Startup entrepreneurs and corporate venture builders, what I call corporate explorers, have a lot in common. Also, they are fundamentally different. By understanding these two points, companies can better identify potential innovation leaders and have the opportunity to create new value before the company takes them outside the company.
Entrepreneurs are like the archetype of modern-day heroes. Entrepreneurs are willing to take personal risks to pursue ambitious and sometimes outlandish ideas. Figures like Elon Musk, Mark Zuckerberg, and Jeff Bezos offer the incentive of extraordinary wealth and global influence.
Corporate innovators lead less glamorous lives. Even the idea of a corporate venture builder is pretty ridiculous to some people. They reason that large, slow organizations led by people obsessed with preserving earnings per share and the value of personal retirement plans cannot move fast enough to seize new opportunities. .
But as we’ve discussed elsewhere, there are countless examples of leaders of existing companies launching new ventures and achieving breakthrough results. Jim Peck founded a multibillion-dollar big data analytics division within LexisNexis. LexisNexis at that time was a division of a large company with a history of 30 years. UNIQA Insurance is his 200-year-old company based in Vienna that is building multiple new businesses from digital insurance to healthcare. Analog Devices’ Venu Gopinathan just received FDA approval for an amazing innovation that can give people advance warning of congestive heart failure. Best Buy Health’s Deborah DiSanzo has built a new division that applies her well-known retail assets to the problem of enabling patients to receive care in their own homes through remote diagnostics.
Corporate explorers are just as real as entrepreneurs. But we face the challenge of how to identify and develop new ideas within large, complex organizations with many managers seeking funding and attention for them. . This got me thinking about what are the characteristics that differentiate successful corporate explorers from failures? Of course, it doesn’t make or break in itself, but it makes a big difference in the outcome.
in creator code, Amy Wilkinson describes six characteristics of successful entrepreneurs. I took Amy’s explanation and created my own set of five traits that she claims apply to both types of venture builders. Then, before and after publishing her first book in 2022, she added three traits that emerged from her five years of research on corporate explorers:
It’s not a perfect predictive model. Not all successful corporate explorers have all eight of his attributes. However, it appears to have good explanatory power and may help better identify leaders who can participate in venture-building roles.
Five traits that successful startup and corporate venture leaders have in common.
• A restless explorer in search of new things – Attracted to the future, finding new things and changing things for the better. Dutch psychologist Peter Robertson links the innate desire for exploration to human evolution. Some of us exhibit characteristics of widespread hunters in search of food, he says, while others prefer to create stability and structure within social systems. Although both traits are necessary, this growth orientation is defined for entrepreneurs and enterprise explorers alike.
• Curiosity to solve problems – Amy Wilkinson explains how entrepreneurs are passionate about “closing the gap” for their customers. They notice that something in the world isn’t working right and are motivated to build a solution. When Christian Tapaninaho moved to London, he was frustrated by his inability to make pizza over an open fire, as he had done in his native Finland. From this came the amazing success of the home pizza oven Ooni. You only notice these gaps if you are interested in the world and the frustrations your customers experience.
• open to learning what you don’t know – Sataya Nadella’s famous reinvention of the once-famously arrogant Microsoft culture had at its core a shift from a “know-it-all” company to a “learn-it-all” company . Explorers and entrepreneurs test and learn deeply held assumptions and are not afraid to change direction along the way. Great people stick to the problem they’re trying to solve, not their ideas. They iterate their solution to the problem, adding or removing features as they learn more about what customers value and how they want to use a particular product or service.
• Courage to commit in the face of uncertainty – Entrepreneurs are famous for their willingness to take personal risks to take ideas from concept to reality. Adam Singolda, founder of a multibillion-dollar recommendation engine software company, spent the first seven years of his life starting and running the company from the bedroom of his childhood home. , he said. Explorers usually retain the trappings of corporate life. This includes an office, an expense account, and possibly a personal assistant. But they start with more to lose. They are gambling their career advancement in the uncertain hope that their venture will succeed. It takes courage.
• size of ambition – Many CEOs refer to project exploration as “moonshots.” What this means is that this project has big ambitions. This is not an incremental addition to our current business, but a step into new territory, and we want to make the most of the opportunity to expand. For entrepreneurs, it’s much easier to make this claim. Venture capital firms like to invest in companies that see opportunity and have ambition. Business owners often believe that ideas are more likely to receive investment if they are less ambitious. This creates a disagreement with CEOs who want ambition and don’t want to play it safe and miss out on opportunities.
My first company explorer was Carol Kobach, leader of IBM’s Life Sciences Emerging Business Unit. Carol shared a vision for the unit that makes its work feel like a personal quest to create a computing environment to transform healthcare. She set a goal that would seem crazy to many: to build her billion dollar business within three years. She was able to achieve this goal thanks to the intense dedication and identity she created within her team. Purpose is the fuel for corporate explorers to grow.
Three characteristics that distinguish successful corporate explorers
• Performance reliability – I recently asked a CEO what he felt were the key characteristics of a Corporate Explorer. He had almost the same list as me, but he said, You need to make sure that they can see the project through from start to finish. ” This CEO is very good at personally stepping in to help Corporate Explorer withstand the day-to-day pressures of its core business. But he knows this is only possible for a small number of projects. A track record of performance strongly indicates that the individual is a good investment risk.
• social impact – We like to see the organization as a hierarchy with clear areas of responsibility. But they are actually networks of influence, reputation, and informal power. When a company hires an outsider to lead a new venture, they are a novice with no social capital. One aspiring corporate explorer said that as soon as she started to succeed, no one was helping her, and she felt like she was trying to paddle up the Amazon River with a butter knife. She had no social influence. Corporate Explorers need to be respected by people at different levels within the organization and be able to call on those relationships to get things done.
• humility and resilience – Perhaps the biggest difference between entrepreneurs and corporate explorers is humility. Multiple studies have demonstrated the link between entrepreneurship and narcissism. It means they lack empathy for others, have a strong sense of self-esteem and a need to be admired. Perhaps narcissists need the confidence necessary to sustain an idea despite repeated rejections by investors.
Corporate explorers, on the other hand, need to demonstrate humility to gain support within the organization. Stable social systems are quick to reject people they see as self-aggrandizing. Great corporate explorers allow others to recognize their accomplishments. When I interviewed the top teams at the companies mentioned above, several executives each told me that they were the ones who started new businesses. Leaders who think it’s all their idea are much more likely to feel involved in the success of the venture.
Humility helps Corporate Explorers navigate the precarious situation of winning and retaining senior leadership support. It also helps demonstrate resilience in the face of obstacles. They don’t take every setback as a personal rejection because it’s not all about them. This makes it easier to ride the ups and downs of a company’s innovation.
This allows new ventures to be coded as a common goal rather than a predetermined agenda to empower individuals to advocate for innovation.
This is a model to help organizations identify and develop potential future corporate explorers. There’s a big misconception that big companies don’t have these people, so they need to go out looking for new entrepreneurial talent. Alternatively, organizations need to transform their culture first before expecting to develop these individuals. This is rarely true. It’s more likely that the organization just isn’t finding them and giving them the opportunity to flourish.
Corporate explorers can thrive in a variety of corporate cultures and business models. The organizations that have been successful in finding companies are all very different, including Best Buy, LexisNexis, Analog Devices in the US, Bosch and UNIQA Insurance in Europe, and AGC and Panasonic in Japan. Some companies have dynamic cultures that encourage innovation, while others have more hierarchical and bureaucratic cultures.
In our next article, we’ll explore what organizations need to do to use these eight characteristics to identify and develop a cadre of corporate explorers. Some things just can’t be taught. Explorers are probably not born and made. However, natural preferences can be activated to increase a person’s chances of success. For example, you can hire people who are naturally curious and train them to use that curiosity to uncover unsolved problems for your customers. You can partner introverted technologists with high-social network partners to build support for your ideas.
Entrepreneurs always have the upper hand when it comes to attention and glory. They can give their new company a funky name, announce a funding round, and go public on the stock exchange. But beneath this bubble, there will be corporate explorers who operate more quietly and can build new value propositions for existing companies. Companies that can identify and encourage the emergence of such talent will be in a position of relative strength against both competitors and start-ups.
