BARCELONA, Spain--(BUSINESS WIRE)--IESE Business School in collaboration with consultancy firm BeRepublic released today a new study on how companies can best maximise the impact from corporate venturing – the increasingly popular practice of large firms collaborating with start-ups in an effort to increase innovation.
The study Open Innovation: Balancing the autonomy and impact of your corporate venturing unit, is based on over 120 interviews with chief innovation officers and those in related roles in the United States, Europe and Asia - and from companies such as BMW, Disney, Orange and Samsung. It sheds light on how companies can not only maximize the innovation produced by their CV units, but also the value they generate for the parent company.
Mª Julia Prats, Professor of Entrepreneurship at IESE Business School and co-author of the study says: “Innovation for innovation´s sake is not enough. This study provides a practical framework for how firms can maximize the effectiveness of their cv units – not only in terms of the type of innovation generated, but also the extent to which a mind-set favorable to innovation has been enhanced in the parent company, and whether the innovations have been adopted by the firm.”
According to the study´s authors, to maximize effectiveness it is crucial to balance the amount of structural autonomy that CV units have from the parent company. But getting the right mix of autonomy, control and integration between a firm and its CV units is an ongoing challenge. To do so, they identified a framework of variables that each company should consider, grouped into four main areas:
- Leadership: To what degree does the executive committee participate in the unit's decision-making, and how much time elapses between reporting cycles?
- Distance: How far is the unit from headquarters? This considers both physical and legal distance.
- Budget: How dependent is the cost center on headquarters? How much is required for them to break even?
- Incentives: How is the unit director evaluated and compensated?
The study found that the keys to success were:
- Designing an incentive framework that is focused on value integration as well as agility. This helps companies focus on the value generated by corporate venturing, instead of innovating for innovation´s sake.
- Ensuring an independent cost center for the CV unit
- Considering a longer time span between reporting cycles
- Choosing the physical location of units according to the degree of internal autonomy that can be given to the unit and to the level of internal capability for integrating external innovation into the company.
Open Innovation: Balancing the autonomy and impact of your corporate venturing unit is authored by professor Mª Julia Prats and Josemaria Siota of IESE Business School and Isabel Martínez-Monche and Yair Martínez of BeRepublic. It is the latest in a series of studies from IESE Business School, one of the world´s top business schools, that provides practical, research backed guides for how large firms can best approach corporate venturing. The next study in the series will be released during MWC Barcelona and the 4YFN conference, where IESE is organizing a number of sessions on corporate venturing and innovation. For more view: https://mediaroom.iese.edu/iese-business-school-to-take-part-in-mwc-barcelona/
To view the complete study, please go to: https://www.ieseinsight.com/doc.aspx?id=2167&ar=16&idi=2
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About IESE Business School
The 2018-2019 academic year marks the 60-year anniversary of IESE Business School, which is the graduate business school of the University of Navarra. Founded in 1958, the school is one of the world’s most international business schools, with campuses in Barcelona, Madrid, Munich, New York and São Paulo. Consistently ranked within the top ten worldwide, IESE Business School has pioneered business education in Europe since its founding. For sixty years, IESE has sought to develop business leaders with solid business skills, a global mind-set and a desire to make a positive impact on society. The school distinguishes itself in its general-management approach, extensive use of the case method, international outreach, and emphasis on placing people at the heart of managerial decision-making. In the last four years, IESE has positioned itself as number 1 in the world for Executive Education programs, according to the Financial Times ranking. www.iese.edu