Dress up for your first date on (ad)venturing💄💋

When making your organization venture ready — there is no tinder — like solution for sustainable corporate venturing.

Most organizations start the most obvious innovation vehicle without setting “the why” you can read more about that vital.

In addition to setting the why, be patient to launch your innovation vehicle as you should prepare the first step. Make your organization innovation ready by setting the interfaces and plain the so called “areas of tension”.

Make yourself attractive for innovation, startups & scaleups

The areas of tension

Sticky processes

The areas of tension described in “Scaling-Up Corporate Startups” by Ralph Christian Ohr & Frank Mattes , refer to the different business systems of the core company set on PREDICTABILITY and the venture business system set on AGILITY. Out of my experience as a practitioner within corporate venturing I want to dive into our top three areas of tensions or innovation blockers.

1. People

We learned previously that in order to create impact you first need to work with ventures near to the core of the company. In this way the venture gains an advantage from the technology of the mother company — its expertise, brand credibility, and loyal customer base. At the same time, , the corporate can benefit from cost effective technology advances, speed, and agility of the venture.

In order to be near to the core you need the right people. What is the motivation of internal employees to work on the ventures if they are measured by other quantitative and qualitative goals? There are three ways:

• You define joint KPI´s that reward the internal champion for working on or with a venture — which is significantly hard for HR to define. The drawback here is that HR is one of the main areas of tension due to reversed incentivisation.
• You take the personal way: don’t do it for your business unit and don’t do it for your company. Instead, you do it for yourself — personal growth — and explore different ways of spending your time without taking the risk of losing your payroll.
• The corporate devoter: At the beginning of the year you get a budget to solve a specific problem; why not do it with an external startup. You will spend less money, in less time with a higher impact and output then you could ever reach internally.

2. Processes

This is a really tough one, big organizations are not yet in a state where they can adapt to startup needs regarding process. Thus, ventures have to adapt to the processes of the corporation, this can be eased by radically:

• Improving legal contracts: If you are taking the risk on venturing, covering your ass with every kind of risk mitigating measure makes no sense. Either you risk it all and win or lose — not many other options are possible.
• Our all time favourite: Procurement. There is plenty of detail in Steve Glaveski: “Corporate Procurement is Killing Innovation” but that much being said, it is one of the toughest innovation blockers we have experienced so far. Procurement is process over people. Ventures cannot be put in a standard process — they lack competitors, runway, and don’t have the time to get paid within 180 days. By that time the venture is dead or so successful it will not want to work with you anymore. The procurement process has to take place outside of the system in the venturing unit itself with lean and fast processes, that find a solution rather than creating more roadblocks. That is where you need the smart people on the inside, that understand these processes. It is no surprise that most of the venturing vehicles themselves hire the procurers from the mothership.

3. Legacy Technology Stack

Legacy systems of corporates

Companies that have been around for hundreds of years have piled up a lot of outdated systems — from companies they bought, being bought out, shut down, and spun off. In short, too many technology modules that are not attached to one single source. Even the developers aren’t speaking the language anymore.

Open platforms game

Nevertheless, producing technology or software giants have plenty of valuable data, insights, and a lot of costly infrastructure which at the end is the attractive asset for the startup. I believe the magic happens when the new technology is based on the root technology of the mothership. plus speed is much faster than something outside of the expertise of the underlying corporate.

The goal for that has to be to re-build the technology stacks in a way that is easily accessible from an outside ecosystem of startups or inner new ventures and can rapidly be scaled up for increasing demand.

Same for the promise of reaching the customer base. There has to be a way to get the customers’ feedback, even if it is only a sample or a closed beta and to run simple and fast experiments.

Key takeaways:

• You need more than a venturing team to succeed in innovating an entire company. You need your internal champions within legal, brand, accounting, IT, strategy, and HR
• Open API´s to your internal core systems and functionalities to build an ecosystem — you don’t, can’t and will not build everything by yourself and you will gain speed advantages
• Be best of breed, Netflix, Slack and Amazon have something in common: people over processes where it makes sense — otherwise gigantic growth would not be possible

This is the Medium series intended to prevent more accelerators, labs and incubators being ramped up without sense, cause, purpose or impact. It seems easy when I read through my own article, but it took many years to get where we are now, a patient and risky investor and numerous people involved, take advantage of our learnings, it all starts with the WHY!

Christian Lindener (@MechVentura) | Twitter

Coming up next:

• Identify and select the best teams for your goals
• Execute your venture activities