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Innovating for the Future 159

resulting in the acquisition of EverBank, which will allow TIAA to meet
the financial needs of its customers in a comprehensive way for generations
to come (box three—create). Juggling all of this together—with a portfolio
mindset—was critical for Ferguson’s success.
Taking stock of your project portfolio periodically, therefore, is a criti-
cal step for embracing the future and creating a sustaining enterprise.

Getting ready for the future

In addition to carving out time to focus on the future, you must also pre-
pare for it in other ways. To innovate, you need resources and information
about threats and opportunities to guide your idea generation and exper-
imentation. You can develop both of these as part of your unit’s or team’s
day-to-day work.

Build current surplus to fund the future
Investing in the future requires that you first generate cash from your cur-
rent operations. We saw this in the Thomson Reuters case: Smith reduced
costs through simplification and focused on the turnaround of the Finan-
cial & Risk business at the beginning of his tenure. In other words, tight-
ening up your execution and improving margins of your existing business
is a good place to start. That’s what John Lundgren, CEO of Stanley Black
& Decker, did to raise the funds to buy several other companies at the
outset of its multiyear growth plan. And whatever the scale of your busi-
ness—whether you run a small venture or a unit within a larger company—
operating ever more efficiently puts money in the bank for future growth
and investment. But let’s also look at two other ways to create some surplus
for longer-term bets: developing product and market extensions (adjacen-
cies) to generate more revenue from current operations and selling off or
stopping lower-performing business areas.

Incremental innovation through adjacencies
Incremental innovation based on your current offerings is a common—and
often lower-risk—way to build investment cash. Consider the matrix of