ISSUES

TRADITIONAL MANAGEMENT

VENTURE MANAGEMENT

Used in

Lifestyle Corporations

High-Growth Ventures

Building Business Around

Competence-driven idea

Opportunities: customer-driven idea or a new technology

Market Focus

Serving established customers

Entering emerging market that has yet to be recognized and exploited

Results

Quite predictable

Quite unpredictable

Time-to-Market

Willingness to sacrifice speed for thoroughness

Speed is above all; must be first to market

Success Measure

Earnings

Market capitalization

Market Research

Analysis, review, methodical consideration of facts.

"Living the data", agility, experimentation, adaptation, and rapid response

Management Attitude

Dedicated to delivering an operating plan

Dedicated to identifying and adapting to unmet, unserved customer needs

Management Style

Thorough planning and plan implementation; incremental logic of strategic improvement

Driven by imagination and faith; chaotic; always ready to adapt rapidly and change

Core Competence

Performing core manager's functions

Ability to move quickly from idea to product to market

Independence

Responsibility and control

Anarchic, demands space for action

Risk Management

Reason, caution, predictability, avoiding failure at almost any cost

Experimenting, adapting, failing, and experimenting again

Change Management

Formal procedures

Turning 180 degrees at top speed, and resuming cruising speed

Motivation

Promotion

Risk-reward structure

Decision Making

Slower; corporate approval procedures to be followed

Faster; entrepreneur is the key decision maker

Funding Source

Annual plan

Venture capital

Financial Focus

Profit

Cash flow

 MINI-QUIZ:  Define which managerial approach - traditional or venture management - is more suitable for your organization

In today's innovation driven economy, many top managers act as though they want all their people to be entrepreneurs. However, a verbal statement only is not enough - corporate environment and conditions favoring creation of new ventures need to be established. To check how entrepreneur-friendly your corporate environment is, answer the following question.

If your established organizational procedures create a barrier to achieving your immediate objective, would you rather:

• sacrifice the objectives and do the things right, or

• sacrifice the procedures and do the right things?

Or, if your strategic objective cannot be achieved because of restrictive organizational procedures, would you revolutionary change the procedures or sacrifice the strategic objective? Or, try not to sacrifice anything and find a solution "outside the box" through outsourcing some critical functions?

Bibliography:

1. "Venture Catalyst", Donald L. Laurie

2. "Project Manager's MBA", Cohen E. Graham,

3. "High Tech Start Up", John L. Nesheim