Building a Second Growth Engine: Here’s a Complete Guide

Umicore, the Belgian specialty metals recycling company, has long understood this lesson. As a global leader in its field—with a core business dating back two centuries—its management team recognized the opportunities presented by electric vehicles and clean energy. It therefore launched a second engine: Umicore Rechargeable Battery Materials, focused on essential battery and catalyst products. Given Umicore’s decades of experience handling lithium, nickel, cobalt, and manganese—key elements used in EV batteries—as well as its expertise in refining them into precise, high-quality formulations, its leadership was confident it could build a new business with clear technological differentiation and advantage. To fund this second engine, the company divested certain legacy assets in 2017—including its zinc business, which originated from a mine granted by Napoléon Bonaparte in 1805. Revenue from the second engine quickly eclipsed that of the recycling business, becoming the primary growth driver. The Entrepreneurial Mindset The mindset required to build a second growth engine does not arise naturally within established large enterprises. In prior research—described in our book *The Founder’s Mentality*—we identified three defining traits of this mindset: a strong, rebellious sense of mission; an obsession with the front line; and a deep sense of ownership. We found that companies exhibiting these traits accounted for 87% of fully successful second engines, 66% of reasonably successful ones, and only 12% of failed ones. In our research, this mindset emerged as the strongest of the four success factors. How do organizations embodying these traits overcome the bureaucracy that typically cripples most large enterprises? They don’t need to. Instead, they establish independent second-engine units. For example, Bradesco Bank’s digital initiative Next operates as a separate entity, with its own forward-looking technology-focused customer segments, culture, brand, and operating model. Ørsted treats each of its wind farms as an independent unit, granting site managers the freedom to shape local culture and strategy—creating a “mini-founder” experience. Jio was spun off from Reliance and endowed with a capital structure allowing external investors to purchase shares, while still leveraging corporate assets to accelerate growth. Leveraging the Scale and Assets of the First Engine It is easy to focus on the disadvantages large, bureaucratic enterprises face when launching new businesses—but incumbents also possess advantages, primarily the ability to avoid starting from scratch. For instance, Ecolab successfully built a second engine in water purification by leveraging the capabilities, channels, sales force, and customer base of its first engine. Ecolab was founded in 1923 by a salesman who noticed stains on hotel carpets and developed a cleaning solution. Later, it grew into the leading enterprise in industrial cleaning products and services—more than twice the size of its nearest competitor.

From a Resin to a Commercial Landscape: Stories of Purolite, Ecolab, and Nalco

1. Completing the Most Critical Technical Puzzle. Ecolab’s original strength lay in ‘peripheral management of water systems’—for example, preventing scale formation in cooling water, inhibiting boiler corrosion, and suppressing bacterial growth in piping. It delivered optimized system performance using chemical treatments combined with intelligent monitoring (notably its renowned 3D TRASAR™ technology). Yet one critical link remained outside its reach: core separation and purification. Purolite’s chromatographic resins and adsorption resins precisely address this bottleneck—serving high-end manufacturing sectors such as biopharmaceuticals and semiconductors. Acquiring Purolite enabled Ecolab to step directly into the heart of these high-value-add production processes, transforming itself from a ‘back-office service provider’ into a ‘core process partner.’ 2. Building a Complete ‘Water + Process’ Closed Loop. Imagine this: Ecolab treats your incoming water (Nalco’s domain), then Purolite’s resins actively participate in your production process—purifying pharmaceutical compounds or separating target products—and finally, wastewater returns to Ecolab for treatment, reuse, or compliant discharge. Once this closed loop is operational, customers become deeply embedded in the ecosystem, resulting in exceptionally high stickiness. 3. Optimizing Business Structure and Profitability. Ecolab’s traditional service model includes service contracts and recurring chemical consumption. By contrast, Purolite’s premium resins are high-margin, repeat-purchase consumables; once integrated into a customer’s production process, they generate stable, predictable cash flow—a highly attractive asset for any publicly listed company. Thus, the logic behind this acquisition is compelling: Ecolab needed Purolite’s technical depth and access to premium markets; Purolite needed Ecolab’s global network, customer base, and platform capabilities. A classic win-win. IV. Ecolab’s Water Treatment Core: Nalco Water At this point, we must highlight Nalco Water—the subsidiary within Ecolab that actually handles water treatment operations. Many people confuse the relationships among Ecolab, Nalco, and Purolite. Let’s clarify simply: • Ecolab is the parent company—the overarching group. • Nalco is Ecolab’s dedicated water treatment brand, serving industrial and municipal sectors. Its core competencies lie in chemicals, intelligent monitoring, and service. • Following its acquisition, Purolite operates as an independent business unit, focusing on resin materials and separation/purification technologies. Nalco’s signature technology is the aforementioned 3D TRASAR™. What is it? It involves installing sensors on your cooling water systems, boilers, and reverse osmosis membranes to monitor parameters—including scaling, corrosion, microbial activity, and chemical concentration—in real time, 24/7. An algorithm then automatically adjusts chemical dosing for precise control. Put plainly, it equips water systems with an intelligent autopilot system. Nalco’s product portfolio is comprehensive: from PermaCare® series for corrosion and scale inhibition, to various softeners and filters (e.g., UltraTreat™, UltraSand™), to customized solutions for data center liquid cooling and semiconductor facility management—covering virtually every facet of industrial water treatment. V. Their Relationship In summary, the relationship among these three entities can be described as follows: • Purolite provides the foundational ‘materials layer’, solving the question of ‘what to use for separation’. Its technological moat in high-end separation and purification is exceptionally high. • Nalco provides the ‘system control layer’, solving the question of ‘how to ensure stable, efficient operation of water systems’. Its intelligent monitoring and chemical solutions enjoy strong industry reputation. • Ecolab, as the group, integrates these two capabilities—and layers on top its expertise in cleaning and disinfection, food safety, and infection prevention—to form a comprehensive, multi-industry solutions platform.