On Monday, Google announced the formation of a new parent company, Alphabet, which will serve as the umbrella for all of its business units.
Google has clearly recognized that several of its business units are fundamentally different in nature, with each requiring a different management of its resources, processes, and profit formulas (“RPP”). Perhaps Alphabet will bring the autonomy that these individual units need, and therefore, empower these units to manage their own disruptive paths.
Managing several different innovative and disruptive businesses is a common challenge that many organizations face. Too often, organizations try to nurture an emerging business alongside a core business, and the results can be disastrous.
In order to grow and thrive, disruptive businesses must be given the opportunity to develop their own resources, processes, and profit formula. Each business unit needs to feel free to make the best decisions for their own situation.
For more on Google's restructuring and the formation of Alphabet, check out the following articles:
Google Goal in Restructuring as Alphabet: Autonomyvia the New York Times
What is Alphabet, Google's new company? via Business Insider
Google Launches New Parent Company Called Alphabet
via National Public Radio