Venture Strategies:

Radical Project Management

In-Company Ventures

Managing Radical Innovation through Internal Ventures

By: Vadim Kotelnikov

Founder, Ten3 Business e-Coach Inspiration and Innovation Unlimited!

"Victory comes from having a capable commander and the government leaving him alone." ~ Sun Tzu

Business Synergies Approach To Project Management

 

The Jazz of Innovation: 11 Practice Tips

 

Loose-Tight Leadership

 

5 Critical Success Factors for New Ventures

By Peter Drucker

  • For in-company ventures in an established business, insulating the new venture from the main business...More

Radical Innovation Radical Project Management Radical Innovation Radical Innovation and Radical Project Management

 

 

 

 

 

Specific Skills of Radical Project Managers

  • Confronting uncertainties and reducing them

  • Dealing with the chaotic nature of the radical project management environment

  • Developing resource acquisition skills

  • Overcoming project discontinuities

  • Improvising and taking tactical detours

  • Preparing a project for acceptance by a manufacturing partner an existing or a new business unit, or a spin-off company... More

 

Why In-Company Ventures?

Today, in-company ventures, or internal start-ups, a new form of creating and financing a high-tech company are very popular. The growing need for radical innovation and  diversification, both related and unrelated, added another dimension of complexity to managing a large firm. This complexity is managed through the creation of "virtual" small companies within the large company. Corporate management focuses on the performance of these in-company ventures as wholes, while business unit management tends to everyday matters.3

New ventures established as independent companies, or spinouts, can more readily fulfill their potential. In this case, the entrepreneurs do not have to argue with superiors or put up with interference.

In contrast, the in-company venture enjoys the benefits of the company's greater resources, brand name and corporate image. Getting autonomy for a new in-company venture may help it operate more like an independent. But, Peter Drucker warns, established business is also "the main obstacle to entrepreneurship".

New Upper Management Approaches to Support In-Company Ventures

 

Many organizations,  willing to exploit the benefits of new product/service development as internal ventures, will need to change their mindset, redefine their concept of organization and loose controls in order to expand their capacity for speed. Mastering of the new business systems approach to managing projects aimed at development of innovative products and services will help corporations to move with speed to capitalize on emerging technology and market opportunities.

Corporations should broaden their tolerance to mistakes and encourage entrepreneurial approaches not only verbally, but by creating conditions by which you can be an entrepreneur. Top management should be ready to face the fundamental conflict between the mainstream organization and the radical innovation team, and manage the relationships between them. If the new business is significantly different from the parent company, you may need to break cultural ties that could get in the way.

Top management should also create an upside opportunity for people in order to retain key staffers who may wish to leave the corporation and form a startup on their own. Using vehicles as phantom stock and stock appreciation rights (SAR), in-company ventures can provide the feel and reward of a startup.

 Success Case  Corning

Corning, a Fortune 50 company, presents an excellent example of harnessing the benefits of the business systems approach to new product development. Managers of the company operate within a shared context that encompasses anticipation of future events that might have an impact on industry. The innovation process is the lifeblood of the corporation. It is a highly competitive process - not all projects get funded. New business creation is central to achieving strategic and financial objectives. It's project leadership, not control by top management, that makes the process work.

As a result of this Corning business building strategy, in 1998, 57% of the company's sales were from products less than five years old; in 2000, that portion had grown to 84% of sales... More

Project Leadership

Having a sound research, development, and innovation process is not enough. It's leadership that makes the process work. The key is to select project leaders on the basis of their cross-functional understanding of technology, marketing, and manufacturing, as well as their leadership skills and judgment. Organizations should also provide an enabling environment to empower the project leaders to act as a CEO and thus to contribute their best to the corporate strategy.

Entrepreneurial approach to project management that understands the dynamics of the marketplace and competition may require radical change in the project success measurement and control systems of most organizations. Business-oriented controls should focus on market performance, timing and investing for higher return rather than on meeting fixed specifications and constraints. They must resist the temptation to use operating-plan logic to manage new ventures.

 Success Case  GE Digital X-Ray Project

The Digital X-Ray technology development project at GE was about to die several times. This radical innovation initiative survived and finally prospered mainly due to entrepreneurial .skills of the project leader.. More

 

 Discover much more in the

FULL VERSION of e-Coach

7 Challenges in Managing Radical Innovation...

Fuzzy Frond End and Fuzzy Logic...

Keys to Effective Radical Innovation Project Management...

 Case in Point  Corning...

 Case in Point  3M...

 Case in Point  Quantum...

 

 

References:

  1. "High-tech Start Up", John L. Nesheim

  2. "Venture Catalyst", Donald L. Laurie

  3. "The Centerless Corporation", Bruce A.Pasternack and Albert. J. Viscio

  4. Radical Innovation, Harvard Business School

  5. "Every Business is a Growth Business", Ram Charan and Noel. M. Tichy

  6. Managing Radical Innovation, Vadim Kotelnikov

New-to-the-World Product Development

Radical Innovation

Radical Innovation vs. Incremental Innovation

Radical Project Management

Fuzzy Front End

Prototyping

The Fun Factor

Venture Strategies

Spin-Outs

Corporate Venture Investing

Case Studies

Corning

GE Digital X-Ray Project