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 / Autumn 2012 / Issue 68(originally published by Booz & Company)


Blank Checks: Unleashing the Potential of People and Businesses

Moreover, teams that sign up for blank checks are held strictly accountable for quantifiable results. Blank checks represent freedom within a framework — freedom to act, but with a set of ground rules to ensure that the initiatives stay on strategy and produce results. For example, the framework might include a set of company priorities or areas of focus, innovation platforms, big bets, or even an acquisition strategy that guides the company’s overall strategy or vision. At Kraft Foods, for example, the company’s developing markets business has a focused growth strategy that concentrates on five key categories (e.g., biscuits and chocolate), 10 power brands (e.g., Oreo, Tang, Trident, and Cadbury), and 10 priority markets (e.g., Brazil, India, and China); the strategy is called 5-10-10. (See “Growth through Focus: A Blueprint for Driving Profitable Expansion,” by Sanjay Khosla and Mohanbir Sawhney, s+b, Autumn 2010.) The company uses this strategy as its framework, and gives freedom to select teams in the organization to drive the 5-10-10 growth agenda with blank checks.

How Blank Checks Work

To put the blank check idea to work, business leaders need to go through a systematic process of picking the best bets, selecting the team, defining goals and plans, kicking off the initiative, and monitoring the results. Here’s what happens at each of these five steps.

1. Picking the best bets. The first step in a blank check initiative is for the business leaders to choose the business domains that should be targeted for growth. Blank checks are designed to fund big bets, so it is important that the bets are chosen carefully. Business domains can be defined in different ways or viewed through different lenses — a geographic market (China, for example), a brand (Tang), a channel (food service), a category (beverages), or a consumer segment (teenagers). The domain can also be a combination of these (Oreos in China). Blank checks can be applied to functional areas, such as the supply chain or manufacturing. We recommend selecting two or three definitions for the domain, at most, and using these definitions to shape the larger strategic context within which to look for blank check projects. The objective is for the initiative to be performance-driven and values-led, as well as compliant with federal and local laws and the company’s compliance practices.

As the business leaders choose the domains for the blank check initiatives, they need to keep three criteria in mind. At Kraft developing markets, we call these “the three Ms.” First, the business should ideally have significant Momentum. It is always easier to build on a business domain that is working well than to fix a domain that is broken. A key success factor is to “mine for gold” — to identify what is working and then scale up quickly when the reasons for success become evident. A second key success factor for driving a virtuous cycle of growth is Margin potential in the business. Growth for the sake of growth is often dangerous. Third, the business initiative should be Material — something that produces high impact with the least possible effort. There should be sufficient headroom for the business to grow.

2. Selecting the team. Blank checks are ultimately bets on people, rooted in the faith that they have the potential, the passion, and the perseverance to transform their businesses. Selecting the recipient of a blank check begins with the top leadership team working closely with the leader of a given business to identify the person who is most naturally accountable for a certain area of the business where the blank check can ignite transformation. Team leaders selected for blank check initiatives need not be the most senior or the most experienced — more important is for them to be the people with the most potential. But that is just the initial criterion.

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  1. Sanjay Khosla and Mohanbir Sawhney, “Growth through Focus: A Blueprint for Driving Profitable Expansion,” s+b, Autumn 2010: Rather than seek increased revenues and profits by expanding products and markets, companies should follow a seven-step strategy for achieving more with less.
  2. Irene Rosenfeld, “Inside the Kraft Foods Transformation,” s+b, Autumn 2009: Top leaders from the largest food and beverage company in the U.S. talking about their three-year turnaround and their campaign to reorganize for growth.
  3. For more thought leadership on this topic, see the s+b website at:
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