When CEO Rusty took over Merrill Corporation — a 50+-year-old, sales-led conglomerate with roughly 11 operating divisions — he identified Datasite (then a diligence-stage software platform) as the company's "crown jewel": the one business with the potential to scale as a focused, product-led technology platform. Rather than modernizing all 11 divisions at once, he divested the translations, legal-tech-services, and court-reporting businesses and consolidated the company's identity and investment around Datasite alone.
The explicit logic voiced inside the company: "technology based businesses...have a much higher valuation than an equivalent revenue service-based business" — focus here wasn't just an operating preference, it was a capital-allocation bet that a smaller, coherent software company would be worth more than a larger, diversified services conglomerate.
This is company-level focus taken to its most radical form: not deprioritizing initiatives inside one business, but shedding entire businesses to fund and staff one. It was the precondition for everything downstream — Wholesale Leadership Replacement (Replace vs. Coach-Up) and Org-Architecture Mirroring (Squads ↔ Microservices) were only possible because the company had one platform to redesign around, not eleven.
Related: Business Strategy, Placing Bets (Strategy-as-Bets Framing).
At Datasite, CEO Rusty executed this as a sequence: identify the one business line with real platform/software potential (the 'crown jewel'), then sell off the lower-margin, people-intensive divisions that didn't have that potential, concentrating investment and leadership attention on the surviving platform business. The board case for this sequence was made using a Sum-of-the-Parts Valuation Pitch, not an R&D-budget framing.
For mature businesses running several product lines, Eriksson argues the real strategic decision is often about pruning rather than adding — cutting a business line that's large but non-growing and costly to maintain — rather than the more visible question of 'what's next.' Because strategy conversations default to talking about new bets, this kind of subtraction stays invisible unless a framework (like the The Decision Stack (Eriksson)) forces an explicit look at what's currently being funded and why.
Из тем: Transformation in Practice