Scaling up Corporate Ventures

By some measures large corporates are investing in R&D (aka innovation) at the fastest pace in 50 years (source: Bloomberg Business June 2015). And many of these firms are now shifting investment allocation from core, sustaining innovation to adjacent and transformative initiatives in search of seizing a larger share of new revenue streams (source: Strategy&/Booz & Co. analysis).

It’s all part of the “disrupt or be disrupted” meme.

One would think this means very good news for the capability of these corporates to execute on “beyond the core” innovation, which usually comes in the form of venture-type projects or initiatives sometimes in partnership with external start-ups.

Imaginatik, world leader in unleashing innovation at large global organizations, from experience thinks we should all take a closer look. At least two myths define the current start-up to scale-up dialogue involving large Corporates:

Myth #1: Large corporates don’t know how to start new stuff, but they are good at scaling new stuff.

Myth #2: Scaling new stuff is pretty much like growing any existing business line at a large corporate.

Harboring these beliefs, many corporates experience wide-spread frustration in their ability to deliver ventures with $10-50 million in revenue in reasonable time-scales, meaning, sufficient scale to move the dial of executive interest.

Our experience based on working with over 400 global organizations is that corporates have made decisive progress in ideation and business/venture planning, but that the execution side – the scaling-up phases – needs fresh tools to improve intrapreneurship performance.

It all rather makes sense. From Lean Start-up and Business Model Canvas to Start-up bootcamps, clearly the focus is on getting started, on bring an idea to market. No small feat. However, all entrepreneurs know the hard work begins after the initial investment rounds, after initial users validate early thinking, after initial traction is achieved.

Yet so little has been written or said on Scaling, on the Scale-Up imperative.

Which is why Imaginatik has developed the “Scale-Up Grid” system, the first-ever attempt to systematize the scaling of corporate ventures within large Corporates. For intrapreneurs, by entrpreneurs and intrapreneurs, in service of impactful ventures inside large corporations, the “Scale-Up Grid” provides a useful, easy to use system to improve the scale-up success of any venture.

 

What You Need To Know

Here’s our conclusion: in many ways it’s harder to scale a venture “inside” a large corporate than it is to scale a start-up in external markets, possibly way harder. Why? Because the corporate scale-up must address all of the usual start-up growth requirements plus these stealth inhibitors (a partial list):

• Size of Prize: Corporate scale-ups must demonstrate or credibly promise sizable results, measured in millions, to secure and sustain corporate sponsorship. Starting up small is required but insufficient.

• Top of Mind: Corporate scale-ups constantly compete for resources, alignment, prioritization and political clout in a shifting environment. Every organization has finite capacity to scale ventures. Staying a priority is quite challenging.

• Asset Leverage: The best Corporate scale-ups bestow “asset leverage” or velocity on one or more business units, engendering their backing, support and resources. It’s all about timing, with a good dose of luck.

• Borrowed Leadership & Resources: unlike a stand-alone, independently funded start-up, the Corporate scale-up rarely benefits from dedicated, 100% time leadership, with most resources being shared or borrowed. Performance can be diminished by this human capital reality.

• Frequent Disruptive Performance Measurement: like it or not, the corporate performance yardstick is often one year, the fiscal year, and revenue is the limited measure of value when in fact the scale-up may generate numerous benefit streams measured in other, non-cash currencies (e.g., sustainability, career enhancement and morale, brand, and asset leverage just to name a few).

Accordingly, any effort to systematize corporate scale-ups must not only anticipate these inhibitors but also provide practical tips, tactics and templates to circumnavigate them. We think we have done that

First our dual mission: to (i) democratize Scaling-Up to hundreds of teams or projects versus just the select few ventures that attract or snag the top talent, and (ii) to provide the proper tools to help scale-up ventures realize their maximum scale in credible, reasonable time-scales.

Now let’s tell you how.

 

How The “Scale-Up Grid” Works

An intrapreneurs’ toolbox for corporate scale-ups. That’s what we seek to deliver. Conceptually, think about it along the lines of three interconnected tools, namely, a heuristic Scale-Up Grid that points you to promising areas of discovery or consideration, an associated set of questions per scale-up topic or theme, and a library of helpful resources (tools and templates) for you and your team:

image1

Most of the time “start-ups” seeking to scale in the external world share one goal: to achieve higher revenue as fast as possible by capturing and keeping customers. The purpose is economic, measured in dollars or other fiscal currency.

Because corporate scale-ups come in many colors and flavors, a one-size-fits-all approach would be inadequate or misleading. Our “Scale-Up Grid” lights up different Grid panels (there are 20 in all) for priority based on the nature of the innovation project (we call this the Venture Filter), such as:

• Emerging technology or a productivity/efficiency focus
• User/customer base is internal or external
• Focus is product, service, business model or concept
• Regulated or unregulated markets
• And so forth.

You may wish to heed our suggested prioritization, or dive into all 20 Grid tiles to ensure you and your team has exhausted all considerations for success. It’s really up to you. Depending on experience and venture maturity, your thoroughness will vary.

image2

For instance, in this example shown below, a B2B manufacturer operating in a regulated industry seeks to scale a venture for internal corporate users. Note which panels are colored in orange as Required, those as Recommended, and which one as Optional. A different coloring scheme would have materialized when the venture operated in unregulated markets and customers were external to the corporation. You can imagine the possible permutations.

Then, tap the recommended colored Tile (for instance, C1.2 within the Legal swimlane) to access associated questions that are intended to focus you and your team on the most important considerations.

You, the intrapreneur, make the ultimate decision about which questions to consider and how they impact your planning, work and actions. You decide how thoroughly to integrate recommended tips, templates and tools into your thinking and work. What the Scale-Up Grid system helps you know at all times is your progress only in terms of which Tiles (top level view) you have visited, and then what proportion of recommended questions you have decided to consider in your planning and actions.

image4

This example above is just shown as an illustration because we’re still working through concepts for the most helpful Indicators, but you get the idea.

The key point is to empower all intrapreneurs to leverage the world’s best advice and lessons on scaling up corporate ventures, so that your very first attempt has an improved opportunity to realize its maximum potential.

 

Calling All “Scale-Up Grid” Beta Testers

At Imaginatik we are aware of widespread intrapreneur demand for tools to support scale-up activities. We’re determined to answer that calling.

You can make a big difference. As an intrapreneur at a large corporate, we’d like to engage you in our 90 day Beta-program to test drive the “Scale-Up Grid” on 1-2 cool projects at your enterprise.

It’s pretty simple. We will ask you to enroll, you test out the system for 30-45 days with some guidance from one of our sensei, and your feedback helps us improve the real thing for “community commons” launch in 2016.

What you get for all of this?

• First tester advantage
• Fame in 2016 when we brag about your help
• Better scale-ups, faster than others
• Great feelings all over

To enroll, send us an email to [email protected] and we’ll be back to you within 24 hours to discuss your test ride.


Lusi SolisThis is a guest post by Luis F. Solis, Chief Innovation Evangelist at Imaginatik plc. Luis hosts a workshop on this exact topic, “Scale Up to Deliver on the Ventures Promise”, during the Intrapreneurship Conference New York.