A ‘roll-up’ is a business strategy in which a company acquires multiple smaller companies in the same industry, with the aim of consolidating or creating a new large entity. This is also known as a ‘consolidation strategy.’
A roll-up strategy, where multiple smaller companies in the same industry are acquired and merged to create a larger entity, can apply to innovation teams, but with some nuances. Here’s how it could work and the challenges involved:
How a roll-up strategy can apply to innovation teams
- Acquiring specialized innovation teams – Instead of acquiring entire companies, a roll-up could involve merging multiple smaller, specialized innovation teams from different organizations, startups, or research groups to create a more powerful, centralized innovation hub.
- Aggregating intellectual property and knowledge – By consolidating teams, you can pool patents, R&D capabilities, and domain expertise, creating a stronger competitive advantage.
- Scaling innovation efforts faster – Smaller, independent innovation groups may lack the resources to scale their ideas. A roll-up strategy can give them shared infrastructure, funding, and leadership to accelerate development.
- Cross-pollination of ideas – Bringing together diverse innovation teams from different backgrounds fosters collaboration and new idea generation, potentially leading to breakthrough innovations.
Challenges and considerations of a roll-up strategy
- Culture and integration risks – Innovation teams thrive on autonomy and creativity. Merging them into a larger entity might lead to bureaucratic inefficiencies or loss of agility.
- Leadership alignment – Different teams may have different goals, structures, and leadership styles, making integration tricky.
- Measuring success – Unlike traditional roll-ups, where financial performance is the primary metric, innovation roll-ups need to be measured based on R&D output, patents, and successful product launches.
- Talent retention – Innovators often value independence. If the roll-up limits their creative freedom, key talent may leave.
When a roll-ip strategy it makes sense in innovation
- If a company wants to consolidate innovation efforts across subsidiaries or acquired startups.
- If an industry is fragmented with many small, underfunded innovation teams working on similar problems.
- If there’s a need for synergies between different fields of research (e.g., AI, biotech, and robotics teams working together).
Are you considering applying a roll-up strategy in a corporate R&D setting or in a startup ecosystem?
