Why corporate ventures fail - part 1 (of many)

When companies try to generate new revenue streams in the form of ventures, there are a number of serious issues that experience shows can limit their success.

Getting and retaining the right team members for the new venture can be tricky as:

• Rewards are not as high as in a ‘real’ start-up and so it can be difficult to attract appropriate, high-calibre, team members from outside the organisation;
• Group managers can be reluctant to ‘lose’ their best people to an internal venture;
• Individuals can be reluctant to leave their chosen career path in the company for the riskier path of a venture – particularly when there is not guarantee of being able to re-join the main company if things go badly;
• Managers are frequently not motivated to support a venture that does not form part of their metrics;
• Key functions in the company are left to internal departments rather than hiring dedicated people – leading to delays in responses and potential missing of important issues through lack of focus.

Failure to address these issues has terminally hampered a number of corporate ventures.

Copyright Richard A D Jones 2005