Making all the difference in corporate venturing
Many organizations are hesitant to treat venture employees differently from their corporate colleagues, as treating people differently within the same organization might lead to enviousness. However, people are different in not only the talents they have, but also in what motivates them in conducting their jobs. This discussion is reflected in the academic literature as the equity versus equality debate. Working in a venture unit can be risky for a career, because failing within a venture unit might stick to a persona and make it difficult to pursue any further career within the organization afterwards. Similarly if you would like to stimulate entrepreneurship in the venture, you should provide the corresponding incentives.
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). These findings are published in our 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 these blogs, we will share these best practices with you.
Many corporate venture organizations struggle with this practice. Some of them simply decide not to use performance rewards or bonuses tied to goals because it doesn’t suit the parent organization, e.g. the venture organization of the health care insurer. One of our interviews with BAC BV, a spin out from Unilever, explained that using bonuses can help to keep the team members on board as the development of the venture sometimes takes up to seven years or even longer. Especially when their knowledge and experience is key for the process and continuity of the venture, it helps to tie bonuses to the final goal.
Apart from the rewarding structures, it is also important that venture managers who have led a failing venture, are not being punished but seen as entrepreneurial and passionate employees whom bring an extra dimension to the organization through the learnings of their failure. Or as Thomas Edison once put it: “I have not failed. I've just found 10,000 ways that won't work”.
Jessica van den Bosch and Geert Duysters
Tilburg, December 15th, 2014
Jessica van den Bosch is managing director of the Tilburg Center of Entrepreneurship at Tilburg University. Geert Duysters is Professor of Entrepreneurship & Innovation at Tilburg University and academic director of the Tilburg Center of Entrepreneurship. Both are fellows at the Corporate Entrepreneurship Research Center of Tilburg University, and together they wrote Corporate Venturing: Organizing for Innovation, to be published in September 2014 by Edward Elgar.