Corporate Venturing Lead
Your corporation can be agile too
Uncertainty and risk is nothing new in business, but dealing with it in our rapidly-changing world can be a challenge - especially for corporations. Are you adapting to the market or shaping it? Do you find experimentation as an investment or something you’d rather avoid?
In order to take an active role in shaping the future, large organizations need to free themselves from the shackles of legacy and habit - they can and should be strategically agile.
Risk should be managed, not minimized
There’s no progress without learning, and risks offer a great source of renewal. Mastering change requires a bold and nimble approach: a culture of trial and error where one eats failure for breakfast. A culture in which risk is not minimized but rather actively managed.
“If you are in a similar role (as I am) and you are not taking any risks you should probably be fired,” says Ossi Laukkanen, Digital Director, Mehiläinen on Avanto’s podcast Hyvät häiriköt (in Finnish).
Shaping the market means companies have to view the world beyond their own organization, outside of their own bubble. Collaboration with external sources like startups allows corporations to move faster, lowering their risk and incurring less cost to their core business.
But how do we build an organization that is capable of actively managing risks? In a lot of ways. An easy first step corporations can take is to leverage the benefits of external collaboration.
Venture Client: The lightest form of collaboration comes through mapping market potential without any obligations. Here, potential innovations and partners are involved in a pilot or regular purchasing of a solution or services. This allows the corporation to work on their agility in work and collaboration while still developing their business. Meanwhile, the startup gets a paying customer and / or crucial product validation.
Innovation Lab: This happens when a business opportunity is close to the corporation’s core business or the goal is to identify new ones. Think of an Innovation Lab as a forum for ideas, free from short-term business goals. The ability to think freely is a basic necessity in an innovative organization.
Partnership: The first step on the road to a deeper form of collaboration, such as direct investments or acquisition. This is generally recommended before making an investment decision. A partnership is also a great solution when there is no strategic need for an investment but there are great synergies to be found.
Incubating and Accelerating: Allows a close relationship between the corporation and startup, enabling the startup to utilize the internal capabilities, infrastructure and resources of the funding company. On the flipside, it benefits corporations via increased deal flow in business models and technologies. Importantly for the startup, they get support in scaling and developing their business.
Investing: Facilitates corporations in connecting with the right skills and capabilities, sometimes in the form of acqui-hiring. Startups can maintain their autonomy and agility while enjoying corporate-backed resources.
Merger & Acquisition: When it’s strategically critical for the corporation to own a market and move fast. The new opportunity may bear little relation to the current business model of the corporations.
Start small with light investments
The first three steps require the least amount of resources, whereas investment or M&A moves require stronger commitment. Just like in life, it’s about risk and reward – riskier plays also have the greatest potential to make a difference in the long term.
If you are looking for an easy way to get started, invite an interesting growth company for a visit. The most mature organizations build a dedicated venturing unit with a structure that runs all of these activities on a continuous basis.
The future belongs to companies who are bold enough to turn threats into opportunities while being nimble enough to do it fast. They’re constantly looking for ways to shake things up and reinvent their business - because if they don’t do it themselves, someone else will take over. Ultimately, the riskiest thing you can do is play it safe.