The question remains how best to look outside the corporate walls and work with external entrepreneurs. US-based industrial conglomerates DuPont and General Electric (GE) have taken one option by disbanding their central corporate venturing units in favour of teams run out of business units.
In its statement, the latter, which sold off some of its portfolio in October, said: “As GE transitions to become a more business-centred organisation, GE Ventures is also transforming the way it operates. Entrepreneurial and venture driven activity will be focused within the individual business lines of GE and the centralised GE Ventures platform is being disbursed…. We would like to thank all of the entrepreneurs, partners, employees and innovators who made GE Ventures a leading-edge platform and drove new kinds of innovation at GE.”
Similarly, DuPont Ventures has closed with unit leads Frank Klemens and Maureen Rinkunas leaving at the end of March but the external innovation and venture connections are now being picked up by business units, such as electronics and imaging.
The challenge of cost to strategic and financial return remains important drivers and the form of how external and innovation capital are aligned will follow the functions it is designed to meet.
GE, for example, will keep a centralised licensing team under its president, Pat Patnode. Its statement said: “Innovation remains at the heart of what GE does and we welcome you to connect with our colleagues at GE Licensing to hear how we can continue partnering on revolutionary ideas.”
The alternative is a straight closure, such as Lowe’s Ventures, which was formally closed as of October when unit head Chris Langford left to become a partner at Idea Fund Partners.
Others are outsourcing venture investment. Coffee retailer Starbucks partnered last week with Sequoia Capital China to invest in the world’s second-largest economy. Yet others are expanding and building their innovation capital units, according to GCV’s survey’s preliminary results (click here to add your insights before the poll’s final close).
Iteration and change remains the only constant as organisation structures and leaders rotate but the central concept of how to tap into external innovation remains.
