Corporate Venture Building: origin

Corporate Venture Building (CVB) results from a strategy to develop new growth and profitable platforms, ensuring a company’s perenniality.

The lever: creating ambitious Startups around the Corporate's core business with a view to making them a Tit@n.

The trend: CVB is on the rise in the last 2 years (Mc Kinsey): “100% growth in ExCom willingness to develop this capability”.

CONTEXT Agile Innovation is not anymore a “why?” question, but a “how?”

Corporates traditional Innovation Toolkit (R&D, collaboration with Startups...) proved its efficiency to constantly improve their core business.

But, they are attacked which creates the need for an "Engine #2" (Bain & Co)

  • Sectors frontiers are blurred (ex. Google operating in advertising, media, payment and soon health; Amazon entering Netflix game field….)

  • Value chains are easier to penetrate by small new intrants (ex. neobanks capturing clients relationships ‘just’ with a better user experience; SeLoger in real estate….)

  • New business models emerge on traditional sectors (ex. Uber vs G7 Taxi; office real estate vs WeWork; Accor vs ABnB; Sncf vs Blablacar…).

These evolutions are due to (clients) experience demands and Agile Innovation which is symbolized by Startups (even if less than 0,1% really become Tit@ns). Democratization of IT (cloud, nocode…) and go to market (social network, seo…) indeed generates a myriad of micro David dreaming of getting a piece of Goliath’s cake (if not taking it all).

Therefore, given Agile Innovation impacts and pace of deployment, the question that Corporates are facing is not anymore “why should we do it?” but “how can we deliver results?”.

CHALLENGE If digital eats the world, culture eats digital

But “Agility” is not a perfect bride for Corporates: long term plan, short term profit, rigorous processes, no risk culture, politic...

To deploy established activities or incremental innovations, the Corporates’ operating model is a strength.

However, when it comes to think out of the box, iterate (testing, failing, learning, retesting), launch "we-never-did-it-that-way" models…. it is too big a weakness.

After trying several approaches with can-do-(much)-better results, a rising trend is to complete the core business operating model, with one dedicated to build agile innovative value propositions.

This is somehow the origin of the Corporate Venture Building.