Benefiting from Partnerships
In today’s society, organizations can no longer survive without partnerships. Companies simply do not have all the resources available to deal with the compound aspects of business life. At the same time, they are under continuous pressure to work “lean” and cost efficiently in order to keep their products or services available at attractive market prices. Co-creation with customers, suppliers, and external parties can play an important role in reducing costs, attracting complementary resources (e.g., technological know-how, sales and distribution channels, etc.), and creating joint purchasing power. Corporate venturing, too, increasingly revolves around partnering with both internal parties (e.g., business units within parent) and external partners (e.g., through joint venturing or contractual agreements).
Over the past two years, we researched how eight large corporations organized their venture activities, with the participation of CbusineZ (health Insurance), Akzo Nobel, Unilever, Document Services Valley, Eindhoven University of Technology, Sanoma, Rabobank, and NRC (newspaper). Our findings are published in a new book called Corporate Venturing: Organizing for Innovation, which describes the actual venturing experience of these firms. It provides interesting insight into the pitfalls and successes of corporate venturing, captured in ten best practices. In our blogs, we will share these best practices with you.
There are many advantages to working in partnerships. The sharing of resources leads to new insights, additional market access, more knowledge, increased funds, greater creativity, etcetera. However, it requires certain conditions to succeed: goals need to be aligned, and both parties must benefit from the partnership. Realizing these conditions therefore requires people with certain skills. They must be flexible enough to work in environments where company structures are not yet in place and able to communicate to people at all levels of the organization (top management, as well as operational unit managers). They must be entrepreneurial and have great networking skills. And, like Apple’s CEO Tim Cook once said, “they have to be wicked smart”. All in all, for large corporations, these kinds of employees are often the five-legged sheep they’re looking for.
One of the venture managers of CbusineZ explained that they are sometimes seen by colleagues from the parent company as “cowboys.” She considered that a compliment: proud to be different. But in the operational partnerships she has with the business units at the parent company, she focusses on aligning her goals with theirs. She has created a huge and relevant internal network of colleagues she can call upon if needed and communicates clearly about her aims to them. Being seen as a “cowgirl” helped her realize that people working at the parent company do not view venturing as day-to-day business, but rather a special kind of job that requires different skills.
Jessica van den Bosch
Tilburg, September 29th, 2014
Jessica van den Bosch is managing director of the Tilburg Center of Entrepreneurship at Tilburg University and a fellow at the Corporate Entrepreneurship Research Center of Tilburg University. Together with Geert Duysters, she wrote Corporate Venturing: Organizing for Innovation, published in September 2014 by Edward Elgar.