In the Harvard Review Case Study, Can One Business Have Two Revenue Models, Isolde leads Sliquent, while Emmanual heads Teomik. Both are established companies in the genetic sequencing and diagnostic industry, acquired by Scherr, who is trying to merge the two acquisitions to minimize operational overhead.
On one hand, leaving the companies as they are, allowing them to flexibly adapt to the market, is beneficial because, as both leaders argued, it enables them to react to the market – filling niches as they arise. This grants them agility to respond to the market.
However, the core issue with this approach, as I see it, is that it makes the companies beholden to the market. Doing whatever it takes to make money – whether that’s through client promises, constant realignments, or industry pivots – the companies have no north star.
I think company strategy is a function of industry, size, and competition. Though the calculus is complex, the main tradeoff is between agility/speed and direction. Unfortunately, they are mutually exclusive, so by optimizing for agility, you sacrifice the direction.
Therefore, I think the core issue is that both companies, though similar, operate two opposing business models, one sells their ‘machines’ affordably, and makes money on the back end on continual equipment sales needed to operate the machines, while the other attempts to recoup most of their money on the machines sales, and sees the additional equipment/supplies sales as superfluous.
My gut reaction on how to strategically scaffold the conversation would be to frame the conversation not, as a mashing of these entities together, but rather, how do we create a new entity – from a blank slate – cherrypicking the best of both? I think starting from this position orients everyone in the proper direction of three people against the problem, instead of three people against each other. The other practical strategy I would utilize would be to diagram everything out. Being able to visualize each business model, strategy, operations, etc. would allow us to concretely see how we could ‘unplug’ one piece and ‘plug’ it into another.
