In 1984 managers at Hewlett-Packard’s outpost in Boise, Idaho, launched a fledgling business based on laser technology for computer printing applications. They expected initial unit sales of 10,000 a month; they achieved 100,000 shortly after launch. By the end of the decade, HP’s managers had catapulted their Boise start-up into a $5 billion growth engine that was driven not by just one printer technology but by three. Today HP’s printing business extends into digital photography, wireless-information distribution, and e-commerce imaging. It continues to drive corporate growth.

The secret? HP’s managers relied on a corporate-level process we call "patching" to create a continually shifting mix of highly focused, tightly aligned businesses that could respond to changes in the market. In the case of laser-jet printing, the executives lopped off pieces of the core business to form new business units for such products as networked printers, keeping the laser-jet managers focused on their booming operations. They launched businesses in related products such as scanners and faxes. They transferred businesses from one division to another to make better use of skills and to optimize scale. To drive new growth, they combined businesses to create critical mass and increase cash flow. Most significant,...