Corporate Matriphagy - being eaten by your children

Matri-what?

Matriphagy. I had to look it up too. It is where in nature, a mother sacrifices herself for food for her offspring. So for example, some spiders die next to where they have laid their eggs, so that when her young hatch, they can eat her. Gruesome I know, but maybe it’s a useful mindset to consider in a disruptive corporate landscape.

I’ve written before how often the culture, mindsets and processes that created the success than many incumbent businesses may hold them back during disruption. Their competitive advantages they have created over their start up competition – financial strength, a strong brand and a large customer base – is often supported by culture, mindsets and processes that actually limit their innovation, risk taking and agility. Shifting our mindsets about protecting a core business may come into play here.

I was talking to a colleague I’m working alongside in a tech business collaboration last week, who told me about his experience of just this. As he described it, a small group had created a business within their much larger parent business “under the radar”, innovating in an underserved niche. They were true intrapreneurs.

The solution they created for the customer was better and cheaper but the margins where thinner. Better and cheaper are the rocket fuel disruptive competition is looking for.

But as soon as they started growing, making money and needing resources to grow faster, this ‘child’ business came under greater scrutiny.

How did the ‘mother’ business react? They ‘protected’ their core business, with its better margins and market share. Passively, they made life hard for their child start up, imposing structures and processes (such as pricing models) that didn’t fit what they were doing.

I asked my colleague how it panned out. “I don’t know, we all left!” was his unsurprising response. I doubt it thrived and I bet someone else entirely now has that market share.

I think a leader’s mindset of corporate matriphagy is useful here. Surely it’s better that your corporate ‘children’ (innovative sub businesses) eat into the market share of your core business than your disruptive competitor doing so?

As always, I’d love your thoughts and experiences.