Corporate Venture Building
Corporate venture builders help corporations spin out new ventures to commercialize products and services. The objective is to realize growth opportunities without navigating the inefficiencies of innovating within a large organization. Venture building leverages the corporation's existing domain expertise, intellectual property, market insights, and sales channel, while still freeing the venture to operate with a high degree of independence. Independence is critical since new ventures are otherwise in direct competition with short-term incremental innovations and marketing initiatives for resources. They seldom win given the quarterly pressure that business unit leaders face. Nonetheless, most corporate ventures are expected to remain strategically aligned with the parent company.
Corporate venture building is typically structured in one of two ways.
New venture incubators are cross-functional collaborations between relatively independent teams of intrapreneurs. Their goal is to identify new opportunities that support the company's mid- to long-term interests. The venture teams are empowered with sufficient resources and can make decisions at startup speed without approval from the corporate hierarchy. Like a startup, the team has the mandate to explore radical ideas and business models that solve customer needs. The ventures may be spun out as an independent brand or set up as a new product group or business unit.
Corporate innovation labs support existing business units by generating new ideas for new or improved products and service. Although the intention is often to explore emerging opportunities, the close connection to the core business often constrains the scope of innovation. As a result, this structure is best suited for improving existing offerings. Strong support is needed from senior management to circumvent “innovation theatre”, where innovation initiatives allow a company to present itself as innovative without truly investing in the process of breaking new ground.
Engagements typically range from three to six months.
Who is this for?
Seniority: C (e.g., CFO, President), C-1 (e.g., vice president, global head of X), C-2 (e.g., director, regional head of X)
Functions: Business Leadership (e.g. P&L ownership), Innovation (e.g., R&D, accelerator, CDO)
- Define the new venture structure that best fits your organization's structure and goals.
- Set clear priorities and target markets and provide sufficient autonomy and budget to allow internal teams to act as startups in developing these markets.
- Build internal competencies and external networks to support new growth initiatives.