What I learned from leading a (semi)failed corporate venture.

Building ventures within companies is really hard.

A few years ago, I was tasked with taking on the exciting challenge of building a challenger venture within the remit of my larger organization. We stood up the team of this new venture with a lot of passion and a strong case for why we needed to disrupt ourselves. 2 years later, a lot of capital, and a delayed launch that resulted in customer acquisition much lower than expected — I can say I learned a lot about how and how not to set up a corporate venture for success. I’ve also talked to a lot of others who have been on similar journeys to varying degrees of success. While we still got the product to market, and it’s something I am deeply proud of, it fell short of a lot of its goals.

Here’s what I learned:

• Find Right Performers, Not High Performers
• Don’t Let People Learn On the Job
• Use (the Right) Partners
• Beware of Overprocessing and Overplanning
• Paralysis by Analysis
• Protect it, Structurally and Even Legally
• Where There are Overlaps It Needs a Veto
• Keep it Accountable to its Milestones
• Avoid or Augment HiPPO Governance

Find Right Performers, Not High Performers

When searching for a team to lead a new venture, it is common to turn inwards and find people across the existing organization to join. Leading a venture can be exciting and a great opportunity for development. Often those tapped on the shoulder are the “high performers” from across the organization, those who have stood out and won some support. But often high performers in the company are able to perform within the context of that company, not a new one. This can mean they are great at following processes, office politics, building robust cases/analysis, and other more traditional corporate skills. Sometimes the right people for the job are the ones that might be a bit more polarizing, who break rules and aren’t as motivated by upwards progression. The right people often aren’t the “lifers” or the ones with ambitions of the c-suite. Ventures don’t have a playbook and often the problem is brand new. The right people are more likely to thrive at a start-up than a large corporation, which makes them perfect for building a venture very unlike the company they have succeeded within.

Don’t Let People Learn on the Job

One of the benefits of being at a larger company is access to talent and resources at your disposal across the organization. But many of these people are well suited to the current capabilities of the organization and not the future ones. In some cases, accessing regulatory advice or not having to build out a full HR function can be a huge help, time accelerator, and cost saver. In a few cases, the skill gap is small and people can quickly adjust how they work to meet the needs of the new venture. But in other cases, borrowed resources will have to “learn on the job” and this becomes more of a detriment than a benefit. If the goal is to upskill the organization this may be ok, but if the goal is to launch a high-quality product quickly to market — the learning curve might just be too steep. In critical areas, it is important to find skilled and experienced resources that are masters of those skills.

Use (the right) Partners

There are a ton of moving parts when building a venture. In many cases, it may make sense to chunk off specific work to experts who can avoid reinventing the wheel. Leveraging experts in shorter-term, more deliverable-based work (think process design, economic case creation, or creating a risk model) might make a lot of sense. It also helps to use partners in areas where getting it wrong may be a high risk to the venture — such as tech development or brand creation. But, you have to find the right partners and ensure they are truly not reinventing the wheel. Find partners that can guide your team quickly and efficiently through the execution of the venture and are invested in your success. Look for partners where delivery is incentivized, not Time & Material based, and where culture is aligned.

Beware of Overprocessing and Overplanning

Plans and processes can be a crutch that helps provide a false sense of certainty and security to a venture and those supporting it. Process and planning are important, but overdoing it can lead to unnecessary bureaucracy and delayed action. There are lots of tools to use when building a venture: market sizing, customer discovery, scrum, agile, kanbans, lean canvases, and more. An overly academic approach puts an emphasis on the start rather than the execution. De-risking a venture is important, but creating slides and developing guesstimates won’t help. Whatever plans you make — they’ll probably be wrong. The best plan is one that emphasizes action, testing, and experimentation — “just do it”.

Paralysis by Analysis

There isn’t an answer. By default, a new venture is usually inherently different from the core of the business — whether due to new product sets, new markets, or both. It can be easy as a large organization to fall into the collection of data, insights, and analysis to help provide a false sense of certainty on an uncharted path. In my experience, very few of our initial assumptions, data, or business cases held true. Forecasting and trying to predict the future (and sometimes even the present) is hard and can be a time trap. Answers will sooner develop through action, delivery, and bravery than (over)thinking, research, and risk mitigation.

Protect It, Structurally and Even Legally

Ventures are not a short-term endeavor. A lot can happen inside a company in the same period it takes to go from business case to launch. Leadership at the top, corporate strategy, and the market can all shift monumentally. Ultimately, the context for which the venture was created can be forgotten or overwritten. The challenge exists when trying to adjust the rules, roles, or metrics mid-venture instead of following through on the plan. This can create confusion or necessitate a rebuild to meet new requirements. It can be easy to “bring it in” and centralize the team before the product-market fit is proven. Ventures that are able to make it to market with much the same strategy as they started, seem to be the most successful. Those that are subject to organizational change and turmoil often struggle. Sheltering the venture from these organizational changes or shifts in risk tolerance is key.

Where There Are Overlaps, It Needs a Veto

The venture will still likely need to work with or within some of the parts of the larger organization. But a scrappy venture moving quickly to delivery often runs up against larger processes. Processes such as procurement, reporting, training, and decision authorities can create huge rubs. Some areas might be non-negotiable, such as policies or security protocols. But others should be adjusted to fit the needs of the venture or the venture should be allowed to blow through them. Red tape, bureaucracy, and heavy admin/stakeholder engagement all work in direct conflict to the goal of launching something quickly that customers love.

Keep It Accountable to its Milestones

One of the hardest parts of launching a venture within a corporation can be to hold it accountable. Setting milestones with metrics is the first part. But actually doing something when either the milestones are hit or missed is hard. It can be easy to “give it another month” and not spend the time investigating and improving the venture to avoid future milestone misses. Milestones have to mean something to both the team and the overseers or they will continue to slide. Day to day work will continue without an “All hands on deck” to address any major blockers or problems with the building approach. If a core decision (be it tech stack, team, or otherwise) has affected the venture it likely will continue to. Sunk costs can’t create avoidance and strong governance to milestones will improve the chances of success.

Avoid or Augment HiPPO Governance

Governance is a love-hate reality in the world of ventures. On one side, it is a necessary function to help provide oversight, insight, and assistance for the venture to achieve its goals. On the other side, if done wrong, it can be time-consuming, harmful, or a missed opportunity. Oftentimes the most senior of the organization gets put into these oversight roles. But, usually, ventures are full of new and different capabilities, realities, and processes than the parent organization. Those governing the venture may not know what to look for, the questions to ask, or how to help. They may spend more time learning the lingo than helping the venture. The HiPPO (highest paid person’s opinion) can end up interpreting things such as burndown charts or agile velocity incorrectly or adding arbitrary features to roadmaps. Again, assembling the right people to guide and govern the venture, not just the most senior, will set it up for success.

In Closing, Luck Favors the Prepared

Ventures are sexy and exciting, but extremely hard. Learning from others, admitting where your blind spots are, and having a healthy dose of fear and humility can help ensure that at the very least you don’t make the same mistakes as others. When you can assemble a rockstar team, and potentially work with some experienced partners, the path to building a venture can be a rewarding and successful one.

ABOUT NOW OR NEVER: Now or Never is a challenger consultancy providing strategy & insight work, modular consulting projects & new venture creation. We have worked with everyone from start-ups to large pension funds. Iain Montgomery & Alex Nuth are the co-founders of the agency — combining both big consultancy experience & the scars of actually doing innovation within organizations.