5 ways an internal team can boost venture portfolio growth

Find out how having an internal corporate venture team can boost your portfolio and help develop the capabilities you need to thrive in an ever-changing landscape

Internal team members working and boosting venture portfolio
Internal team members working and boosting venture portfolio

Today’s corporate landscape is moving faster than ever, driven by a virtual whirlwind of shifting customer trends, new startup competitors, disruptive technologies and sustainable business models. These factors have made active venture portfolio construction a MUST for corporations that wish to succeed in the long term.   

External partners tend to get most of the limelight for helping corporates accelerate the innovation process and explore promising non-core growth areas. However, there are plenty of ways internal corporate venture teams (ICVT) can contribute to these goals, enabling companies to: 

  • Expand their in-house venturing capabilities
  • Effectively leverage their corporate assets
  • Align with broader corporate goals
  • Build a culture of innovation
  • Develop an ever-expanding strategic vision

With that goal in mind, let’s walk through some of the ways an internal corporate venture team can help take your venture portfolio to new heights

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1. Expanding in-house venturing capabilities

While working with partners is quick and convenient, building up your venturing capabilities internally has significant advantages. Internal corporate venture teams enable companies to develop a plethora of game-changing insights, skills, and know-how to: 

  • Accelerate growth from the inside out
  • Build a solid framework for venture portfolio growth
  • Create a venture portfolio that meets specific growth targets

For example, back in 2014, Lufthansa set up the Lufthansa Innovation Hub to spearhead its company-wide digital transformation. Armed with a team of innovation experts, tech strategists, designers, and venture capitalists, it builds strategic partnerships, invests in travel startups, and creates new digital business models. 

Over the years, the team has developed, validated and launched quite a few highly successful ventures including: 

  • RYDES - A transmodal rewards program aimed at millennials
  • Compensaid -  A digital platform for CO2-neutral flying

With each new venture, Lufthansa has amplified its in-house expertise and created a venture portfolio that is helping it reach its long-term growth goals.  

2. Effective leveraging of corporate assets

Internal corporate venture teams understand corporate processes, know where to find the departmental expertise they need and tend to have in-depth knowledge of corporate assets. This puts them in a great position to leverage corporate resources and grow your venture portfolio effectively and efficiently. 

Capital One's The Lab illustrates this benefit quite nicely. The Lab operates as a fully integrated part of Capital One. Most of their venture ideas come from employees, partners, or quarterly hackathons and have practical business applications. As described on the company website:

“Our diverse team knows the ins and outs of the company and understands how to use its strengths to create products and experiences that benefit millions of customers.”

The approach has enabled Capital One to expand its portfolio with ventures like:

  • Eno - a virtual assistant that provides alerts to safeguard your finances.
  • Capital One Shopping - A free tool that helps you find deals online.
  • Auto Navigator - A free tool that makes car buying and financing easy. 

3. Align with broader corporate goals 

Dedicated internal teams are more in-tune with broader corporate goals and are therefore often better equipped to reach them. For example, a big part of LEGO’s agenda for 2021 included accelerating digitisation throughout the corporation. The ultimate goal was to develop state-of-the-art digital experiences for customers, partners and employees alike. 

To help achieve these broader corporate goals, LEGO has set up a vast ecosystem that includes the LEGO Ventures Incubation Studio as well as other groups in the image below:

The LEGO Brand Group Ecosystem

four different lego ecosystems - lego foundation, lego group, lego education and lego house

Each part of the ecosystem provides valuable insights, expertise and partnerships to nurture new ventures.

4. Building a culture of innovation

Internal corporate venture teams facilitate innovation by encouraging creativity, experimentation and learning by failing. They reward out-of-the-box thinking and enable an entrepreneurial spirit to resonate throughout the organisation.

For example, BASF’s Chemovator fosters intrapreneurship by providing a space for it to grow and succeed, away from everyday corporate restrictions and bureaucracy. This empowers and engages employees, building an environment where:

  • Creativity and leadership are rewarded
  • Talent, experience and industry know-how translate into new assets
  • Innovation is facilitated with the right tools, guidance and resources  

As explained by Chemovator’s Managing Director, Markus Bold:

“There are many resourceful minds among BASF employees who have promising innovative business ideas. We support these colleagues in introducing their new products, digital business models or comprehensive complete solutions to the market quickly and efficiently.”

Through Chemovator, BASF is boosting innovation and entrepreneurial thinking, engaging employees and turning promising ideas into new revenue streams.

5. An ever-expanding strategic vision

Internal corporate venture teams enable companies to step outside their core business (i.e. comfort zone) to explore new concepts that might have otherwise gone undiscovered.

Each new venture that gets developed holds the promise of reaching an untapped market, turning into a new revenue stream or creating a value proposition that will pave the way for the future. This continuous experimentation with new concepts, ideas and business models often leads to insights that help companies: 

  • Solve problems faster
  • Streamline their operations 
  • Increase cost-effectiveness
  • Gain a competitive edge

Walmart’s Store N°8, for example, focuses on developing capabilities to improve customer experience and streamline processes within Walmart. On a mission to “shape the future of retail”, Store N°8 develops initiatives that explore areas like voice commerce, XR, perpetual inventory, AI and sustainability to boost customer experience.

To date, the team has expanded Walmart’s portfolio growth rate with ventures like:

  • Aspectiva - Uses product reviews to help customers make informed decisions
  • InHome - A secure, unlimited and fee-free grocery delivery service
  • Intelligent Retail Lab (IRL) - A system that tests AI experiences inside Walmart

Final thoughts

In today’s fast-moving markets, the same old R&D and M&A activities no longer deliver the growth companies need to thrive. In response, enterprises across almost every industry are broadening their innovation capabilities by leveraging internal teams to reach their growth and innovation targets quicker. 

Like most innovation initiatives, building an internal corporate venturing team isn’t risk-free, and it can take some time and funding. However, it’s a highly efficient way to ensure a constant funnel of innovative ventures to diversify your portfolio and future-proof your business. 

For more inspiring examples, check out the 50 corporate incubators report.

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Are you a corporate innovator looking to fuel innovation through corporate venturing? We can help you create a detailed strategy that leverages your unique corporate assets to create a pipeline of profitable new ventures. 

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