IESE Business School: New Study Illuminates How Large Corporations Can Maximize Value from Innovation
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It sheds light on how companies can not only maximize the innovation produced by their CV units, but also the value they generate for the parent company.
IESE Business School in collaboration with consultancy firm BeRepublic
released today a new study on how companies can best maximise the impact
from corporate venturing – the increasingly popular practice of large
firms collaborating with start-ups in an effort to increase innovation.
The study Open Innovation: Balancing the autonomy and impact of your
corporate venturing unit, is based on over 120 interviews with chief
innovation officers and those in related roles in the United States,
Europe and Asia - and from companies such as BMW, Disney, Orange and
Samsung. It sheds light on how companies can not only maximize the
innovation produced by their CV units, but also the value they generate
for the parent company.
Mª Julia Prats, Professor of Entrepreneurship at IESE Business School
and co-author of the study says: “Innovation for innovation´s sake is
not enough. This study provides a practical framework for how firms can
maximize the effectiveness of their cv units – not only in terms of the
type of innovation generated, but also the extent to which a mind-set
favorable to innovation has been enhanced in the parent company, and
whether the innovations have been adopted by the firm.”
According to the study´s authors, to maximize effectiveness it is
crucial to balance the amount of structural autonomy that CV units have
from the parent company. But getting the right mix of autonomy, control
and integration between a firm and its CV units is an ongoing challenge.
To do so, they identified a framework of variables that each company
should consider, grouped into four main areas:
-
Leadership: To what degree does the executive committee participate in
the unit's decision-making, and how much time elapses between
reporting cycles? -
Distance: How far is the unit from headquarters? This considers both
physical and legal distance. -
Budget: How dependent is the cost center on headquarters? How much is
required for them to break even? - Incentives: How is the unit director evaluated and compensated?
The study found that the keys to success were:
-
Designing an incentive framework that is focused on value integration
as well as agility. This helps companies focus on the value generated
by corporate venturing, instead of innovating for innovation´s sake. - Ensuring an independent cost center for the CV unit
- Considering a longer time span between reporting cycles
-
Choosing the physical location of units according to the degree of
internal autonomy that can be given to the unit and to the level of
internal capability for integrating external innovation into the
company.
Open Innovation: Balancing the autonomy and impact of your corporate
venturing unit is authored by professor Mª Julia Prats and Josemaria
Siota of IESE Business School and Isabel Martínez-Monche and Yair
Martínez of BeRepublic. It is the latest in a series of studies from
IESE Business School, one of the world´s top business schools, that
provides practical, research backed guides for how large firms can best
approach corporate venturing. The next study in the series will be
released during MWC Barcelona and the 4YFN conference, where IESE is
organizing a number of sessions on corporate venturing and innovation.
For more view: https://mediaroom.iese.edu/iese-business-school-to-take-part-in-mwc-barcelona/
To view the complete study, please go to: https://www.ieseinsight.com/doc.aspx?id=2167&ar=16&idi=2
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About IESE Business School
The 2018-2019 academic year marks the 60-year anniversary of IESE
Business School, which is the graduate business school of the University
of Navarra. Founded in 1958, the school is one of the world’s most
international business schools, with campuses in Barcelona, Madrid,
Munich, New York and São Paulo. Consistently ranked within the top ten
worldwide, IESE Business School has pioneered business education in
Europe since its founding. For sixty years, IESE has sought to develop
business leaders with solid business skills, a global mind-set and a
desire to make a positive impact on society. The school distinguishes
itself in its general-management approach, extensive use of the case
method, international outreach, and emphasis on placing people at the
heart of managerial decision-making. In the last four years, IESE has
positioned itself as number 1 in the world for Executive Education
programs, according to the Financial Times ranking. www.iese.edu
View source version on businesswire.com: https://www.businesswire.com/news/home/20190222005254/en/