Corporate venturing is an essential approach for companies to explore fresh ideas, technologies, and markets. Nevertheless, it can prove tricky, as companies must select the right leaders and team members, establish clear objectives, determine when to invest, and be ready to adapt to changing market conditions.
Here are the best practices to help you unlock the power of corporate venturing:
Structure Your Team Effectively
Creating the right corporate venturing team is the cornerstone of success. To structure your team effectively, consider a diverse mix of talent with skills ranging from innovation and technology to market research and business strategy. Encourage cross-functional collaboration among team members to foster creativity and a comprehensive perspective.
Ideally, the unit should include individuals from both inside and outside the company. Internal talent can bridge the gap between the CVC and the company’s business units. External talent, on the other hand, provides access to new networks and expertise.
Select an External Leader
To lead a CVC organisation successfully, companies should consider appointing an external leader. An outsider can bring valuable networks, technical expertise, and an unbiased perspective. They can provide a fresh outlook on the industry and foster connections that may not be readily available within the company. External leadership can also enhance the unit’s focus on innovation.
Establish Clear Objectives
Having a clear set of objectives is vital for the success of corporate venturing. Define the specific goals and expectations for the CVC unit to align with the overall corporate strategy. These objectives should be measurable and regularly evaluated to properly gauge the CVC’s performance and impact.
Foster a Collaborative Ecosystem
Successful corporate venturing is about building a collaborative ecosystem. Encourage partnerships and engagement with startups, industry experts, academia, and other key stakeholders. This ecosystem can provide valuable insights, innovative ideas, and potential growth opportunities. By fostering collaboration and open communication, the CVC unit can tap into a broader pool of resources and knowledge.
Invest at the Right Stage
Knowing when to invest in startups is a critical aspect of corporate venturing. Companies should strike a balance between being early adopters and avoiding undue risk. Careful timing and risk assessment are essential to maximise return on investment. Adapting to changing market conditions and trends is also crucial for making informed investment decisions.
Regularly Assess and Adapt
Corporate venturing is an ever-evolving landscape. Companies must continuously assess the performance of their CVC unit and be prepared to adapt and pivot when necessary. Regular evaluations should consider the unit’s impact on the parent company, its contribution to innovation, and its alignment with the corporate strategy. Being agile and open to adjustments allows the CVC unit to stay relevant and effective.
In conclusion, unlocking the potential of corporate venturing requires skillfully managing innovation, strategy, and collaboration. By structuring the CVC team effectively, establishing clear objectives, and regularly assessing and adapting to changing conditions, companies can navigate the challenges and reap the benefits of corporate venturing.
