Five Roles You Need To Make Your Corporate Venturing Program A Success
Many organizations are falling behind the rapidly changing customer, market and technology landscape.
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This article was co-written with Omar Mohout.
We probably don't have to convince anyone that the world is changing faster than ever. That technology is evolving exponentially, and that consumer behavior and economic markets are radically changing as a result. We're clearly up for a challenge in our companies.
Many organizations are falling behind the rapidly changing customer, market and technology landscape. As a result, their business models are being challenged by the new players on the block. To prevail in this new world, you need a faster clock speed than the market. Unfortunately, most companies are behind the curve. And we all know it won't slow down from here; on the contrary, it will continue to accelerate.
Having the opportunity of working with a lot of different organizations, I believe that corporate venturing can help you to move faster, together. A brilliant misquote of Mark Twain, "The reports of my death are greatly exaggerated," describes to a tee the state of larger companies and corporations today. Corporations and small- and medium-sized businesses (SMBs) are in the best possible position to leverage their brand, talent, resources, network and scale to defend and even grow market share. However, corporate venturing is already happening in many companies and industries, but not necessarily in the right way.
Let's first begin with defining corporate venturing. It is about setting up structural collaborations with external ventures/ parties to drive mutual growth. The problem arises when corporates think startups are evil, and vice-versa. Everything depends on the clear intent and expectations of both parties. Your corporate venturing program requires some of the brightest people in your organization. You will find people with broad backgrounds and skillsets to be suitable for the roles you need. You need to form a "coalition of the willing," people who are 200% committed, and have a passion to set up collaborations.
To address your first concern, you don't need a completely new team to run this program. We're defining roles here, some of which will be performed by multiple people, while others are done by the same person depending on their skillset. You will likely get the best results when people can focus on one role, but this is not feasible for all organizations. Try to find the best with the people that you have.
Here are the five roles we defined as crucial to making your corporate venturing program a success.
1. Fleet manager The fleet manager is the primary responsible for your corporate venturing activities. This person is deeply involved in the overall corporate strategy, and helps direct it based on their experience and learnings from turning the mothership into a fleet. This person needs to both understand the framework of the corporate world, and the radical new approaches that startups employ. Ideally, this person has experience with both, but if you can't find someone like that, then pick the startup side over the corporate side. It is easier to learn how to function in a corporate, since they move slower and often in more structured ways, than it is to execute on the startup side.
The fleet manager's main responsibility is to ensure the program gives the maximum possible ROI for all parties involved. This is not just about short-term financials, but growth in all areas. He or she needs to ensure that when a new venture becomes part of the family, there is a plan ready to help them add and receive the maximum amount of value. This plan will be created together with the "connectors"- more on that in a moment. Other responsibilities of the fleet manager are reporting to the corporate management, proposing new ventures, negotiation with new ventures and setting targets. The fleet manager is connecting the dots between the speedboats and the mothership.
2. Mentors Mentors are a key to success. They guide the ventures in their strategic decisions and daily operations. Like the fleet manager, mentors must understand how to execute like a startup. You may find some of these people inside your organization, but it is more likely that you will need to find external mentors in startups and scaleups. The mentor role is intentionally loosely defined, because there are no perfect solutions. Mentorship requires chemistry and a genuine interest in what the venture is trying to accomplish. Simply paying some tech guru to help your venture won't get you the kind of results you're hoping for. Ideally, a venture will have multiple internal and external mentors to guide them.
We would advise against setting this up through structural meetings. Instead, let the connection grow organically and see what kind of setup they prefer. If either party is unhappy with the relationship, there are no strings attached to find other mentors. Different stages and challenges for the ventures will require different types of expertise anyways. Avoid focusing only on the big "known" names in the industry who will attract startups, but also try to bring in hands-on experts as mentors that can really deliver detailed expertise.
3. Connectors While mentors help the ventures deal with obstacles and opportunities, connectors help create those opportunities. These roles can be performed by the same people, if the mentor shows a deeper involvement on both the corporate and venture side. Connectors need to be able to identify, judge and create valuable connections between the ventures and internal or external parties.
Together with the fleet manager, the connectors will create a plan to do this in a structural way. When a new venture joins, you're at a make-or-break moment and many corporates get this wrong. They often acquire a venture, and then start thinking afterwards about what they can do to create a valuable and mutuallybeneficial relationship.
We urge you to come up with a plan for this beforehand, along with ownership and accountability. The connectors create this plan together with the fleet manager, so that all ventures are supported in a structural way. The plan can consist of simple steps like:
- Onboarding process in the assets the corporate provides.
- Contact details of go-to people inside the corporate for things like distribution or event organization.
- Pitch events to introduce the venture to the organization.
- Invitations for upcoming company events.
- Encouraging employees with similar ideas to approach the new ventures.
4. Scouts Your scouts are the people responsible for finding interesting ventures to invest in or to collaborate with. You can compare this role to sports scouts that spot and track young or undiscovered talents. Observant people with a passion for networking are perfect for this role. You will find people like these across different departments in your organization and probably primarily in business development. The more people that can help you spot opportunities, the better; as long as they have the strategic insight to spot the kind of ventures which is the vision of the program. They also shouldn't be afraid to bring up radically new ideas.
Scouts can use platforms such as ProductHunt and AngelList to find opportunities, but they should primarily be out in the field as often as possible. Scouts report their findings to the fleet manager, who can then move in to negotiate and potentially set up the collaboration.
5. Evangelists Do not only rely on scouting opportunities; you will need evangelists to "signal" the market. They will spread the word on what you're trying to accomplish with your corporate venturing program. While your fleet manager has the right vision for this, chances are they may have their hands full running the program and won't always be available for this. Your evangelists spread the story, both online and offline, to put you in the market and claim your corporate venturing position. This may invite the right parties to collaborate with and add value to the program.
So, going to events, speaking at the right conferences, communicating about the outcome of collaborations, etc. are of vital importance to attract the right parties. Evangelists need to be advocates, ambassadors, and great storytellers. Some of your most outspoken scouts will be evangelists, but there is a difference between networking and seeing opportunities, and marketing a story across different channels. The team described above should connect optimally with people in the business units (which can be innovation/ digital/startup leads for the units), and each party needs a clear role.
The best approach to set up successful corporate venturing is matching people in the field (drivers), who know the needs of the customers with a central unit (enablers) for coherence and inspiration. The end goal of your corporate venturing program is to generate impact on your organization on many different levels- business, innovation, culture, etc. This implies that it's important to infuse the collaborations within the business as much as possible, to avoid it becoming a separate unit acting as a black box.
THE FIVE C'S OF CORPORATE VENTURING
WHAT YOU NEED TO SET UP A CORPORATE VENTURING FRAMEWORK IN YOUR COMPANY
1. COALITION Selecting the right team and competences is of crucial importance to make your corporate venturing activities successful. What type of roles do you need to put in place?
2. CONFIGURATION Corporate venturing comes in many forms and it's important to choose the right configuration for your company and maturity in collaboration with ventures. Where to start?
3. COMMUNICATION How are you going to signal the market about your activities and collaborations, and what channels are you going to set up to enable that?
4. CODE OF CONDUCT Defining the partnership and behavior of both parties involved in the very beginning of the collaboration can avoid difficult situations later on. What do you need to take into account?
5. CULTIVATION Evaluating the collaboration from both sides is needed to continuously learn & adapt to meet each other's expectations. What are the right KPIs?
This is an edited excerpt from the book Corporate Venturing: Accelerating Growth Through Collaboration with Startups by Dado Van Peteghem and Omar Mohout. The book is now available to buy from: www.corporateventuring.co