This case illustrates the dilemma faced by the president of EGA, a Latin American business school, who chooses to innovate and has to make some controversial strategic, organizational and financial decisions. The case focuses on the challenges posed by product innovation, following the Stage-Gate model and describing its phases, from business case preparation, through protocol definition and product architecture, to identifying operation requirements. It explores the difficulties and dilemmas involved in starting and executing an innovation project.

In 1998, Mikel Lizarralde, anticipating the political changes lying in store for Venezuela when Chávez took over Venezuela, realized he needed to change his company's business model if it were to survive in the new domestic scenario. He managed Powerven, his family's business, which marketed the multinational General Dynamics' (GD) products in Venezuela. At that time, the company faced severe labor issues, including an ongoing conflict-riddled atmosphere, low productivity, a drain of qualified technical personnel, and workers' lacking commitment. With the support of a consultant, Lizarralde developed a change program that hinged on laying off workers to build cooperatives that would later provide their services to Powerven on an outsourcing scheme. Lizarralde secured the approval of both GD and his father. He also managed to get the reluctant support of his siblings and to persuade Powerven's top executives in order to finally convince the workers. Taking a significant risk, Lizarralde chose Powerven's best-selling branch office to run a pilot test. This experiment proved successful, and Valencia's branch office quickly increased its sales while lowering its fixed costs. In addition, the members of the cooperative in charge also saw their income rise. The results had an immediate effect, and all of Powerven's 13 branch offices had adopted the new business scheme. However, by 2008, Lizarralde started to notice with concern a few clouds building up in Powerven's horizon. Cooperatives were not as cohesive as they should have. Additionally, some signs revealed that Chávez's administration no longer supported cooperatives as staunchly as in the past. In 2008, Lizarralde was tired and rather skeptical about his company's future. He knew he had to change gears once again, but he was unsure as to the best course to take. He wondered whether he should try to solve the problems plaguing cooperatives, revamp the company's business model or simply walk away.

At the close of 2004, CANTV was Venezuela's largest privately owned company. It operated in the telecom market, the only economic sector other than oil that enjoyed sustained growth in the 1990s. At the start of 2000, it faced growing competition, regulated tariffs, and deteriorating consumer purchasing power. The company focused efforts on cost containment and the introduction of new services. Although in 2004 the telecom sector rebounded, political instability, currency devaluation, and tariff regulation affected investment plans. Poses the challenge of designing a social responsibility strategy for a large, publicly traded Latin American company operating in a context of political instability, financial volatility, and growing poverty. President Gustavo Roosen felt CANTV should project a "grand and friendly" image to its stakeholders (customers, government, and suppliers, among others). The aim was to align the social portfolio with the image of a company that generated social (friendly) and economic value (grand). The company's social responsibility was implemented through a variety of programs. CANTV had placed emphasis on philanthropy by means of the Social Fund and other sponsorships, run from the Institutional Relations Department. In 2004 CANTV launched Super@ulas, a program aligned with the telecom business and managed from the Executive Vice President's office. Some of the company's top managers expressed concern in 2004 over the results generated by social contributions, and looked for synergistic opportunities--among them improved relations with the regulating agency and alignment with business objectives. The idea was to continue providing support to social agencies, many of which were at risk as a result of the shrinking number of grant sources and a government policy that sought total control over social programs.