Question

Managing the Internal Corporate Venturing Process: Some Recommendations for Practice describes internal corporate venturing (ICV) as an important avenue for corporate growth and diversification that is difficult to manage. This describes major problems in the ICV process at three levels of management: group or venture leader, division management, and corporate management. Major problems of core processes fall into two arenas, definition and impetus. Recommendations are given for responsibilities of personnel in the effort to manage core process problems.

QUESTIONS

Regarding the ICV process, what is the vicious circle between the three levels of management in the definition process?

How can a New Venture Division be used more effectively?

Regarding ICV, what are problematic aspects of the core processes at each management level? Describe each of the six individually.

For the six core processes, which do you believe will be both easy to implement and effective? Explain your reasoning.

For the six core processes, which do you believe will be the most effective but difficult to implement? Explain your reasoning.

Answer 1

Regarding the ICV process, what is the vicious circle between the three levels of management in the definition process?

The vicious circle between the three levels exist because at the Group Leader Level where the project initiators exist they cannot convincingly demonstrate in advance that whatever resources are procured will be used effectively. In the second level where the R&D happens, they are interested in the slow exploratory process rather than the fast moving areas of new development. At the corporate level the top management lacks the capacity to assess the merits of new proposals.

How can a New Venture Division be used more effectively?

A New Venture Division (NVD) can be used more effectively if it is used with much more deliberation. Corporate management must work towards creating flexibility in structuring the relation between new venture projects and the corporation. In some instances, efforts need to be made to integrate new venture projects directly in to mainstream businesses. Such a practice would be better rather than new ventures being transferred to NVD due to lack of support from the operating division where they originate. Also, top management should accept that there will be differences between the management process, NVD and mainstream businesses. Proper personnel and policy management coupled with flexible practices will help in tackling these differences.

Regarding ICV, what are problematic aspects of the core processes at each management level? Describe each of the six individually.

The core processes at the Group Leader level are technical and need linking and strategic forcing. In case of technical and need linking the issue is that the need has to be identified and the technical team had to support it. However, it was found that the technical team could not meet the needs of the market at all times. Secondly, at the first level strategic force had to be used. In other words, bootlegging and scavenging tactics had to be used to push the new idea to the higher levels which was not a very good and effective way to champion a new venture.

At the second level the two core processes are coaching and stewardship and strategic building. At the second level which is the R&D level people were so comfortable with the slow exploratory process that the new fast moving idea process was not acceptable to them. More so, in their quest for giving importance to growth they neglected coaching the group leaders so that they could come up with better ideas or prepare the ideas in a way that could be easily accepted by the higher levels. Second process was strategic building which also has problematic aspects as for strategy building one has to be open and alive to all scenarios. However, as they are so focused on their set methods that they cannot see the opportunities which can help them in their growth.

At the third level the two core processes are monitoring and authorizing. The problem with monitoring is that the corporate management is accustomed to a set framework so when a different idea comes along they cannot process it properly and hence they cannot monitor it also. Similarly, as they are not sure about the monitoring they are not comfortable in authorizing the same.

For the six core processes, which do you believe will be both easy to implement and effective? Explain your reasoning.

At the top level both processes monitoring and authorizing will be easy to implement and effective. As the order will come from the top it will be easy to implement and as the order is from the top all other levels will make sure to make adjustments to their processes so that the order of the top level can be followed effectively.

For the six core processes, which do you believe will be the most effective but difficult to implement? Explain your reasoning.

Coaching is an effective process but difficult to implement for the simple reason that it is time consuming and the giver as well as the receiver of the coaching should be at the same wavelength. If that does not match then implementation becomes difficult.