Brown: How do you achieve that balance of bringing in new talent alongside existing employees who may be experienced but wedded to the status quo?

Libarikian: This is one of the biggest challenges that new builds face. It is also one of the most important levers, because with the right team and the right operating model, you will solve problems as they come. There are a couple of rules of thumb. Generally, bringing a large group of people from the core business and having them essentially form the new management team is not a good idea. You do not want the culture of a large, mature company in this start-up that needs to operate very differently. Having said that, the other end of the spectrum, which is a 100 percent brand-new team, is also not a good place to be, because the reality is that this is not a stand-alone venture. You are attached to an incumbent that presumably has a strong brand, customers, a distribution network, data, and industry know-how and you want to leverage those elements strategically in the new business. Oftentimes, successful builds have a small number of executives who know the industry and those executives build around them a team with a healthy mix of older and newer faces with fresh thinking and new skills. We did some research on this, and the successful new businesses have a majority of externally hired people but also 20 to 40 percent of staff from the incumbent organization.

How you measure these people is almost as important as the individual themselves, because people tend to change their behavior based on how they are evaluated. An individual has a certain way of behaving in the core company because of specific metrics and expectations. So what performance management system have you put in place around the new organization? How do you make sure you are not measuring financial results too early, because that will clip the venture’s wings? How do you track milestones? Those are all important considerations.

Brown: You did an executive survey that found roughly two-thirds of companies were involved in venture building over the past five years. Have those numbers gone up during the crisis?

Libarikian: Anecdotally, yes. More companies are realizing that transforming their core, whether it is legacy architectures or human capital organizations, will take too long. It will be interesting to watch the success rate. My instinct is that it will go up because we are in a sink-or-swim environment. When something seems to be a luxury, it may not get the same attention as when it is a necessity. More of these builds now are necessities.

Brown: Akash, let me turn to you. What types of businesses are you seeing emerge out of this crisis?

Akash Kumar: If you look back over the last century, we saw some of the world’s most successful businesses form during moments of crisis. For example, during the financial crisis, some fundamental assumptions were questioned. Do we need to own houses? Do we need to own cars? Out of that came the gig economy, Uber, Airbnb. The question now is, how do incumbents use this crisis as a catalyst to drive forward some innovations and redefine what the new normal is before it defines them?

We see six archetypes of businesses likely to emerge in the post-COVID-19 era (exhibit). The first one is the remote services provider, such as companies offering medical consultations and online education. It may be the easiest step forward from a business-building standpoint because it accelerates some trends that were already taking place. Before, when real estate agents offered virtual tours, they probably did not see much uptake. Now they are taking the same capability and expanding it. We could see other new services such as equipment maintenance: being able to repair a washing machine without having someone physically come to your home.