A Consultant's View

Prairie Trail Software, Inc. ............................................................. May 2010

White Space Teams

During this Great Recession, we are seeing companies reinventing what it means to be an American corporation. One aspect of these corporations is the constant trying new ideas and putting them to market. For some companies, they do not have any limits on what those new ideas are. In order to manage this process, they have something called "White Space" teams.

A "White Space" team is a team of marketers, developers, and executives who are tasked with finding a new market and delivering something to that market. What makes a "White Space" team different from a task force within other companies is that the "White Space" team has no constraints on how and what they are to design and deliver. In other words, if they deliver a product that will "cannibalize" an existing profitable product and uses none of the existing corporate structures, that is perfectly fine.

White Space teams are one way that corporations can break free from the tyranny of the past. Many a corporation gets stuck in defending their "cash cows". Just look at Kodak with their support for film photography when everyone is moving to digital. Most corporations are not willing to jettison their investments in their current products in order to get a new market.

It is far more common that the existing structures, agreements, and ways of doing business will destroy the new. Just look at GM and IBM as examples. The GM Saturn brand was established far away from the way the rest of the company was operating and the customers loved it. Instead of changing the rest of GM, the old ways were brought into Saturn and the brand was destroyed. Similarly, IBM used a radical approach to build the first PC, but then tried to bring that division back under corporate control Ė only to lose the whole market.

For a "White Space" team to succeed, it has to have the support of top management for the creative destruction that will follow a successful launch. Every new idea will have some costs to the company and people will defend their turf. But if the idea is successful, it will generate enough new business to justify the cost to the existing product.

Part of the reason for using a "White Space" team is because they will provide a new corporate structure to meet this new market. If the market were just an evolutionary upgrade from an existing market, then the current corporate structure would be sufficient to capitalize on the opportunity. In most cases, a new corporate structure will be needed. Thus, bypassing the current stake holders is not only wise, but essential.

Managing such teams is difficult as the criteria for success is different. The success is a profitable product launch. A number of companies have failed to manage such teams properly.