Market Fit Matters for C-Level Leaders

Reduces Risk: Validates real demand before major investments, minimizing costly missteps.
Drives Local Adaptation: Uncovers market-specific needs, enabling tailored features, pricing, and messaging.
Accelerates Growth: Delighted customers become advocates, fueling organic expansion and brand credibility.
Attracts Investment: Demonstrates traction and market understanding, increasing stakeholder and investor confidence.

Building a Market-Oriented, Growth-Driven Organization

To consistently deliver successful product launches, leading organizations embrace:

1. Customer Orientation

Ongoing analysis of customer needs throughout the product lifecycle.
Innovation across the entire business system, including service, support, and delivery.

2. Competitor Orientation

Systematic monitoring of competitor strengths, weaknesses, and strategies to identify differentiation opportunities.

3. Cross-Functional Coordination

Breaking down silos to ensure insights from sales, marketing, R&D, and customer support are shared and acted upon.

4. Superior Market Intelligence

Investing in comprehensive market analysis, competitor analysis, and customer value research.
Leveraging both quantitative data (usage metrics, sales trends) and qualitative insights (customer interviews, feedback loops).

Actionable Recommendations for C-Level Executives

Start with the Problem: Validate real customer pain points before building new features or entering new markets.

Pilot and Iterate: Test in small, diverse segments and adapt quickly based on feedback.

Localize with Purpose: Don’t assume your local strategy will work abroad. Adapt your product, positioning, and go-to-market approach for each market.

Foster a Culture of Intelligence: Make market intelligence and customer feedback central to every strategic decision.

Measure What Matters: Track metrics that reflect true product-market fit—retention, repeat usage, referrals—not just vanity metrics.

Unlock Confident Growth with International Growth Solutions

Avoid the costly pitfalls of failed product launches—over half of new B2B products miss their targets, often due to a lack of clear market understanding. Our Product-Market-Fit Analysis is designed to ensure your product delivers real value to your target clients before you invest further, helping you validate demand, reduce wasted resources, and accelerate your time-to-market.

Why Partner with Us?

Market Analysis: In-depth research to identify trends, opportunities, and threats in your target markets.
Competitor Analysis: Comprehensive benchmarking to reveal gaps, strengths, and strategic positioning.
Customer Value Research: Actionable insights into what your customers truly value—enabling you to innovate with confidence.
Product-Market-Fit Analysis: Rigorous validation of your offering, tailored for international and cross-border growth.
Strategic Guidance & Execution: From go-to-market planning to interim leadership, we help you drive transformation and results at every growth stage.

Take the Next Step

Book a complimentary consultation to discover how our market research and product-market-fit solutions can help you avoid costly mistakes, accelerate growth, and achieve sustainable international success.

Inna Hüessmanns, MBA

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Growth Strategy