Managing Innovation, 6th Edition

CHAPTER 12 Promoting Entrepreneurship and New Ventures

In Chapter 10, we examined the processes necessary to develop new products and services within the existing corporate environment, based on the strategy and capabilities identified in Chapter 4. In this chapter, we explore how firms develop and commercialize technologies, products, and businesses outside their existing strategy and core competencies. We will discuss the role and management of internal corporate ventures and new ventures in the creation and execution of new technologies, products, and businesses, specifically:

• internal corporate ventures, or “intrapreneurship”
• new ventures and spin-out firms
• factors that influence success and growth

12.1 Ventures, Defined

Ventures, broadly defined, are a range of different ways of developing innovations, alternative to conventional internal processes for new product or service development. We discussed in Chapter 10 the many benefits of using structured approaches to new product and service development, such as stage-gate and development funnel processes. However, these approaches have also a major disadvantage, because decisions at the different gates are likely to favor those innovations close to existing strategy, markets, and products and are likely to filter out or reject potential innovations further from the organization’s comfort zone. For this reason, ...