A great deal of ink has been spilled, and a multitude of pixels scattered, on depictions of the corporation as a Medusa-like entity, with various business units and corporate staff functions behaving as the proverbial head sprouting a thousand snakes, each writhing and striking at the world – and, all too often, one another – in pursuit of its own particular end.
For venture capital professionals working in large corporate settings, there may be tremendous conceptual support for leveraging the external innovation ecosystem to reach strategic goals, but getting it done requires transmuting those snapping, venomous snakes into a pantheon of heroic demigods eager to champion the cause.
This task is not made any easier by the corporate venturing professional’s strange place in the corporate pecking order. Lacking ownership of profit and loss in the traditional
sense, yet charged with a mission of potentially gamechanging importance, corporate venturing managers must fight the perception that while what they are up to may be all well and good in some abstract, legacy-building sense, in the here and now it is little more than an inconvenient distraction to the critical task of making today’s numbers (and bonuses).
A small amount of attention paid by our peers will yield tremendous dividends, yet we have all experienced havingthem nod their heads vigorously in agreement while smiling and declaring full alignment and support, and then quickly becoming silent when it is time to step up.
Underlying this behaviour is our colleagues’ feeling that they have much more to lose by depending on an unreliable partner than they do to gain by introducing some
untried innovatio. Senior executive management support is essential in order to mount a successful corporate venturing programme, but no matter how solid the mandate from on high, things people do not value have a way of not getting done.
Fortunately, there is a well-proven set of tactics that can have a material impact on reversing the dynamic – of turning
your push into their pull. One of the biggest problems facing corporate venturing professionals is their activities are something of a mystery to their peers. Lacking any understanding of the peculiarities of the world of entrepreneurs and venture capitalists, internal stakeholders are incapable of getting their own gut feel for the importance of things we take for granted.
One strategy that has been shown to engage technical and profit and loss managers effectively is to demystify the corporate venturing process actively by giving them a quick, intensive overview of the way the business works, to literally sit them down in a room for three to four hours and run them through a primer of the essential elements of the craft, explain the venture capital business model, incentives and best practices, explain the development cycle, and therefore predictable needs, of early-stage enterprises, give an honest appraisal of the conflicts inherent in corporate venturing, and explain the importance of alignment and cohesiveness in using corporate venturing
as a tool to serve corporate innovation needs.
The goal of the session is twofold: superficially, you want to create an awareness of specific do’s and don’ts for the stakeholders so they have a context when you ask them to do things like due diligence or partner an early-stage firm.
But the underlying – and more-important – agenda is to demonstrate to them that corporate venturing is, in fact, a professional discipline, that it has its own logic and best
practices, and that it is not some mad, undisciplined exercise in chasing rainbows.
Once this group of internal stakeholders has been successfully sensitised to the ins and outs of corporate venturing investing, the next step is to get them applying their
new-found understanding to their own business problems. The best way to do this is to follow the corporate venturing primer with brainstorming sessions to identify specific
areas of their business that might benefit from working with portfolio companies.
Separate the participants into small groups along either technical or market lines, and guide them through considering a specific set of questions aimed at revealing the kinds of problems that have the potential to be solved by working with outside innovators.