The goal of these spinout ventures is to nurture and capitalize on trends that show promise but haven’t yet hit their stride. Your spinouts in horizon three are the most futuristic. This is where your business has the potential to create something completely new, take advantage of disruptive opportunities, and transform entire industries.
Instill a Culture of Innovation
Innovation should be considered a critical part of the business development process — and corporate venture building an important addition to the business innovation strategy.
Your entire company — from top to bottom — must embody a culture of innovation that supports and encourages the creation of startups. This is not the kind of culture change that can be forced on your team, especially if innovation was not built into the culture from the start. And making such a cultural shift won’t happen overnight; instead, you should expect it to be a gradual process that gets stronger with time.
Education can play a significant role in smoothing the transition. The more you inform your team members and include them in your decision-making process, the better your outcomes will be. Across the entire company, strive to develop a shared understanding of what innovation is and why it is important to the organization.
Use your investment thesis to explain the value of launching spinouts and describe your plans in detail. Also, make sure employees understand the benefits they could personally reap from launching successful spinouts.
A culture of innovation must begin at the top. The CEO, executives, and managers all need to buy in and lead by example. They should serve as cultivators of innovation who look both internally and externally for inspiration. Talk to employees and engage them in the ideation process. They will likely be the biggest source of ideas for emerging opportunities, and including them will also help quell any fear or uncertainty they feel about this cultural shift.
Optimize Your Organizational Structure
Most organizations are not properly structured to support innovation. Instead, they are structured for operational excellence — which, unfortunately, sometimes means they hinder innovation.
Innovation needs room to grow and thrive. Your corporate spinouts and their teams need to live outside of the organization as separate entities. As such, the new organizations need to be free from the governance of the larger parent organization and have the freedom to experiment — just like any other startup.
It is also important to ensure you are assigning the right people to this task. As you instill your culture of innovation, it will become apparent which employees are most enthusiastic about the project and want to be included. From there, as spinouts launch, you can offer your best and brightest workers the opportunity to run each venture. Your most ambitious employees will likely appreciate a chance to become the founder or CEO of a startup and to get a good chunk of equity in the organization.
When it comes to launching successful spinout ventures, you greatly increase your risk of failure if you don’t lay a solid groundwork ahead of time. Without a clear investment thesis, a model for growth, executive support, and a culture of innovation, you’re essentially trying to build skyscrapers on top of a weak foundation.
Make innovation one of your chief organizational priorities. Give it the staffing, funding, and visibility it deserves. Your innovation group isn’t just a playpen set off to the side of your main business; it’s a key driver of your success and longevity. In fact, it could hold the ticket to your most profitable wins and determine the direction of your organization’s future.
Along the way, celebrate your successes and learn from your failures. There’s no guarantee that your organization will launch a unicorn, but there is a guarantee of learning, development, engagement, and growth — both to individuals and the enterprise as a whole.
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