232 Visionaries, game changers, and challengers are generating innovative business models around the world—as entrepreneurs and as workers within established organizations. An entrepreneur’s challenge is to design and successfully implement a new business model. Established organizations, though, face an equally daunting task: how to implement and manage new models while maintaining existing ones. Business thinkers such as Constantinos Markides, Charles O'Reilly III, and Michael Tushman have a word for groups that successfully meet this challenge: ambidextrous organizations. Implementing a new business model in a longstanding enterprise can be extraordinarily diffi cult because the new model may challenge or even compete with established models. The new model might require a different organizational culture, or it might target prospective customers formerly ignored by the enterprise. This begs a question: How do we implement innovative business models within long-established organizations? Scholars are divided on the issue. Many suggest spinning off new busi- ness model initiatives into separate entities. Others propose a less drastic approach and argue that innovative new business models can thrive within established organizations, either as-is or in separate business units. Constantinos Markides, for example, proposes a two-variable framework for deciding on how to manage new and traditional business models simul- taneously. The fi rst variable expresses the severity of confl ict between the models, while the second expresses strategic similarity. Yet, he also shows that success depends not only on the correct choice—integrated versus standalone implementation—but also on how the choice is implemented. Synergies, Markides claims, should be carefully exploited even when the new model is implemented in a standalone unit. Risk is a third variable to consider when deciding whether to integrate or separate an emerging model. How big is the risk that the new model will negatively affect the established one in terms of brand image, earnings, legal liability, and so forth? During the fi nancial crisis of 2008, ING, the Dutch fi nancial group, was nearly toppled by its ING Direct unit, which provides online and telephone retail banking services in overseas markets. In effect, ING treated ING Direct more as a marketing initiative than as a new, separate business model that would have been better housed in a separate entity. Finally, choices evolve over time. Markides emphasizes that compa- nies may want to consider a phased integration or a phased separation of business models. e.Schwab, the Internet arm of Charles Schwab, the U.S. retail securities broker, was initially set up as a separate unit, but later was integrated back into the main business with great success. Tesco.com, the Internet branch of Tesco, the giant U.K. retailer, made a successful transition from integrated business line into standalone unit. In the following pages we examine the issue of integration versus separa- tion with three examples described using the Business Model Canvas. The fi rst, Swiss watch manufacturer SMH, chose the integration route for its new Swatch business model in the 1980s. The second, Swiss foodmaker Nestlé, chose the separation route for bringing Nespresso to the marketplace. As of this writing, the third, German vehicle manufacturer Daimler, has yet to choose an approach for its car2go vehicle rental concept. managing multiple business models bmgen_final.indd 232 6/15/10 5:45 PM